A Beater Truck and a FAT 401k...

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CyclingDuo
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A Beater Truck and a FAT 401k...

Post by CyclingDuo »

No surprises that are new to many of us here in this article, but I post it because I keep seeing posts regarding portfolio questions from posters with new cars and auto debt - or questions on "how much home can I afford" themes on many threads from new posters.

For that reason, I point out yet another article concerning what we often talk about on the forums regarding the big three expenses during the accumulation years and how to keep them low as an actionable thing one can do as an investor and consumer regarding LBYM (living below your means) when it comes to spending on housing/transportation/food.

https://finance.yahoo.com/news/liz-west ... 01679.html

Liz Weston: The 2 costs that can make or break your nest egg

A ‘BEATER’ TRUCK AND A FAT 401(K)

Driving older vehicles and owning a modest home are the top two sacrifices cited in a study of Principal Financial Group customers ages 20 to 54 who contribute big chunks of their income to retirement accounts.


The researchers divided 10,000 households into three groups: the 25% who contributed the least to their retirement plans, the 25% who contributed the most, and the “middle savers” whose contributions landed them in the middle 50%.

My wife and I certainly, for the most part, drove less expensive vehicles in the age 20-45 range and have managed to keep our housing costs as low as possible to free up money to invest over the years. Even a small percentage makes a difference over a lifetime of investing.

CyclingDuo
Last edited by CyclingDuo on Wed Aug 26, 2020 6:01 am, edited 1 time in total.
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Chuck107
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Re: A Beater Truck and a FAT 401k...

Post by Chuck107 »

.....
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tedgeorge
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Re: A Beater Truck and a FAT 401k...

Post by tedgeorge »

My desire for nicer cars dwindled exponentially when life became commuting to/from work and battling the never-ending stream of crushed goldfish and melted gummy bears in the back seat. Especially right now when our cars are just sitting there for days with offices closed.

Super happy with my $3000 beater truck. Scratched it taking stuff to the dump. Don't care. Kids play all over it dragging sticks and who knows what else everywhere. Don't care!
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MNGopher
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Re: A Beater Truck and a FAT 401k...

Post by MNGopher »

I'm a Boglehead in most ways, but new F150's have been my vice. I just bought the 4th one of my life, but I did keep the last one for almost 11 years. I wouldn't do this if I was broke though. I max all my tax advantaged accounts and live in a house I paid off 13 years ago. I had the cash (40K after trade-in) to buy the vehicle outright, but decided to finance part of it to keep some of that money for investing during these potentially turbulent markets.
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Re: A Beater Truck and a FAT 401k...

Post by willthrill81 »

For all of our adult life, we only drove used vehicles, typically for 5-10 years, but a couple of years ago, we bought a brand new SUV, though it was far less expensive than the typical new vehicle, and we own it outright. All the way, we were saving around 50% of our gross household income, so we felt that a little splurge was fine. Also, we'll try to drive the vehicle for at least a decade, probably closer to 15 years.
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NotWhoYouThink
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Re: A Beater Truck and a FAT 401k...

Post by NotWhoYouThink »

If you work on the 401k first you can buy a very nice truck later. Switching from the beater cars to the nice ones late in life seems more fun to me than switching to beaters late in life because you didn't put enough in the 401k.
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Re: A Beater Truck and a FAT 401k...

Post by brad.clarkston »

I dream of a new Jeep and/or Tesla and then wake up and see my old 2007 Camry in the driveway ... I work 100% from home year round and almost never drive anywhere :) -- my wife drives us around town in her hybrid when we go out.

I think it's more about all the other houses in the cul-de-sac that has BMW/Mercedes/Lexus parked in front. Tho pound for pound my Camry has had less problems than anything but the Lexus's and it's got 250k miles on it.

I just keep plugging away.
nigel_ht
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Re: A Beater Truck and a FAT 401k...

Post by nigel_ht »

NotWhoYouThink wrote: Tue Aug 25, 2020 2:46 pm If you work on the 401k first you can buy a very nice truck later. Switching from the beater cars to the nice ones late in life seems more fun to me than switching to beaters late in life because you didn't put enough in the 401k.
I dunno...I kinda stopped caring like tedgeorge once I had kids. If you're going to enjoy a nice new car it IS much nicer to not have to worry about crushed goldfish and melted gummi bears...maybe in retirement my opinion will flip back.

