I have been hunkering down these past several days. It has been peaceful around here with a couple of exciting things that have happened. I'm still cleaning and decluttering my entire property: house, yards, garage. I feel that I cannot move forward, branch out, until this house is in absolutely the most perfect condition it can be in. I'm OCD. What can I say? I lived in chaos for decades and now I have swung in the absolute opposite direction.
I bought a new car. A bronze Toyota. From a dealership! Gah! Haven't I learned anything from my years on the internet, from reading personal finance blogs?
'Never buy new! Stay away from stealerships! Buy something older and run the wheels off it! Ride a bike! Take the bus! Walk!'
I live out in the desert, miles from anywhere. Far too often over the past year, I (we) have had to decline invitations because we didn't have a reliable car to drive right at that moment. Yes, I have been renting cars for the past year and that has been a somewhat successful endeavor BUT ... there is a big dose of inconvenience involved in having to drag someone else along with me to the rental office, waste up to an hour of my (our) time in line while I wait my turn to rent and then repeat the process for the return procedure. When I added up the amount of money I was spending on car rentals, renting for the times when I absolutely needed to, I just knew that I might as well go buy a new car.
I have bought new cars, used cars. New cars have generally lasted me for 8 years before finally crapping out, needing a lot of repair work. My last car, the expensive beast with the performance engine, was purchased by me brand new off the dealer lot. I paid close to $40,000 in cash for the car. At the time I did that, I had zero concept of opportunity cost. Zero. That $40k just might as well have been flushed down the drain because the car turned out to be the most expensive lemon I could ever have purchased. In addition to the cash outlay, the insurance was expensive, the registration was expensive, and the repairs began to really add up into the thousands. That car probably ended up costing me close to $70,000 by the time I add up all the repairs, the insurance and registration costs, the tires I went through, brakes, expensive engine repairs, catalytic converters that were defective and so on. And what would that $70,000 have done for me had I invested it? Opportunity cost.
So, I actually leased a new car. I no longer believe in purchasing vehicles. Why? Because my experience has shown that it just doesn't make sense. The way I see it, leasing is much cheaper and I always get to drive a new car around.
What did I spend to get into a 2014 Toyota? $2000 down with a monthly payment of $160 a month for 3 years. Then I get to turn the car in and do it all over again with a new car if I want to. There will be no tires to purchase, no brakes, no repairs I'm sure. My insurance is dirt cheap because I have no accidents, no claims, no tickets, no DUIs. ("Boy oh boy, I sure have come a long way from the day I sat in the jail cell feeling like a scumbag." ~ Me. Just now.)
For the same costs as renting, I get to park a brand new car in my garage. No more renting hassles, driving across town to get the car back in time. Now, if someone calls me from the beach to meet up for brunch and a bike ride, I can do it and that's the first time I can really say that in several years. The vehicles I have owned for the past few years have all been high mileage vehicles, too risky to drive out of town on long stretches of desolate desert road. The expensive 'high performance' lemon was scrapped over a year ago because I just couldn't afford to keep pouring thousands of dollars of repairs into it. It was pointless. The car was 10 years old!
And that's my point. Had I purchased that Toyota, my monthly payment would've been over $400 for six years. Six years! That's in excess of $28,800 for a car that sells for a hair under $20,000 MSRP. Call it $30,000. Tack onto that $30,000 all repairs (because it will need them eventually), tires, brakes, insurance costs, etc and that $30,000 balloons. At the end of the 6 years, after completing the repayment agreement and based on my own personal experience, I can probably hope to keep the car another 2 years or so, all the while still paying out for repairs, before trading it in again and repeating the process with another new car purchase.
Why the hell would I do that?
At the end of my lease, I can buy the car if I want to for a little over 10 grand. I won't buy it though. I'll leave that 10 grand in the stock market and lease another new car. At the price I am paying each month for a brand new car, it's worth it to me.
I can't ditch the car. I need a car, living out here in the far flung desert suburbs as I do. Ditching the car is not an option for me. I have a life. I'd like to live it. When the opportunity presents itself to jump into my gas sipping Toyota for a drive down to the beach, you can bet I'm damn well going! And I won't have to worry about the car breaking down on me on the way there or back. I can drive, round trip, for under $20.
As I wrote in a previous post, I am slowly coming back to life. It has taken me a long, long time to be able to get to this place and, most importantly, to be able to stay in it emotionally for longer and longer periods of time. Yes, I have good days and bad days but I also find myself feeling some excitement for the future and it has been a long, long time since I could say that.
The Only Way The Fed Will End QE
1 hour ago