Podcast Summary
Invest in Real Estate with Fundrise and Secure Life Insurance with Policygenius: Easily invest in real estate for $10 through Fundrise while securing affordable life insurance from Policygenius, with options starting at $292 per year and some with same-day approval and no medical exams.
Spring is an excellent time for both investing in real estate through Fundrise and securing life insurance coverage with Policygenius. Fundrise, an investment platform, plans to expand its real estate portfolio amidst falling prices, allowing easy access to real estate investment for as little as $10. Policygenius simplifies the process of obtaining life insurance, providing coverage options starting at $292 per year and some with same-day approval and no medical exams. By considering these financial moves, you can ensure peace of mind and financial security for yourself and your family. Remember, always carefully review investment objectives, risks, charges, and expenses before investing.
True cost of owning a vehicle goes beyond monthly payments: The average cost of owning a vehicle is $8,469 per year or $706 per month, including depreciation, financing, taxes, and fueling costs. These expenses can add up to millions over a vehicle's lifetime, making it crucial to consider them when deciding on car expenses.
The true cost of owning a vehicle goes beyond just the monthly car payment. According to Triple A, the average cost of owning a vehicle driven 15,000 miles a year is $8,469 per year or about $706 per month. This includes depreciation, interest on financing, taxes and fees, and fueling costs. These additional expenses can add up to significant amounts over the lifetime of the vehicle, potentially costing millions of dollars if invested instead. It's essential to consider these costs when deciding how much to spend on a car and to reconsider if a significant portion of income is being spent on car payments. Remember, every day your car is losing value and costing you money.
Unexpected car expenses: maintenance and repairs: Budget for car expenses, create a separate fund, consider trade-offs, invest in quality products
Owning a car comes with unexpected expenses, primarily maintenance and repairs. These costs can be significant and often catch people off guard if they haven't saved up for them. However, if cars bring you joy and value, it's important to find a way to budget for them while still investing for the future. Create a fund specifically for car expenses, and consider the trade-offs between your car passion and other financial goals. Remember, it's possible to have your dream car while still achieving long-term financial stability. Additionally, invest in quality products that last, like a solid standing desk from Uplift Desk, to help you stay productive and focused while working towards your goals.
Burden of Car Ownership: Most people finance a depreciating asset, cars lose 63% of value in 5 years, ongoing expenses include gas, maintenance, insurance, and average car payment is $551/month for 5.75 years.
Cars can be a significant financial burden, especially if you finance them or buy new ones. Here's why: Most people cannot afford to pay cash for a car and end up financing a depreciating asset, meaning they pay interest on something that loses value over time. New cars lose approximately 63% of their value in the first five years. Additionally, owning a car requires ongoing expenses like gas, maintenance, insurance, licensing, and registration. The average car payment is $551 a month for 5.75 years. If you're aiming for financial independence, consider minimizing or eliminating your car expenses by using public transportation, biking, or walking. However, if you need a car, aim to buy a used one and focus on paying it off as quickly as possible to reduce the overall cost.
Small changes in buying a car can lead to significant savings and wealth-building opportunities: Considering all needs and wants, negotiating vehicle price, and securing dealer warranties can lead to substantial savings, potentially adding $279,000 over 20 years.
Making small changes in how you approach buying a car can lead to significant savings and wealth-building opportunities over time. For instance, investing the money from a car payment at a 7% annual rate would result in an additional $279,000 over 20 years. Before buying a car, it's crucial to consider all your needs and wants, such as passenger capacity, fuel economy, and cargo space. Negotiating the vehicle's price and securing additional benefits, like warranties and maintenance plans, can also lead to substantial savings. A key tip is to avoid third-party warranties and instead focus on dealer warranties that come with the vehicle. By carefully considering your options and negotiating effectively, you can minimize car-related expenses and put the savings towards more worthwhile investments.
Use assets to pay for liabilities: Instead of paying cash for liabilities, use assets like rental income or a business to finance them, earning income post-payment.
Instead of using cash to buy liabilities like a car, it's more financially savvy to use an asset, such as a rental property or a business, to pay for the car. This strategy, which is inspired by Robert Kiyosaki's book "Rich Dad Poor Dad," allows you to continue earning income from the asset once the liability is paid off. The speaker recommends buying slightly used cars to minimize the depreciation hit and financing the purchase with an asset, such as rental income or a business, instead of paying cash. This approach can help reduce overall liabilities and save significant money in the long run.
Focus on affordability when buying a car: Determine true affordability and avoid overspending on car payments by not letting dealers manipulate monthly payments or emotions influencing decisions
When buying a car, focus on affordability rather than monthly payments. Dealers may try to manipulate monthly payments to fit your budget, leading you to overspend. Instead, determine how much you can truly afford and stick to that number. A general rule of thumb is not to spend more than 35% of one year's salary on a car. By following this advice, you can avoid overspending on a liability that depreciates in value. Additionally, try not to let emotions influence your decision-making process when buying a car. Remember, the lowest monthly payment isn't always the best deal.
Fire Rule of Thumb for Vehicle Expenses: Limit vehicle expenses to 10% of income or less for financial independence. Maximize a vehicle's value by making it last long or selling it for similar price and buying cheaper one.
If you aim for financial independence, you should limit your vehicle expenses to not more than 10% of your yearly income. This rule, known as the fire rule of thumb, can help you significantly reduce your liabilities and bring you closer to your goal. However, some people might prefer a compromise between 15 to 20% of their income. Regardless, the key is to make your vehicle last as long as possible to maximize its value. If you've made a costly mistake in the past, such as buying an expensive car, focus on making better decisions moving forward. Try to drive your current vehicle for a long time or sell it for a similar price and buy a cheaper one. Ultimately, being mindful of your vehicle expenses is crucial for building real wealth.
Think differently about vehicle purchases to build wealth: Learn to optimize for net fulfillment, strive to die with 0, and make smart decisions for driving nice cars and increasing net worth through podcast 'All the Hacks' episode 91
Making smart decisions about your vehicle purchases can help you drive nice cars while also building wealth over the long term. This requires thinking differently than most people, who may focus on buying cars in a way that leaves them broke. To learn more about this strategy and others for upgrading your life and saving money, check out the "All the Hacks" podcast hosted by financial optimizer and entrepreneur Chris Hutchins. In episode 91, Chris discusses optimizing for net fulfillment rather than net worth and striving to die with 0. By listening to this podcast and applying the tactics, tricks, and tips shared, you can make the most of your money and increase your net worth while also saving more. So, if you're looking to rethink the way you spend money and want to find new ways to boost your productivity and travel more affordably, be sure to check out "All the Hacks" on Apple Podcasts, Spotify, or wherever you listen to podcasts. Your wallet (and your life) will thank you later.
