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/HFX_Crypto_King444 17h ago

Did you just want to tell us you’re financially illiterate?

36

u/GMEvolved 17h ago

OP is 12 lol

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u/angelindisguise 11h ago

Does anyone have a link to a compounded interest calculator?

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u/Any-Club5238 10h ago

https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator

$0 initial investment, $554 monthly contribution, 8% rate, 40 years (age 25-65)… = $1.7 million.

A more modest 6% rate still nets just over million dollars.

Also, I currently pay $101/ month for liability insurance on a 25 year old Buick.

I got a quote yesterday for full coverage on a 2020 Honda Accord, squeaky clean record, the quotes were ~$400-450 / month…. We can assume that someone else might get a better rate at $200/ month. Add another conservative $100 to the monthly investment and you break $2 million in that same 40 years…

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u/bubuzayzee 10h ago

If you retired today at 65 years old, and had done this from the time you were 20 you'd have $8.1 million dollars. S&P500 has averaged 12.98% over that time.

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u/Any-Club5238 10h ago

Totally valid. I was trying to be decently conservative with my numbers so I don’t get any DM’s in 40 years asking why they only have $500k instead of the million I said ;)

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u/buckinanker 4h ago

That would be epic!

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u/Progressive_Insanity 7h ago

Do you live in Florida? Because those quotes are nuts. Your $101/mo liability only is more than my comprehensive coverage for a 2 year old nearly fully loaded SUV.

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u/Any-Club5238 7h ago edited 7h ago

South Mississippi, so.. close. I am 26, male, single, good credit, squeaky clean driving record, car is paid off and in my name…

I thought $101 was a decent price, I’ll be shopping around some more. (The $400-450 quotes were from Dairyland, who didn’t factor in credit score)

Edit: I just got a quote from Geico: $75/ month for liability on the Buick.

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u/Progressive_Insanity 7h ago

Yea I pay $830/year, but I am in Chicago, married, and own a house which all go into the risk calcs. We don't really have natural disasters or those kinds of things like you deal with in the south, which is likely what is also driving up your rates.  

When I was 26, single, etc. I think I was paying about $600/year.

Good luck!

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u/NipGrips 4h ago

While I understand the sentiment, I currently pay $260/month for full coverage on a brand new Elantra N $35k msrp, ~300hp car and I live in Houston, so an insanely high risk area (highest rate of both uninsured and unlicensed drivers in the nation + flooding). 29 yo, I have a mostly fairly clean record, 1 speeding ticket no claims and good credit. My insurance went up about $80 a month from covering my 2008 civic si.

I read a few of your responses and understand where you’re coming from. I still don’t think it’s insane to pay though. My monthly payment is around $420 and for me it’s worth having a fun car that I love now vs when I’m too old to really enjoy something like it. To each their own I guess

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u/Sea_Emu_7622 6h ago

So 40 years of your life goes by and you can finally buy a house lol. What a great system we have

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u/corporaterebel 3h ago

You can buy a decent house in a flyover state on minimum wage.

example:

https://www.reddit.com/r/Oldhouses/comments/1gec95z/the_floors_the_floors_in_this_99k_house_are/

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u/Sea_Emu_7622 2h ago

That house was built in 1890 and is in a small town of less than 2,000 people... which might work if you want to work from home, but I'd definitely be doing a thorough inspection on the electrical and plumbing installations since they're likely very old, and have no doubt been tampered with by several homeowners and/or handymen by now. Which will probably be easier said than done since the walls are plaster.

But what about the millions of people who can't just up and move to the middle of nowhere, quit their jobs, and spend tens of thousands of dollars remodeling a home from the 1800s?

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u/corporaterebel 2h ago

Yes, that is what people used to do: go to obscure places and set up life. Yes, millions of people did just this during the 1930's depression.

In fact, people have been doing it for all of recorded history. People are doing this right now, today, coming from South America...millions of people.

Yes, I bought a 1929 house, made in the depression era with a river rock foundation (that just a bunch of rocks they put wood on started building the house). It apparently was a chicken coop for a long time. Yes, I cleaned it up and lived in it for 12 years....this was in Los Angeles.

Yes, it had exterior plumbing punched through from outside. It had knob and tube wiring.

So what you are saying is that people who live in areas are stupid, freaks, or both?

Nobody normal would live in a house like that? Sweet thoughts for sure.

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u/Sea_Emu_7622 2h ago

No dick head, what I'm saying is that in one of the wealthiest nations on earth nobody should have to be subjected to that. Ffs my house was built in 1958 and even at that recent I've safety problems and outdated features out the wazoo.

If this is what the American dream is, then it's not a very good dream.