The only reason I'm contemplating a "new" truck (say a 2018) over a beater truck is the oldest is learning to drive and having all the modern safety features seems like a plus.

But man, would I be pissed if he crashed a "new" F-150...I wrecked my first car but it was only a $500 corolla...on the other hand I was lucky not to end up badly hurt. No air bags, etc back in the day.
keystone
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Re: A Beater Truck and a FAT 401k...

Post by keystone »

For most people, it is definitely easier to max the retirement accounts first and then figure out how much house and car you can afford then doing it the other way around. I've seen this firsthand at the office with younger co-workers in particular. They want to save more for retirement, but their fixed costs are too high because they prioritized in the "wrong" order.

My advice is to never listen when a realtor tells you how much house you can afford.
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Callisto
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Re: A Beater Truck and a FAT 401k...

Post by Callisto »

Agree with the sentiment, but I worry if people sometimes take the whole junker thing too far. I picked up my dream car and got hit by a reckless driver literally a week into it. Was kicking myself, wishing I had kept my 20 yr old Corolla, right up until I got a phone call to come back to the hospital asap because the xrays came back and my hand was broken in a way which might have ended my career just months after I had finished school.

Doubt I'll be buying a new car any time soon, but I sure as hell am never driving a car that doesn't have the latest safety features.
LittleMaggieMae
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Re: A Beater Truck and a FAT 401k...

Post by LittleMaggieMae »

I like driving "beater" vehicles. I don't ever have thoughts about "geez! another door ding! or a scrap " I don't worry about getting "car jacked" - it seems really popular in my area (if you are driving a big expensive SUV). I don't have a car alarm on my car. I seem to have good luck with beaters - the important things work - the driver's side window goes up and down, the speedometer works, the heat works, the radio works, and they have tended to "drip oil" slowly once they got really old.

I spend very little "thought/energy/time" on my car. I've got better things to do. :)

It always seems the people I know with "status symbol" vehicles have some sort of issue/expense that they like to talk about. Maybe it's a way of "bonding" with other people in their social circle (shared experience)? Don't know. I would rather talk about something else. As far as I can tell, owning a "status symbol" vehicle is "drama and a headache".

(fwiw: I hear the average age of a car on the road these days is 10 years old. I'm pretty these older vehicles have plenty of safety features. )
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bottlecap
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Re: A Beater Truck and a FAT 401k...

Post by bottlecap »

I'd rather have a nice house than a nice car, if you can afford the upkeep. You spend a lot more time in it and at least you're likely to get your money back and maybe some appreciation.

Nothing wrong with a new car if you drive it long enough. Most don't.

JT
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CyclingDuo
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Re: A Beater Truck and a FAT 401k...

Post by CyclingDuo »

brad.clarkston wrote: Tue Aug 25, 2020 2:54 pm I dream of a new Jeep and/or Tesla and then wake up and see my old 2007 Camry in the driveway ... I work 100% from home year round and almost never drive anywhere :) -- my wife drives us around town in her hybrid when we go out.

I think it's more about all the other houses in the cul-de-sac that has BMW/Mercedes/Lexus parked in front. Tho pound for pound my Camry has had less problems than anything but the Lexus's and it's got 250k miles on it.

I just keep plugging away.
Daughter is home visiting us on her vacation. She drives a 2005 SUV we gave her a few years ago. One of her old high school friends came over with a brand new decked out Audi. I know where she works and based on her telling me she has her own apartment (no roomies) and a new Audi, I asked her if she gets a 401k match. No surprise, she said she is not contributing anything to it. DD is socking it away in her 401k, maxes out a Roth IRA, has a roommate and drives the 15 year old SUV. I hope our daughter continues on her path and I made sure we discussed her friend’s situation (after her friend left) so I could drill in the fiscal discipline point. :mrgreen:

CyclingDuo
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dogagility
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Re: A Beater Truck and a FAT 401k...

Post by dogagility »

My family has typically purchased new cars but the base models. Then proceeded to keep them for 10+ years.

