Rethink your instant gratification process and remember this awesome quote from our friend Stephen Covey, “a satisfied need no longer motivates.”


Check out this Lexus example from the book  You’ve Earned It! (How I Refused Anything Less Than Success And You Can Too):

But we will also go into a deep dive and crunch some numbers.

I bought a Lexus that I paid $43,000 for in the summer of 2006 I still own today, and it has approximately 435,000 miles on it. I paid it off in mid-2012. So, the cost of ownership was about $5,500 per year because of how long I owned it and minimal maintenance costs which included tax, payment, insurance, and upkeep. I’m in the process of selling the car under its value at $2,000, so let’s deduct that. Now the overall cost of ownership is down to $5,344 annually. You must account for the fuel cost because that’s not a write-off when you deduct mileage, so that was $3,000 per year or $250 per month. This brings the cost of ownership per year back up to $8,344. Then while owning it I was able to write off an average of $0.54 per mile, so let’s say 290,000 business miles driven at $0.54 per mile equals a write-off totaling $157,140 over a twelve-year period or $13,095 per year. This means I did not have to pay the 28 percent tax on this amount of money each year and it was treated as a deduction on my taxes.

What all this means is when I started my new career as a senior marketing specialist and started my new LLC in 2006, I was able to write off and deduct my vehicle as a business expense.

All these calculations show I drove a nice car that was very reliable for twelve years and in the end—after fuel, maintenance, car payments, taxes, and insurance—I made $8,751 per year (or $729.25 per month) to drive a Lexus. Yes, that’s right I was paid through tax deductions to drive my car and was able to save six years of payments after it was paid off on top of the tax write-off advantage.

Under non-business circumstances, or in the case where a person buys a new car every three years, an average vehicle would have cost $8,698 (or $725 per month) as a cost of ownership. The Lexus purchase showed a break-even compared to other vehicles on cost of ownership without the business write-offs, but you could be driving a Lexus, and with the low maintenance after year six start saving those payments. This break-even is only because I have a three-times higher fuel cost with my travel schedule. An average driver would save using my example by owning this car for twelve years. Now I could have bought a used Lexus—which I did on my next purchase and feel will be an even better return—but my new purchase in 2006 worked out fine.

My Lexus payment was $719 per month, so after six years I put $719 in a savings account as if I still had a car payment. And that amount saved was approximately $51,000. In the book The Millionaire Next Door by Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D., there is a great chapter called “You Aren’t What You Drive” and this goes in-depth about millionaires and their vehicle purchasing habits. It’s a terrific book.

Forget my example as it relates to the additional business write-off advantages for a minute. Here I will illustrate a non-business owner example.

Carried over from the first vehicle example above I will show you how this $51,000 saved at the end of the five-year payment-free time frame can make a big difference in your life over time.

Let’s say you take $15,000 of the money and pay cash for the next vehicle, but maybe buy used or even a salvaged vehicle. This would put you into a no-car-payment position and leave you with $36,000 cash. Now invest the $36,000 with a conservative growth rate of 6% for the next five years while you own your car payment-free. At the end of five years the $36,000 would be worth $51,558. Your growth without even investing $1 outside of what you would have been wasting is $15,558 (WOW). Keep saving the car payments and repeat every five to ten years.

If you added the first car example with the second example, for just 20 years you would end up within the sequence below.

First: Buy a reliable car and regardless of when you pay it off, own it at least ten to twelve years.

Second: Invest the money you saved while driving your car after it’s paid off, in my case in year seven. We will use my example for simplicity. I saved $51,000 from years eight to twelve during ownership by saving the payment amount I would have been paying if I had a car payment.

Third: Take a portion of the money you saved and pay cash for the next car. In my case, I paid $15,000 for the next car–a 2012 Lexus with 100,000 miles–leaving $36,000 that I invested in real estate, but we will use the stock market investment for this example. Investing $36,000 in the stock market (what’s left after the $15,000 for the next car) shown above for five years is an estimated $51,558. Get here by investing the car payment in the stock market right after the car is paid off. I used a conservative 6% return.

Fourth: After you have owned your second car for 10 years, investing the money you would have spent on a payment of $500 per month, vs. my first example at $719, combined with your already invested $51,558 from the previous vehicle, you would have built a retirement of $98,923 after just 15 to 17 years. This is with a conservative 6% return and using only what would have been a car payment to invest. This does not even account for the tax advantage of investing this money vs. spending it. Remember of the 20 to 22 years you had a car payment for the first five, and from year six through years 20 to 22 you invested what would have been a car payment. During that time you even used some of the cash saved to pay cash for the second car. So no out-of-pocket cash was technically used, and you made a ton!

I know this is hard to fathom, driving only two cars for 20 to 22 years, but if that’s hard to deal with, you could just make a purchase that’s 50% of what your first car was (In my example $719) so maybe buy a car that’s $360 a month, invest the rest and still see a nice retirement built from a little sacrifice.

These are real examples and can assist you in building a significant portion of what you will need in retirement without much sacrifice. I know because I’ve done it.

This is one piece of the puzzle, but I would encourage you to wrap your head around this way of thinking so you can be well on your way to financial peace of mind and developing a process to achieve eventual financial freedom when used with other smart investments strategies.

Here are some stats to consider:

Research by R.L. Polk says that the average age of a modern vehicle is 11.4 years, while the average length of time drivers keeps a new vehicle is 71.4 months — around six years. I’ve seen this number as low as four years in some research.

CNN Business wrote that in 2017, 43% of American drivers had a car/truck payment and of them, 6 Million were more than 90 days behind on their payments.

The average auto loan interest rate today is around 6%. If you take today’s average auto payment at around $550 plus interest, you would pay about $4,000 in interest after five years of owning your vehicle.

Experian, a credit reporting agency, said that “34% of Americans have sub-prime credit.” Sub-prime credit equals a higher interest rate on your auto loan.

Investopedia said “those age 50 to 55 have saved an average of $124,831. While these may all seem like healthy amounts, all of these savings are well below even the most conservative goals. And will not be enough by retirement age.”

Please comment or email me at I would love to hear your thoughts and or success stories.