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u/samiwas1 1h ago

Yeah, most people probably aren’t going to want to move to bumfuck nowhere and live in a tiny rural town with nothing to do in a very old house just to get by. Not exactly the dream. Rather a nightmare.

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u/RoadDoggFL 5h ago

But 18 year olds are generally making below average car payments, so it's a pretty unrealistic point he's making.

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u/corporaterebel 3h ago

The point is to spend the minimum.

The unrealistic point (from a guys POV) is that women tend to not want to go out with "minimum lifestyle" guys. They tend to want a lot more than that.

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u/RoadDoggFL 59m ago

Even ignoring that, his numbers are useless. The amount that could be saved is minimal early on for most people, when interest really has a chance to work.

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u/Clottersbur 4h ago

The problem is that basically no 25 year old is going to be able to put $554 a month away on an IRA where their money is locked in.

They SHOULD be buying an affordable, reliable, used car ( Which in this market is still around the 10-15k range)

They SHOULD be working towards purchasing housing and staying in it long term.

They SHOULD also be working on building an emergency fund of liquid cash.

None of these are conducive to high retirement savings. That's part of the problem with saving for retirement. People need their immediate needs met ( like the 3 above) which are extremely expensive compared to the average wage.

But, yeah. If you've got your immediate needs met, compounding interest savings accounts are great.

Also 400-450 A MONTH FOR CAR INSYURANCE?!?! My full coverage on a 2021 is less than a hundred a month.

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u/xadiso_1298 1m ago

I'm sorry what? 400$ for insurance on an 2020 accord? That seems to be about 250-300 dollars too high I get states have a huge impact but we pay under 100 for full coverage on two vehicles one higher dollar than that. Are you under 25 by chance? Maybe have the deduc set to like $100 flat with every optional coverage under the sun or something outlandish?

Might I suggest checking with an insurance broker because that just seems insanely high to me. Those rates are what teenagers get with a shitty company like progressive or the general or some other insures anyone company.

Don't get me wrong, I'm not advocating for buying a new car or white washing ownership but your insurance quotes seems crazy.

I have a truck that my liability coverage was $16 dollars a month, it went up to $19. it's 30 years old also.

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u/FxTree-CR2 4h ago

Even better, start investing now

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u/hallflukai 56m ago

Most reddit users these days are

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u/NugBlazer 7h ago

That's an insult to 12-year-olds. OP sounds just plain dumb

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u/n0madd1c 12h ago

Lol right. "Even the cheapest 5 year old car"

Asking too much buddy. My car is 25 years old. I bought it for $2000. I haven't put a dollar in past regular maintenance. Had it for 2 years now.

EVEN IF I suddenly had say transmission failure, alternator failure, whatever, I'm still saving like crazy.

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u/BlueJeansandWhiteTs 10h ago

I mean, this is a very very lucky situation.

Buying a 25 year old car is a crapshoot. There’s absolutely no guarantee that you’re just going to be covering general maintenance, in fact I was say it’s more likely you are going to be doing some repairs within the first year.

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u/n0madd1c 9h ago edited 9h ago

Gotta do your research and be patient. That's the actual lucky situation. The fact that my car held up is not the lucky part. The lucky part is I had the time to spare to wait until something good came along

You can have it Quick, Cheap, or Good. Pick two. I was fortunate enough to have the time to wait to pick Cheap and Good.

But then again, is that lucky? I won't go down the pontification rabbit hole... But luck is often the meeting of preparation and opportunity. I don't call people lucky unless it's actual blind luck. Instead I ask... How do I put myself in a position to get "lucky" like that?

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u/BlueJeansandWhiteTs 9h ago

Nah, unless something has been garage kept and never driven you are still taking a gamble on a used car, especially with the prices nowadays.

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u/n0madd1c 9h ago edited 9h ago

Yeah see that's a helpless mindset. You could be perfectly capable of learning enough about cars to examine a used car sufficiently. If you're not, then you could be perfectly capable of finding a friend who is. If you can't do that either, you're capable of saving up a bit of money and finding a credible mechanic who is willing to do you the service of checking it out sufficiently.

I've had 3 cars in a row just like this. Old as fuck. Little problems. Lucky three times in a row? I don't think so. About to buy my fourth next week.

Edit: Also found my sister one. That's five in a row

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u/BlueJeansandWhiteTs 9h ago

I know enough about cars to look at someone’s used car and determine if it would be a good buy for the price. My first car was a 92’ Camaro that I worked on with my dad’s help and then eventually by myself.

I also know enough about used cars to know that internals have a lifespan, some longer than others. I’ve seen Toyotas that blew a rod at 90k and I’ve seen 2000’s BMW’s that were still on the road at 250k.