As for houses, we've moved a lot over the years. We've purchased houses in the best school districts in nice neighborhoods but always one of the lowest priced houses in those neighborhoods. We've had no problems selling the houses. It's worked out well financially for us regarding equity.
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Lastrun
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Re: A Beater Truck and a FAT 401k...

Post by Lastrun »

keystone wrote: Tue Aug 25, 2020 2:57 pm For most people, it is definitely easier to max the retirement accounts first and then figure out how much house and car you can afford then doing it the other way around. . . . They want to save more for retirement, but their fixed costs are too high because they prioritized in the "wrong" order.
willthrill81 wrote: Tue Aug 25, 2020 2:25 pm . . . All the way, we were saving around 50% of our gross household income, so we felt that a little splurge was fine. Also, we'll try to drive the vehicle for at least a decade, probably closer to 15 years.
This has been my approach, the "pay yourself first approach" makes budgeting easy. Achieve your savings goal first, then enjoy the rest on Starbucks and new cars.

Our approach was new cars and keep them for 10 years, nothing too fancy.
TNWoods
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Re: A Beater Truck and a FAT 401k...

Post by TNWoods »

I'm in my later 50s, and have owned 5 vehicles in my life.

Small pickup, 2 VWs from the 60s, smaller SUV and currently a mid size pickup.

Bought from used car dealers, side of the road with "4 sale" sign, and friend of a friend.

Total spent to purchase all 5 is about $30,000.

Lived in the same house since late 90s, paid off early.

It definitely works.

TNWoods
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firebirdparts
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Re: A Beater Truck and a FAT 401k...

Post by firebirdparts »

I actually started writing a book once on $500 cars, but I lost interest after about 4 chapters. That was a long time ago, and really, I can still find them for $500. I bought a 1995 Volvo 850 for $450 6 years ago and drove it 6 years, then gave it away to a teenager. It wasn't even ugly. I mean, it was as ugly as a Volvo 850 is supposed to be, but it wasn't beat up or rusty.
Last edited by firebirdparts on Tue Aug 25, 2020 5:07 pm, edited 1 time in total.
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Woodshark
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Re: A Beater Truck and a FAT 401k...

Post by Woodshark »

We bought a Plymouth Grand Voyager minivan back in 1998. Owned that van for about 22 years until we donated it to a local charity in February. Sure, it had a few minor cosmetic dings but with routine maintenance for 22 years, it was still running fine. We could have replaced it (for cash) many years ago, but why? It did what we wanted, when we wanted it. It even had hand crank windows. Remember those!

2020 was supposed to be the year of road trips, so we bought a new van for road trips. Thanks to the whole covid thing, it sits in the driveway 95% of the time.
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Re: A Beater Truck and a FAT 401k...

Post by Silverado »

TNWoods wrote: Tue Aug 25, 2020 4:04 pm I'm in my later 50s, and have owned 5 vehicles in my life.

Small pickup, 2 VWs from the 60s, smaller SUV and currently a mid size pickup.

Bought from used car dealers, side of the road with "4 sale" sign, and friend of a friend.

Total spent to purchase all 5 is about $30,000.

Lived in the same house since late 90s, paid off early.

It definitely works.

TNWoods
Funny, as I was reading through the posts, I did this same math. Late 40s, fourth vehicle. I chuckle at these threads because there is always such a mix of opinions. Pretty much the same in all threads I suppose.
hnd
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Re: A Beater Truck and a FAT 401k...

Post by hnd »

i buy rear damaged repaired salvage trucks at like 1/2 the cost of what they'd be without the rebuilt title.
surfstar
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Re: A Beater Truck and a FAT 401k...

Post by surfstar »

Its the Bogleheads "I'm more frugal than you" -off!

This time it was a trick question - Trucks get too low of gas mileage and can have higher registration and insurance rates. Whomever didn't say "20 year old Corolla" lost - good luck next time.
ncbill
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Re: A Beater Truck and a FAT 401k...

Post by ncbill »

surfstar wrote: Tue Aug 25, 2020 5:31 pm Its the Bogleheads "I'm more frugal than you" -off!

