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The Five Million Dollar Car

14 February, 2017



Before we get to the next step in our road to financial success, I need to hit on one key element in the “Debt Snowball” I talked about last week. The goal in this step is to pay off all debt except for the mortgage. That includes the cars. I am going to borrow a quote from Dave Ramsey’s Complete Guide to Money to explain why. The average car payment (in America) is $464 per month right now. If you invest $464 in a good mutual fund every month from age thirty to age seventy, you would end up with more than $5 million!” How do you like that car payment now?
A new car depreciates at the rate of 70% over the first four years! I guarantee that if someone tried to sell you an investment or a house that depreciated that fast, you would walk out the door laughing. Why do you behave differently with cars? To impress someone at a stop light that you don’t even know?
So what do you do if you are in a situation where you have this $464 car payment for the next 4-5 years? Perhaps you have two car payments like this? Frosty the Snowman taught us in the debt snowball, that you pay off your smallest debts first and then work up to the larger debts, so with the exception of maybe a student loan, the cars would be the last items on that list to pay off. But perhaps you could sell them, get out from under the big car note and by a good used car that someone else lost 70% on already.
How quickly you get your income freed up is completely up to you. How bad do you want this? Are you tired of giving all of your hard earned money away?
Albert Einstein put it this way. “Compound interest is the eighth wonder of the world. He, who understands it, earns it…he who doesn’t…pays it.” You can either pay your lenders interest or use your money to gain interest for you. The choice is yours to make.

Check out this video for an interesting idea of how to purchase cars:

As always, if you need more detailed help in your financial situation, touch base with me. I would love to help.

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About

timparady

My name is Tim Parady and I am 36 years old. I was born in Connecticut, raised in Virginia, had a brief layover in Kansas which led me to Texas where I met my wife and best friend. We just celebrated 145years of marriage.
I have the best job in the world, which is to improve peoples lives. I teach people how to win in all areas of there money, which affects all areas of their lives.
78% of Americans live paycheck to paycheck, with no money in the bank and little knowledge of how to invest for their retirement. You can have a different future. You can win with money and I can show you how.
I am an independent Dave Ramsey Financial Coach,and Insurance Agent at Alkali Insurance and I am here to serve you. My goal is to provide knowledge and tools to change your life. To schedule an appointment to address your financial needs and goals, email me at tim_parady@yahoo.com



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