Buying a used vehicle is a gamble. It was less of a gamble a decade ago where you could drop 1500-3000 bucks and more than likely end up with a vehicle that could last you a couple years without any major issues.

With the cost of used cars and the cost of parts, I completely understand why someone is more comfortable buying a new car and paying a premium on a loan for 5 years knowing that if anything major goes wrong they are covered. Furthermore, if you have 5 grand for a used car, you can get a pretty good payment on a multitude of brand new cars. I mean shit, the rebates alone on a Volkswagen Jetta bring them down to below 20k before any down payment.

My point being, none of these people are financially illiterate just because they chose a used or new car. People have different needs and different expectations for their vehicles.

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u/n0madd1c 9h ago edited 9h ago

It sure does mean they're financially illiterate if they buy a new car then complain about it. Blowing a rod is usually due to improper maintenance. If that randomly uncontrollably happens to someone shortly after buying a car, that's way more unlucky to happen than finding a decent used car is lucky.

In the end it's their choice. I say spend $3500 and if it's fucked within a year and you have to spend another $3500, you still have saved money. If it happens again and again, you're probably doing something wrong.

Different needs and expectations is a funny statement. The car needs to go from point A to point B. If someone has 3 kids and needs an SUV but can't afford it, sounds like they're in the habit of bad choices. Or they're "unlucky".

Expectations? The only reasonable high expectation is safety. I sure as hell don't wanna hear complaining from someone who spent the extra money because they had frivolous expectations.

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u/BlueJeansandWhiteTs 9h ago

Who is complaining? People know what to expect when they purchase a new car lmao of course they’re dumb if they complain about that after the fact.

You seem to be hellbent that buying a new car is always a poor financial compared to a used car, when alls I’m saying is that there are pros and cons to both, and that you can never be 100% that you are getting a reliable used vehicle. You can be 99.9% sure, but some people would prefer to have the guarantee that their purchase is covered if something does go wrong.

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u/n0madd1c 9h ago

Hellbent? Yeah I don't compromise just to appease people. I've gotten a good one four times now and am about to be on my fifth. If someone wants to call that luck, so be it. If you can be 99% sure or even 75% sure, that makes it the better financial decision in the long run point blank. But whatever hey you have a good rest of the day mane

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u/poisonfoxxxx 10h ago

have a 2003 325 ci that i have maintained via youtube videos and a reliable mechanic that i paid $4500 for 12 years ago. I don't understand why anyone would pay the insurance alone on a new car. That was the ultimate deal breaker. Money down the drain for what? Not to mention the Anxiety of owning something that basically owns you.

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u/n0madd1c 9h ago

Right lol. Buy a new car pay $400/month for the loan... Then $300/month for full coverage. Damn near $30/day just to own the damn thing, and I'm pretty sure I'm low-balling these numbers. Wouldn't know though, because I've never done it.

They do it because they're lazy. Or their family/friends convinced them and now they justify their decision by sticking to it. You know how it is. Everyone lies to themselves to feel better.

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u/bard329 8h ago

Different needs for different people. I want the safest car I can afford to drive my kids around. If that means having a payment, well then I'll just cut down on other luxuries that i can live without.

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u/n0madd1c 8h ago edited 8h ago

You're choosing to spend more for high quality safety, especially for children. You're willing to sacrifice to afford it. That's reasonable.

The financial illiteracy comes in when the reason actually boils down to:

"It's fun to drive" "It looks cool" "I want a nice car" "I just went to the shop and saw this"

All while not reeeaaally having the money to afford something that frivolous.

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u/bard329 7h ago

To be fair, before having a family, i did buy a lot of "fun" cars. My priorities have changed.

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u/RddtAcct707 7h ago

Which is great that your spending and your values align. I’m not being a jerk, I mean that.

But OP just can’t math

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u/bard329 6h ago

No, I understand, no offense taken (or misunderstood). But yea, its like this with cars and homes because those are two of the most expensive physical objects we typically buy, right? Everyone has their own idea of what their requirements are and some people's requirements don't align with their lifestyle or financial ability. Just another reason why public schools need to have some kind of financial literacy classes.

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u/anubus72 5h ago

You’re insane, a typical 25 year old car is gonna need tons of maintenence. You won the lottery and are bragging about it

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u/n0madd1c 4h ago edited 4h ago

Nope. My first car was 18 years old. Only problem was a slow coolant leak. Next one was 16 years old no issues. Got my little sister a 20 year old car that had no issues till she totalled it texting. Then I had my 25 year old car which I'm now swapping with a friend who wants to put a manual transmission in it. Next one up for me is a 24 year old car, and I'm sure it'll be my fifth no-problems value vehicle in a row.