This time it was a trick question - Trucks get too low of gas mileage and can have higher registration and insurance rates. Whomever didn't say "20 year old Corolla" lost - good luck next time.
I'm fixing up a Camry of this generation (different year) that I bought from a relative's estate as my new, but only-around-town, daily driver:

https://www.theonion.com/toyota-recalls ... 1819577805
Helo80
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Re: A Beater Truck and a FAT 401k...

Post by Helo80 »

Callisto wrote: Tue Aug 25, 2020 3:14 pm Agree with the sentiment, but I worry if people sometimes take the whole junker thing too far. I picked up my dream car and got hit by a reckless driver literally a week into it. Was kicking myself, wishing I had kept my 20 yr old Corolla, right up until I got a phone call to come back to the hospital asap because the xrays came back and my hand was broken in a way which might have ended my career just months after I had finished school.

Doubt I'll be buying a new car any time soon, but I sure as hell am never driving a car that doesn't have the latest safety features.


That's exactly why I'm a proponent of the improved safety features in new cars. It's not all marketing and gimmicks and attempt to separate you from your hard earned dollars. Give credit to the engineers that work at the factories doing crash tests all day.

If we could predict tomorrow with pretty good certainty, we would all be day traders at home. We would know precisely what insurance policies to buy and not buy, and we would buy rentals with the optional rental insurance prior to a catastrophic accident.

It doesn't matter how good your 3-fund portfolio is or how diligent you've been with saving and automobile purchasing in your life.... There are probably not too many 10 or 15 year old cars that I'd prefer to be in during a T-bone accident compared to any number of cars we have today.

PS -- for fun, check out the IIHS side-impact of a Chevy Spark. I would have assumed that you would be dead 5 times over in that vehicle.
Wanderingwheelz
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Re: A Beater Truck and a FAT 401k...

Post by Wanderingwheelz »

I’m a true Boglehead, with a paid for home and maxed retirement accounts always, but here’s an unpopular opinion.

Buying nice new cars, carefully, IS NOT as harmful to your financial health as many would have you believe. If you are a good negotiator and you’re patient, you can own new cars for not much more than good used ones- often less. I’m FI at 49 and I’ve owned 11 brand new cars (Counting an RV) in the last 10 years. Three were Porsches and one was a BMW. Only one was kept longer than the manufacturers warranty period and that’s the one we bought my daughter when she was 16, she’s now 22.
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JBTX
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Re: A Beater Truck and a FAT 401k...

Post by JBTX »

We've usually bought low mileage used cars in the $15k-$25k range and drive them close to 200000 miles. Our house is only slightly larger and more expensive than the national average.
phxjcc
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Re: A Beater Truck and a FAT 401k...

Post by phxjcc »

Chuck107 wrote: Tue Aug 25, 2020 1:56 pm Yes, I can agree with living below your means to exceed in retirement.

I almost always had the worst car in the company parking lot, and everyone knew it.
But it was paid for, and some were old enough to vote.
Modest home as well.
Others had to have that new car every few yrs.
I didn't care, and I don't now, as now I can buy that new car, and I don't have to work in retirement as I know some that I worked with do have to.
Those new cars were a memory of owning I don't have, it's ok I don't mind.
I never had the worry of leaving it in a parking lot to get scratched either.
I agree with living below you means.

However--I read in a thread recently "we make $500K a year and drive two $20,000 cars."

Ok, fine. To each to their own counsel.

I personally drove nice used cars, and--could afford--but did not purchase a mid life crisis sports car, like my best friend did. And I told him he was crazy and should save his money.

"But what if I die early?" he said.

My best friend died of septicemia at 42.

I was DX'd with MS at 52 and will never be able to drive any car at speed on a closed circuit.

Yes, I am angry that I practiced delayed gratification.

So, car geeks out there...if you make mid six figures, just buy that fr@@ing car, already!
Jack will not come down and smite you!

The end.
nigel_ht
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Re: A Beater Truck and a FAT 401k...

Post by nigel_ht »

surfstar wrote: Tue Aug 25, 2020 5:31 pm Its the Bogleheads "I'm more frugal than you" -off!

This time it was a trick question - Trucks get too low of gas mileage and can have higher registration and insurance rates. Whomever didn't say "20 year old Corolla" lost - good luck next time.
I walk to work and leave the truck at home.
nigel_ht
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Re: A Beater Truck and a FAT 401k...

