21st Sep 2013, 10:57
You can do the same with real estate and flipping cars. My parents had an auto repair business. Started buying cars for under 500, and flipped them up and up and up. They were for sale from the moment I turned the key. Kept a townhouse, rented it and started from there. After capital gains, the profits bought some nice cars. Doing this since 30 has never deprived the household. Just was wondering how a Prius purchase would have made a huge difference in what I missed at retiring at 40. Some risk is involved on our direction, but the rewards were great. You have to live somewhere and drive something. Make that work for you and buy some new ones being reviewed on Car Survey. It's a nice resource as well, and I use it.
24th Sep 2013, 07:20
I would find this hard to do with a family with 2 children. Forgo day care and find free ways to watch my children etc.
Being extremely frugal loses quality of life, just to retire a few years earlier. Drive and enjoy something nice and keep your health up. And work a few years, vs stagnate and scrimping with little monthly income after the early retirement My uncle worked full time with 2 part time jobs always on the go. Did everything cheap and still dropped dead at 56. I balance my time to do some of everything and have fun.
24th Sep 2013, 14:57
There is a lot of risk in flipping cars and houses. In particular, real estate speculation is what drove the economy into a recession. Flipping cars is even more risk-prone, because that market is at the mercy of the overall economy. If the economy is bad, people tend to sell off their "toys" first and that saturates the market.
As mentioned in a previous response, the Prius in question here is only a small part of an overall list of choices that have helped us save money and live comfortably.
25th Sep 2013, 08:11
I buy cars right after Thanksgiving, when Christmas and fuel bills arise. And when snow is on the ground. It's a great time to buy low, all cash. I flip after warm Memorial Day. A whole summer awaits. This works with the right ones, and includes 5-17 ft, economical to own pull and run, center console boats and desirable motorcycles. How is it risky? The profit from previous ones have made them free from repeat buys. If you know what you are doing and don't buy oddball cars, you can make out very well. All you need is a space and wait. In theory you could live under a bridge vs buy or rent. Is it particularly desirable.... not especially. I see zero risk as I drive my cars vs have a piece of paper at home with quarterly results. I never buy more than 1 or 2 at a time and enjoy them. You can live a higher quality of life vs scrimp.
26th Sep 2013, 18:54
Not everyone buys their new cars and owns them with just the 9-5 only job. My positive rental income from my first ranch home sits in our driveway.
30th Sep 2013, 17:49
Perhaps it works for others, but flipping cars and houses is certainly not what I would call a super safe bet. The issue is that when one buys a car, all-cash, well it's just that: they have all of their cash tied to that product, and so they are at the maximum risk levels. That's very different from say - putting in 5-10% of your annual income into stocks and mutual funds, and letting the market do the work for you. Then again, this isn't really a site that deals with financial concerns. We all have our different ways.
The way I look at it is simply that my batting average so far seems to be to keep cars or trucks for 20 years. In that case I am keeping them 50% longer than the average American. Seeing as how the average econo-car costs about $20,000 and we have two vehicles, that means we saved $40,000 just from not selling them as quickly.
4th Oct 2013, 10:59
I would rather enjoy the 40k and drive down a beautiful coastline with the top down to dinner. My dad said you can't pull a UHAUL with a hearse. Meaning all the money you amass does you zero good in the graveyard.
6th Oct 2013, 12:49
Being super safe is usually not going to make very great wealth. The ones that go into business or grasp opportunities do. I like to balance, rather than live cheap. What is really great is new cars that were paid for after a rental property settlement.
8th Oct 2013, 15:04
Being safe means being smart. All one has to do is look at general performance trends, such as what the overall stock market has returned for the past 100+ years. In all truth, if one simply invests a moderate sum of their income into traditional investments - and we are talking such "boring" things like 401k's, mutual funds, and so on, then chances are good that person will be fairly well-off later. I have family relatives who simply did this, didn't flip stuff or try get-rich-quick schemes, and are millionaires.
Cars are only a small part of that process. Perhaps to some a car is very, very important to them and key to their enjoyment. But I also get a sneaking suspicion that for most people, it doesn't matter what they buy. That new car feeling will likely be gone in the period of 2-3 months. The other thing is that the "new car" feeling goes for just about any car. I recall my Dad one time bought a early 80's Datsun Sentra. The car had no power steering, no power brakes, no nothing. It was as plain-jane as they come. I was excited over that car when we got it. Not because it was "New", but new to us. That was also the case with my truck, and this Prius. But in time they were simply cars to get you from one place to another. It could be any car. It could be a Ferrari, Bentley, muscle car or whatever. Humans get used to things and their surroundings, and that "thing" becomes more of a background. That's human nature.
So as such, it seems a little ill advised to spend 10's of thousands of dollars on what amounts to a limited time of vehicular euphoria. I know people who do exactly this same thing: They buy cars all the time, like they're going out of style, spending a ton of money and why? Because they get "tired" of that "new" car. So the difference here is that I value money a bit more than just trying to chase after a temporary thrill - and an expensive one at that too.
Oh - and BTW, I actually live on the coast and drive on it every single day. So I'm already there.
9th Oct 2013, 12:05
You can speak for a solo viewpoint. Will your money be there later? It shows on paper. My 401k took a bath in 2001. Hope the banks are safe and the government stands behind your insured funds. The coast always looks better with the top down, with positive monthly income from a tangible asset.