My current car embarrasses my two daughters.
One of the embarrassing things about the car is that it is extremely loud. When I purchased this used car two years ago, the seller had just replaced the tires. They put the cheapest tires on the car and I’ve been driving it ever since with the same low-quality tires. It actually sounds like a plane taking off. It is so loud that it can be heard a few streets away. 🙂
The tires only have 25,000 miles on them so I won’t replace them. My hope is to get as many miles out of them as possible.
To get a picture of this car, think back to the kind of car you might have had in college. This is my car!
The funny part is… my daughters go to private schools (paid for by tenants living in our rental properties) and my car doesn’t seem to fit in with all of the others. In fact, most of the kids at my daughter’s high school drive cars nicer than mine!
Even though I could get a better car, I plan to keep this “embarrassing” car for as long as I can. I’m not much of a car guy and I really don’t care what I drive as long as it’s reliable. Thankfully, I don’t have to try impress anyone anymore and don’t need to drive a fancy car for clients.
There are several reasons why I continue to drive this embarrassing car…
1. My oldest daughter just got her driver’s license earlier this year. She drives my car and it has been very helpful through her learning process. I didn’t get upset when she hit curbs, or other objects early on in her driving. My embarrassing car IS the perfect starter car.
2. It saves me a lot of money. I typically buy several investment properties (mobile homes) each month and this car has helped me numerous times in my negotiations. Just this morning, I went to see a home for sale in my “embarrassing” car and negotiated a 30% reduction in the asking price. I save more in the prices I pay for these homes than I would have to pay for a new car. It’s that significant of a savings. I also save a lot of money hiring contractors, too. They see my car and think I can’t afford higher prices, which I obviously use to my advantage.
(I learned this lesson when I was selling one of our investment properties twenty years ago. The buyer rolled up in a $80,000 car. This car cost him another $25,000 in the price he paid for the property I sold him.)
3. This “embarrassing” car is an opportunity to teach my children many important lessons. The biggest lesson is to not waste money trying to impress others. I would rather use money to acquire income properties than drive an expensive car. They know this because I tell them repeatedly why I drive this car and I show them homes I’m buying. I also show them homes I’ve bought for them. Both of my kids have multiple income properties and are destined to be millionaires through the compounding of this income throughout their lives. None of this would be possible if I managed money differently. I want them to SEE and FEEL this because it is extremely important to their future financial well being.
4. I’m trying my best to live with the principals found in the book,”The Millionaire Next Door.” This book was an eye-opener to me many years ago and I try to live with what I learned. I spent the last month studying Hetty Green, who was the richest woman in the world, and learned she lived by the same philosophy as those profiled in the Millionaire Next Door. When she passed away in 1916, she left her two children $100,000,000. This is $2 billion in today’s dollars. She never owned a mansion. She didn’t wear expensive clothes. She didn’t travel in private rail cars. She lived simply and reinvested the majority of her investment income.
I often wonder if people really think about their choices regarding cars, homes, and other status symbols. Is it better to drive a luxury car, or buy an investment property for your child? Is it better to live in larger home, or invest for early retirement?
Most parents say they’ll do anything for their children and then go buy status symbols without doing much to set their kids up for future wealth. This simply amazes me. I would happily drive an embarrassing car if it means my children will have a better future. This decision isn’t hard to make.
I also don’t understand how someone can learn about compounding and how amazing it can be and not use it with your children and grandchildren? They have the gift of time and you can use this to your advantage. However, not many do.
$100 a month invested at 8% is $141,761 in 30 years.
$200 a month invested at 8% is $283,522 in 30 years.
$300 a month invested at 8% is $425,283 in 30 years.
I know this isn’t millions, but it could dramatically change the quality of your child’s life.
Would you drive an embarrassing car if your child could have an EXTRA $425,283 in 30 years?
UPDATE: One of my tires started leaking and I ended up replacing the tires. My car is no longer extremely loud and not as embarrassing.