Post by nigel_ht »

phxjcc wrote: Tue Aug 25, 2020 7:03 pm
So, car geeks out there...if you make mid six figures, just buy that fr@@ing car, already!
Jack will not come down and smite you!
But forum posters may. Liberally.

That said, yah, don't leave things you really want to do for tomorrow.
Chuck107
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Re: A Beater Truck and a FAT 401k...

Post by Chuck107 »

.....
Last edited by Chuck107 on Mon Oct 05, 2020 8:01 am, edited 1 time in total.
Alas, I find moderation of this forum too restrictive for my tastes, farewell.
rockstar
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Re: A Beater Truck and a FAT 401k...

Post by rockstar »

Makes sense. However, you want a home that you enjoy living in, and you want a reliable vehicle to get you from point a to b. The problem is that you have no idea if the vehicle you're buying is going to be reliable. Some makes and models have bad years. You have no way of knowing. I had one vehicle last me six years before having all sorts of problems. I had another one that lasted twelve before I had any problems. You can buy used and know a little bit upfront, but if you want the latest tech like Apple Carplay, you're going to need aftermarket upgrades.
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firebirdparts
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Re: A Beater Truck and a FAT 401k...

Post by firebirdparts »

phxjcc wrote: Tue Aug 25, 2020 7:03 pm Yes, I am angry that I practiced delayed gratification.

So, car geeks out there...if you make mid six figures, just buy that fr@@ing car, already!
Jack will not come down and smite you!

The end.
Well, I have a dozen cars, but they’re not the depreciating kind.
A fool and your money are soon partners
ImUrHuckleberry
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Re: A Beater Truck and a FAT 401k...

Post by ImUrHuckleberry »

I've always bought new compact cars (usually Civics) and kept for 200k to 300k miles, basically until they become unreliable. I used to put on 35-40k miles every year. My wife has usually had a slightly nicer vehicle but she also drives them until they become unreliable. But in her case since she puts on far fewer miles she generally keeps her vehicles 2x long as me.
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Re: A Beater Truck and a FAT 401k...

Post by LivinGood »

I’m driving a 2004 Tundra with 107,000 miles. Actually going in for timing belt/ water pump tomorrow . Trying to get another 100,000 out of her. I live in a very HCOL area, so owning here may never be a option. Driving this Tundra into the ground is gonna free up lots of investing capital for me in the coming years. Makes me feel better about not being able to own in a ski town.
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Re: A Beater Truck and a FAT 401k...

Post by mikeyzito22 »

I suppose the fact is that you can get a pretty new used car for under 20K. Is that a beater? Nope. For example a 2017 Corolla goes for about 16K with 20K in miles. Same with a pretty newer Rav4. I don't think spending 15K-20K on a car is excessive. You can get a pretty nice vehicle for the price, with the safety features. Now if that isn't in your price range, then sure, don't get it. But it would be much nicer than a "beater."
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Re: A Beater Truck and a FAT 401k...

Post by helloeveryone »

JBTX wrote: Tue Aug 25, 2020 6:48 pm We've usually bought low mileage used cars in the $15k-$25k range and drive them close to 200000 miles. Our house is only slightly larger and more expensive than the national average.
Curious - what brand do you prefer for keeping them to 200k? usual toyotas?
helloeveryone
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Re: A Beater Truck and a FAT 401k...

Post by helloeveryone »

LivinGood wrote: Tue Aug 25, 2020 7:45 pm I’m driving a 2004 Tundra with 107,000 miles. Actually going in for timing belt/ water pump tomorrow . Trying to get another 100,000 out of her. I live in a very HCOL area, so owning here may never be a option. Driving this Tundra into the ground is gonna free up lots of investing capital for me in the coming years. Makes me feel better about not being able to own in a ski town.
This will be very easy. I see used tundras in that year range for sale with 200k-300k miles all the time.
chrisam314
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Re: A Beater Truck and a FAT 401k...

Post by chrisam314 »

I think pretty much everyone on this forum agrees that cars are a pretty big money pit. I mean new trucks are absurd. Look at the higher end RAM1500's, Silverados, F150's, etc. They are just as much as a BMW or Lexus, or more in some cases. Also, in general its much better to repair a car if you can get substantially more life unless its a pretty catastrophic mechanical issue. I had someone tell me instead of getting new tires, they were just going to get a new car. It's like come on. It has 60,000 miles on it.