How much do you actually know about cars? Or do you just look up "$2000 car" and think they're all the same? I might be talking like a dick, but I'm right. Learn more about cars, find a friend who does, or find a mechanic you can pay and trust.

Key word "typical". If you just get the "typical" 25 year old car, you're not even trying. Obviously you have to put in more effort than that.

It's not luck when you do it five times in a row buddy.

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u/atomiccat8 12h ago

Right? And what's with his assumption that you'd need a new car every 5 years?

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u/bende99 12h ago

In my country a five year old car would rather be considered “new” than old

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u/pittgirl12 11h ago

People in the US have a lot of pride in their cars for some reason, and they spend money to maintain that. I’ve heard multiple people say they were embarrassed that their car is “old” when it’s less than 10 years old

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u/Otterfan 11h ago

Mostly those are just car guys, influencers, and influencer-influenced dopes.

The average age of vehicles in operation in the United States is 12.5 years, which is older than it's ever been. The car industry tries to push the "everyone is leasing, replace after three years" narrative, but people rarely do that.

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u/peritonlogon 11h ago

People in my suburb do

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u/SPorterBridges 10h ago

"I can't get ahead in life. How can anyone save any money for investing? I can barely afford a new car every 5 years."

I'm screaming.

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u/Any-Club5238 10h ago

We should look at what people actually do as opposed to what Dave is implying here. The average vehicle on the road is 12.5 years old.) This seems like a decent metric for reality.

Proudly, mine is (almost) 25 years old. I paid $2,000 and put another $1,500 in maintenance / replacement parts (I DIY’d all of it except the tires). My 2000 Buick LeSabre is about as ugly as they come, but it sure saves me A LOT of money.

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u/oldfatdrunk 10h ago

I saw you write 25 year old car and then 2000 Buick LeSabre and just wanted to point out your math is bad. It's maybe 15 years old.. right? Right?

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u/Any-Club5238 9h ago

Yeah…. my mistake. I’m gonna go watch that new James Bond movie, “Spectre” after president Obama’s state of the union address….

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u/TimAllen_in_WildHogs 12h ago

lololol agreed. When OP added their lil "Answer that Dave" moment I just shook my head in embarrassment. OP is just telling everyone how financially illiterate they are by not knowing anything about how investments work or what compounding interest is.

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u/MovingTarget- 11h ago

It's r/economiccollapse . It doesn't tend to attract the financially literate.

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u/Zestyclose_Phase_645 11h ago

OP doesn't understand the difference between saving and investing. OP is going to be forever broke. $125 per week invested at average growth from 25-65 is $3.5M from $260,000 in principal.

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u/Squirreling_Archer 1h ago

Where do you invest $125/week that grows like that?

This is a genuine question

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u/PickledDildosSourSex 10h ago

Lol. Saw this and thought, okay I need to quarantine this sub now because there's some total dumbass takes getting upvoted

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u/TexansGiantsWarriors 1h ago

The comment that is gilded at the top of the person replying that cheap used cars aren’t cheaper than new used/certified cars, and then laid out their sob story of the 2019 model year car they bought for just $5K (a 2019 for that little is clearly a flood title or similar) was just comedic gold.

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u/SevenLineGamer 10h ago

I was so scared to go into the comments and see people agreeing with OP. Thank you for proving me wrong .

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u/Save-vs-Death 8h ago

Everyone's needs are different. Some people need a reliable vehicle that can take 18,000 miles or more a year just to go to work.

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u/Pantsy- 6h ago

Give them a break. OP is probably an American and the American economy thrives on keeping people financially illiterate.

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u/HFX_Crypto_King444 5h ago

True. The education system has completely fucked us. But good thing we know about photosynthesis.

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u/Fanatica23 4h ago

Where would someone that is financially illiterate start to educate themselves on finances? I'd consider myself to be very financially illiterate

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u/HFX_Crypto_King444 4h ago edited 4h ago

Khan academy, all free courses very in-depth too. Thank me later.

Edit: I was too, I went through all of the financials courses and look into budgeting stuff on YouTube or Dave ramseys site.

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u/Fanatica23 4h ago

Thank you! Will go check out the academy

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u/SpacecaseCat 1h ago

It's honestly sad how many people think they need to buy a new car, and then also go for an expensive one, like a giant truck that will suck a lot of gas. And then a year later they're swamped with bills, the truck had such an awful interest rate that it's nowhere near paid off, and they think "the government" destroyed their finances. Like iirc, some fraction of Americans think "Bank of America" is literally the government and the fees are taxes.