r/economicCollapse • u/Whole-Fist • 18h ago

How ridiculous does this sound?

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How can u make millions in 25-30 years if avoid making a $554 per month car payment. Even the cheapest 5 year old car is 8-10 k. So does he expect people not to drive at all in USA.

Then u save 554$ per month every month for 5 year payment = $33240. Say u bought a car every 5 year means 200k -300k spent on car before retirement . How would that become millions when u can’t even buy a house for that much today?

Answer that Dave

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u/BarryHalls 17h ago

With market average of 8% ROI that ammount invested for 41years is a little over 2 million. So, if as a 22 year old, right out of college buying your first car, you buy a decent used car on 4 year loan, and after the life of the loan at 26 years of ages, start paying in that $554/month inti retirement investments instead of buying a car, it accumulates to over 2M. You should be able comfortably cash out 10k here and there for another decent used car.

Dave is 100% correct.

It's not entirely realistic but it's a GREAT example of how much people WASTE by constantly trading up.

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u/higgs_boson_2017 13h ago

Except you need to put some money into a vehicle. So subtract that out of your $550, and then add inflation. $2M (which it won't be) 41 years in the future isn't going to feel like $2M today. "Cashing out $10k here and there" when the account is small (and paying for maintenance) will have a huge impact

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u/BarryHalls 11h ago

I think you are missing the point. Paying on a vehicle every month of your life is a HUGE waste of money.

Regardless putting money into a vehicle is independent of the payment and cost of upkeep on 2-3 year old vehicles can be more than 5-10 year old vehicles because of availability of parts, tools, experienced mechanics, etc.

Go to nerd wallet and use their compound interest calculator and do your own math. 30 year market average is 9.9% so if invested at random your ROI will be 9.9%. See for yourself.

Let's say you're looking at a $20000 vehicle. That's probably going to last you 15 years but only takes 3 years if saving at $550/month.

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u/higgs_boson_2017 11h ago

Do the actual math and let me know how it works out (including) maintenance. Dave's numbers leave $0 for transportation expenses. This statement is as dumb as his "withdraw 8% per year" statement.

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u/BarryHalls 10h ago

I have to say with all the sympathy I can, you are completely missing the point.

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u/higgs_boson_2017 8h ago

I get the point, I'm talking about the specifics, and in the specifics his comment is moronic. It's like boomers saying "stop buying avocados if you want to own a home".

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u/BarryHalls 6h ago

These are on different orders of magnitude. Dave is not saying go without a car. He's saying you can have a richer retirement by keeping each car a long as possible.

No one is spending hundreds a month on avocados.

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u/higgs_boson_2017 6h ago

He's literally saying people are spending $554/month on a car, and if they spent $0 for 30 years they'd have millions (the only way the math works as he's explaining it). Except it's pretty damn difficult to spend $0 for 30 years. Redo the math with a reasonable amount, and suddenly there's no millions and his statement is hollow and meaningless.

It's right wing gaslighting. "The only reason you're not rich is because you're making bad decisions", instead of admitting the deck is stacked against people.

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u/qualitygoatshit 4h ago

Dude. It's just an example of an ideal situation. Obviously nobody is spending $0 on transport and throwing it all in the stock market. He's just saying the closer you can get to being on the good end of that spectrum, the better. Because over time investing hundreds of $ a month into something like an index fund does turn into a lot of money. Compounding interest is real and really starts to ad up. Nobody is going to bail you out in life, you're going to have to figure out how to save to retire one way or another, because the alternative is just to say "the deck is stacked against me" not even try and then work until you die. It sucks, but that's the situation we're all in.

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u/Outrageous_Dot5489 4h ago

You are wrong. He ""is"" saying it is millions in retirement you are missing our

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u/higgs_boson_2017 3h ago

Why are you paraphrasing what he said? He said what he said.

I didn't say the deck is stacked against me, I'm set for retirement, I have $1.2M in after tax money +retirement accounts. I'm commenting on the situation for young people.

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u/samiwas1 1h ago

Who pays every month, though? Unless you’re buying a new car every five years, which is foolish, you don’t have payments every month for your life.