The bigger debate is on the house issue. The article lightly mentions getting a 'modest house'. Back in the 90's/early 2000's that used to mean don't overpay for the McMansion. More relevant for the 'millenial' generation (of which I am a part of) is buying a 'modest' house and dumping every penny into it like its going to be on next season of House Hunters. Shiplap this, barn door that. Sure just throw in a new kitchen or master bath. Just take down that wall over there. Uhoh, is that mold?

But hey, all we've been told is how it turns in to equity by the Property Brothers.

I have seen more people treat their house like a money pit by doing one restoration project after another. My theory is that if you actually added up how much most people spend on their 'HGTV' styled house they actually lose money when they sell it after realtors fees, possible capital gains, etc. etc. Of course I have no data to prove that so feel free to criticize. Some probably make out like bandits I'm sure.
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Re: A Beater Truck and a FAT 401k...

Post by averagedude »

Great article. This is what I would call the big three for average folks like me. I attribute these 3 things as the foundation of my success.
1. Buy used cars and drive them until the wheels fall off.
2. Buy a modest house.
3. Invest at least 15% of your gross pay, make it automatic, and start doing this in your early 20's.
Couple's that live in the US that do these three things will be millionaire's when they retire, even if they are in the bottom half of the income distribution. Just a few facts to back up my opinion.
1. The median price of a new car is $36,000.
2. The median price of a new house is $300,000. This number has spiked heavily over the last 10 years.
3. A couple who starts out today at 25 years old and makes $35,000 a year each (less than the median average) and saves 15% of their income in an investment product that compounds at 8% per year, will have $2,700,000 when they retire at 65 years old. Average is pretty good in the United States.
JBTX
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Re: A Beater Truck and a FAT 401k...

Post by JBTX »

helloeveryone wrote: Tue Aug 25, 2020 8:19 pm
JBTX wrote: Tue Aug 25, 2020 6:48 pm We've usually bought low mileage used cars in the $15k-$25k range and drive them close to 200000 miles. Our house is only slightly larger and more expensive than the national average.
Curious - what brand do you prefer for keeping them to 200k? usual toyotas?

Usually between 160k to 200k+

Over the years 2 Toyota avalon, nissan maxima, Honda Accord. Cheap old style Taurus to 150k. Currently working on newer style Ford Taurus with 160k and Lexus 350 with 150k+
mikeyzito22
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Re: A Beater Truck and a FAT 401k...

Post by mikeyzito22 »

averagedude wrote: Tue Aug 25, 2020 8:31 pm Great article. This is what I would call the big three for average folks like me. I attribute these 3 things as the foundation of my success.
1. Buy used cars and drive them until the wheels fall off.
2. Buy a modest house.
3. Invest at least 15% of your gross pay, make it automatic, and start doing this in your early 20's.
Couple's that live in the US that do these three things will be millionaire's when they retire, even if they are in the bottom half of the income distribution. Just a few facts to back up my opinion.
1. The median price of a new car is $36,000.
2. The median price of a new house is $300,000. This number has spiked heavily over the last 10 years.
3. A couple who starts out today at 25 years old and makes $35,000 a year each (less than the median average) and saves 15% of their income in an investment product that compounds at 8% per year, will have $2,700,000 when they retire at 65 years old. Average is pretty good in the United States.
Number 3 is key. I still have no idea why people aren't taught this at an earlier age. It should be mandatory, not an "elective." Even me, who has fairly financially literate parents, didn't instill the whole "invest early and often" concept. No doubt I'm playing catch up but I still have at the last half of my life to hopefully do it.
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zaboomafoozarg
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Re: A Beater Truck and a FAT 401k...

Post by zaboomafoozarg »

That's the only nice thing about not being able to drive - no need to spend money on vehicles.

Other than that it makes life suck.
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Brianmcg321
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Re: A Beater Truck and a FAT 401k...

Post by Brianmcg321 »

I drive a 2001 Ford F150. Nobody that has seen it would call it a beater though. It only cost me $6k. And my retirement : accounts are getting there. :moneybag :moneybag
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
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peetsperk
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Re: A Beater Truck and a FAT 401k...

