My $500,000 Truck!

me and my fancy truck!

In one of the chapters of my new book, Sometimes You Have To Eat A Crap Sandwich, I talk about buying a car, and the impact that decision can have on your future.  I’m pretty sure there are many books, articles and posts about how costly cars are, not only for the here and now, but what they cost you down the road – so this isn’t a new concept, but a reminder on an important topic never hurts. What I don’t show in the book is the exact calculations of the scenario(s) I discuss. So I thought I would do that below.

I have a 15 year old truck (2005 see picture). I paid it off in 3 years, so I have not had a vehicle payment in 12 years. The Internet tells me that current average vehicle payments are between $400 for pre-owned and $550 for new (and $450 for a leased vehicle). The average of those 3 amounts is $466. That means by not having a car payment for the past 12 years (144 months) I have saved $5,592 annually or $67,104 over that 12-year period. That’s a lot of additional disposable income! 

Let’s now assume instead of just repurposing that money as disposable income, that I invested it…I could do the calculation that shows an annual return of X% per year over that period of time, but I’m a stock investor, so let’s pick some big and well- known names that have been around for 12 years. For simplicity, I am factoring in dividend reinvestment.  Also for simplicity, I am going to assume I invested the annual savings amount every year on first trading day in January. So every January 2 (or first trading day), I invest $5,592 in a stock (I did a lump sum instead of showing monthly…the numbers would be a little different, but either approach drives home the point I am making). 

The stocks I picked were Microsoft, Apple and Amazon. In 2008 Microsoft was a household name, Apple was 6 months removed from introducing the iPhone and Amazon was continuing to grow its online presence and was a well-established brand with consumers.

The $67,104 I saved over those 12 years would be worth the following on May 31, 2020… assuming it was invested the way I describe above:

MSFT:    $401,383

AAPL:     $636,718

AMZN:   $853,479

I did some of what I describe above, and although I wasn’t disciplined enough to invest the entire amount, my wife and I did have an ability to travel and do some things we would not have otherwise been able to do had we spent all that money on a new car every time our old car was paid off. My passport has over a dozen stamps in it because I chose to drive the same vehicle for longer than most people do. Instead of travelling, I could have paid off our house in 12 years, but we like to travel and that’s a trade-off we were willing to make.

If your bank account is full of money and you have more disposable income than you know what to do with, enjoy that new car!  If that is not your scenario, and you want to alter your future and grow your savings, you may want to consider a reliable vehicle that you keep for a while, and invest what would have been payments – future you will appreciate it. I guess I need to say this, because someone is going to misinterpret what I just wrote…so, for the record, this is an individual decision, and I am not recommending any stock or a specific approach to investing… I’m just sharing my opinion and what works for me.


I invite you to check out my new book, Sometimes You Have To Eat A Crap Sandwich, available via the links below.

Get it on Apple Books

Barnes & Noble