FI is achievable, even with bad habits. But you will really need to work the levers of income and manage expenses to make FI a reality.
Every good member of the FI community should be driving a 15–20 year old junker.
I have a confession to make. I have an obsession with cars. I’ve owned more cars in the last 30 years of my adult life than I care to admit. These cars have impacted my journey to financial independence.
I’m doing better now, though. I have a ten-year-old car. Oh, and a late model heavy duty diesel truck. Please don’t report me to the FI police. I don’t want to lose my financial independence card.
Despite my unhealthy obsession with cars, I was able to leverage FU Money and take a much-needed mini-retirement that started late last year. I took this step earlier than I ever expected, although admittedly, my financial goals would have been possible much sooner if not for my obsession.
I’m not writing this story to brag about how I was able to throw away money on cars and still reach my financial goals. I’m writing today for two reasons. First, there is hope for those like me who are deep into a career and have carried a financial vice along the way. Second, if you are young and haven’t started throwing away money on cars, I can attest that cars are not the answer to the problems you are trying to solve.
The Car Obsession Genesis
I didn’t get my obsession with cars from my parents. For as long as I can remember, they have driven reasonable cars and, in many cases, driven the wheels off of them. Not to mention that my parents were, in my opinion, pretty financially responsible and lived off of a limiting income. Serving in the United States military is admirable, but it doesn’t pay very well.
I idolized my uncle when I was younger. He was a great guy who lived life loud and proud. I always remember him as a fun-loving person who always had a new car. Boy, oh boy, did my uncle have new cars. I had no idea at the time that my uncle basically lived from paycheck to paycheck. I just knew him as this bigger-than-life fun uncle. Tragically, we lost my beloved uncle 20 years ago. He lived his life big, and I always looked up to him.
When I was in the Air Force, I bought a POS Mustang that sucked every penny I had to keep it on the road. Well, it sucked more pennies than I had, and I ran up some awful credit card debt to try to keep that hunk of junk running. This terrible car ownership experience soured my opinion of used cars, and from that day on, I purchased only new vehicles.
A Growing Car Problem
By the time I was 30, I knew that I wanted to retire before turning 55. I had no idea what I needed to do to make that happen. I simply knew that I didn’t want to be working in a stressful job forever.
I formed a relationship with a financial advisor, who was our guide. She seemed perfectly content to accept my plans to add a new car. All the while, she pushed us to increase our savings rate. It all sounded good. In hindsight, she was content because we were pumping more and more into the high-cost investments that put food on her table. I had no idea at the time, though.
We continue to add a new car every few years. I thought I was doing good because we kept our cars for six years before rotating in a new shiny specimen. We were earning more and more, and I felt like we were rewarding our hard work with a new car. I loved every one of those new cars for a while.
Every car was fancier and more expensive than the last. The euphoria produced by that new car smell lasted less and less.
Financial Enlightening
I grew wary of my future after more than a decade with my financial advisor. We were setting aside more and more of our paychecks, and frankly, the money under the control of my advisor was performing worse than the funds I had in EFTs in my 401k.
I started reading FI blogs, most notably Mr. Money Mustache, in 2014. Soon after, I sent my financial advisor packing and redirected my portfolio to EFTs. At this point, I finally understood how destructive my car obsession was.
We stopped buying cars and kept driving the good vehicles in our stable. I redirected more and more of our earnings to our investments, and thanks to a great market, we saw tremendous results.
When I could see the likelihood of financial independence on the horizon, much earlier than my goal of 55, we purchased another vehicle. This one serves a purpose other than self-indulgence. We love to travel and explore, and we bought a truck to tow a travel trailer. Unlike most of my previous car purchases, this one was calculated.
The FI police would still issue me a ticket for violating the financial independence code.
Lessons from a Car Obsession
I wouldn’t change my journey, even the mistakes along the way. These experiences have shaped me, and I feel more and more that they help me appreciate the mini-retirement I am experimenting with now.
I will say that buying new cars on my journey is probably the most negatively impactful move I’ve made in my financial journey. The smart move is to follow the advice of the FI experts and drive a beater. There’s no shame in that. No one cares what you drive.
I really mean that, no one cares.
Your journey to financial independence will be much easier without a pricey obsession like mine. FI is achievable, even with bad habits. But you will really need to work the levers of income and manage expenses to make FI a reality.