Post by peetsperk »

I thought others might enjoy this story. "A Minnesota man sold the 1957 Chevy pickup he drove for 44 years for $75, the same price he paid decades ago.

Bob Sportal of Prinsburg handed over the key last month to the grandson of the man he bought the truck from, KARE-TV reported.

Sportal was in his early 20s when he bought the rusty pickup from a retiring farmer. He drove the truck to work every day at a local grain elevator until he retired five years ago.

Sportal kept driving the truck but decided to sell it to Tom Leenstra, grandson of the late John VanDerVeen, who originally sold the truck to Sportal.
“It’s like riding with my grandpa again,” Leenstra said.

The truck is an antique but pretty rusted through. And considering the buyer, Sportal decided to sell it for what he paid for."

If you'd like to watch the story as reported on Minnesota KARE- TV News here is the link ( https://www.autoblog.com/2020/08/06/min ... -44-years/ )
statefan03
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Re: A Beater Truck and a FAT 401k...

Post by statefan03 »

Check out "The Millionaire Next Door"
chrisam314
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Re: A Beater Truck and a FAT 401k...

Post by chrisam314 »

peetsperk wrote: Tue Aug 25, 2020 9:29 pm I thought others might enjoy this story. "A Minnesota man sold the 1957 Chevy pickup he drove for 44 years for $75, the same price he paid decades ago.

Bob Sportal of Prinsburg handed over the key last month to the grandson of the man he bought the truck from, KARE-TV reported.

Sportal was in his early 20s when he bought the rusty pickup from a retiring farmer. He drove the truck to work every day at a local grain elevator until he retired five years ago.

Sportal kept driving the truck but decided to sell it to Tom Leenstra, grandson of the late John VanDerVeen, who originally sold the truck to Sportal.
“It’s like riding with my grandpa again,” Leenstra said.

The truck is an antique but pretty rusted through. And considering the buyer, Sportal decided to sell it for what he paid for."

If you'd like to watch the story as reported on Minnesota KARE- TV News here is the link ( https://www.autoblog.com/2020/08/06/min ... -44-years/ )
This is going to make a lot of people on this forum very very jealous.
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Re: A Beater Truck and a FAT 401k...

Post by Vanguard Fan 1367 »

When young and impressionable I heard a speaker talk about buying a new car and then deciding to get rid of it and buy something that he could pay cash for. He said that it rattled but it rattled "p a i d."

I have never taken out a loan to buy a car. I did get a loan for 3 months in order to get 1000 dollars off my Ford's price.

I read a post on another thread talking about income being important to being able to save for retirement. I resisted telling him/her that what you spend is probably more important. High income athletes are classic big spenders in the short time they have the nice income and then it ususally is gone and the athlete has to struggle because of not burying some nuts for the winter of his retirement from athletics.
Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."
smitcat
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Re: A Beater Truck and a FAT 401k...

Post by smitcat »

Silverado wrote: Tue Aug 25, 2020 5:20 pm
TNWoods wrote: Tue Aug 25, 2020 4:04 pm I'm in my later 50s, and have owned 5 vehicles in my life.

Small pickup, 2 VWs from the 60s, smaller SUV and currently a mid size pickup.

Bought from used car dealers, side of the road with "4 sale" sign, and friend of a friend.

Total spent to purchase all 5 is about $30,000.

Lived in the same house since late 90s, paid off early.

It definitely works.

TNWoods
Funny, as I was reading through the posts, I did this same math. Late 40s, fourth vehicle. I chuckle at these threads because there is always such a mix of opinions. Pretty much the same in all threads I suppose.
Funny, I am about the same age as Silverado and did the math but stopped at 40.
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Elsebet
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Re: A Beater Truck and a FAT 401k...

Post by Elsebet »

keystone wrote: Tue Aug 25, 2020 2:57 pm For most people, it is definitely easier to max the retirement accounts first and then figure out how much house and car you can afford then doing it the other way around. I've seen this firsthand at the office with younger co-workers in particular. They want to save more for retirement, but their fixed costs are too high because they prioritized in the "wrong" order.

My advice is to never listen when a realtor tells you how much house you can afford.
Two great points.

