How Much Money Should You Waste On A Car?
ars have become the manifestation of wealth. If a person owns a good-looking car or a specific brand, then that person is somebody important.
However, many people don’t have enough money to from month to month, but they have an expensive car. It happens just so other people can validate them and increase their self-esteem.
Yes, people who show off with what they own are people with low self-esteem. So, before buying fancy cars, clothes, and jewelry to impress people, better focus on the root cause of this desire.
A car is a tool to take you from point A to point B with a grade of comfort. Most cars cant take us here and there, but the comfort, looks, branding, and quality are different. For these four attributes, we pay the price.
Of course, we all want a car that gives us a bit of comfort, especially if we travel by car a lot, and we want the car to be reliable.
However, no matter the reliability, we will still need to invest in it like in a child.
Make no mistake; a car is not an investment (asset) but a liability. For this reason, we need to choose it based on our income. Regardless we pick a fancy car if we don’t have the money to buy gas (or electricity) and maintain it.
The rule of thumb is to buy a car worth your four-month income. If your monthly income is $2000, you can afford an $8000 car. If your monthly income is $1000, you can afford a $4000 car.
It may sound too little, but it is the reality. Instead of wasting more money on a car, you would better focus on increasing your wealth by investing in assets: stocks, real estate, crypto, commodities.
Or you can invest in yourself, develop new skills and get a better-paying job. The idea is to invest your money, not waste it on fancy stuff to fit in a fake society.