When I was 22 I was hounded by the gentleman in the next cubicle to put 18% into my 401k which I thought was outrageous at the time, but I am glad I listened to him. I paid it forward with a younger co-worker at my last job and was glad when he told me of his much larger 401k balance a year later.

Our last car we traded in was 15 years old and we replaced it with a brand new 2016 model 4 years ago, i hope to drive that truck at least 11-16 more years. Our other car is a 2006 Honda and I'm hoping we can get at least 6 more years out of it. Both are paid off. However I made dumb mistakes with vehicles in my 20's too, like leasing 2 cars.
"...the man who adapts himself to his slender means and makes himself wealthy on a little sum, is the truly rich man..." ~Seneca
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CyclingDuo
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Re: A Beater Truck and a FAT 401k...

Post by CyclingDuo »

statefan03 wrote: Wed Aug 26, 2020 8:03 am Check out "The Millionaire Next Door"
Yes, as well as check out Chris Hogan's Everyday Millionaires and the accompanying research study.

There is nothing wrong with buying a brand new car with cash once you have reached the level of FI to swing it without any issues. The younger investor/saver who has not yet reached that status is what I was hoping the article pointed out to everyone.

We drive a new pickup we bought brand new in 2017 and a Nissan SUV that we bought brand new in 2018 - cash purchases of course. Prior new purchase of a new car for me was in 2005 - one which I drove for 12 years and over 200K miles before selling it to get the new car, and my spouse pawned off her old 2005 SUV to our daughter and it is still going strong.

For the younger persons who are in their first decade or two of wealth accumulation, keeping that housing expense and car expense low makes a HUGE difference. So many start out their working lives with student loans, a new car loan, rent an apartment that is more expensive than they need, or get into a house too early before they can really afford it. It's pretty much "game over" at that point without a major intervention.

I saw the article yesterday and posted the link to it right after I had read several threads of new BH members asking for investment portfolio advice and saw they all had student loan debt, new car auto loan debt, etc... . :oops:

CyclingDuo
"Save like a pessimist, invest like an optimist." - Morgan Housel
phxjcc
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Re: A Beater Truck and a FAT 401k...

Post by phxjcc »

Chuck107 wrote: Tue Aug 25, 2020 7:24 pm
phxjcc wrote: Tue Aug 25, 2020 7:03 pm
Chuck107 wrote: Tue Aug 25, 2020 1:56 pm Yes, I can agree with living below your means to exceed in retirement.

I almost always had the worst car in the company parking lot, and everyone knew it.
But it was paid for, and some were old enough to vote.
Modest home as well.
Others had to have that new car every few yrs.
I didn't care, and I don't now, as now I can buy that new car, and I don't have to work in retirement as I know some that I worked with do have to.
Those new cars were a memory of owning I don't have, it's ok I don't mind.
I never had the worry of leaving it in a parking lot to get scratched either.
I agree with living below you means.

However--I read in a thread recently "we make $500K a year and drive two $20,000 cars."

Ok, fine. To each to their own counsel.

I personally drove nice used cars, and--could afford--but did not purchase a mid life crisis sports car, like my best friend did. And I told him he was crazy and should save his money.

"But what if I die early?" he said.

My best friend died of septicemia at 42.

I was DX'd with MS at 52 and will never be able to drive any car at speed on a closed circuit.

Yes, I am angry that I practiced delayed gratification.

So, car geeks out there...if you make mid six figures, just buy that fr@@ing car, already!
Jack will not come down and smite you!

The end.
I understand the point of what you say, why it's directed at my post I'm not sure.
Perhaps I would have had a different opinion IF I had made your mid 6 figures...
However I was making mid 5 figures and only after 30 yrs.

I don't believe I was telling anyone else they should do the same as I did.
Just to be crystal clear:
1. what I posted was not "directed at your post",
2. I never made mid-six figures, and
3. The obsessive compulsiveness by some on this board to accumulate wealth borders on clinically psychotic.

My point was...and will always be: if you have the means to indulge in whatever makes you happy without endangering future welfare, then by all means indulge. I have seen too many cases where "I will wait until X to do Y" fails to occur due to physical and/or mental incapacity to do actually do Y when X is accomplished.
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