How Cars KEEP YOU BROKE! (STOP BEING POOR)

Cars STOP you building wealth and achieving financial independence 😭. Today I share THE TRUTH about How Cars KEEP YOU BROKE so that you can save money and STOP BEING POOR!! 😊. If you are paying car financing (hire purchase, PCP, zero finance), this is one to watch!

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★★ ABOUT US ★★

MARY:

I'm married to Ken and we have two boys aged 6 and 4. I'm a Londoner, born in Hackney! :)

Day to day, I run the operations of The Humble Penny as a creative - doing everything from marketing to video editing. I studied Multi-media design and technology at Uni.

When I'm not creating, I love vegan food, traveling, working out and doing some outdoor fun things with my husband and kids :)

KEN:

I'm a husband to Mary and daddy first and foremost.

Former CFO by day with over 12 years experience in the investment business. I'm a Chartered Accountant and hold an MBA from Cambridge University.

To explore my creativity, I'm a blogger, youtuber, speaker, etc. I create from my experiences as a family man and First Generation Immigrant.

I have a passion for all things Personal Finance, Business and Personal Development. I also love Photography, Music, Travel, and Sport.

We became Financially Independent aged 34 and our story has been featured on the BBC, Mail Online, Channel 5, Metro, etc.

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Massive thanks for watching and following our channel :) ♥

Best, Ken and Mary

★★ WHAT THIS VIDEO IS ABOUT★★

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#cars #financialindependence #money

[TheHumblePenny]

What car do you currently drive? and how much are you paying per month in financing for it?

[ese]

I bought a £600 Astra and that earned me £5000 with side hustle during the lockdown 😀

[shumba]

Got rid of my car £200/month car and bought a £400 banger and the freedom I feel when I drive that car is so much more better than the feeling I had driving the car on finance ! Cars are a liability

[buthlezi]

My wife and I have NEVER financed a car. And we never will. The last time we bought a car, the "friendly" dealer tried to get us to buy a newer car for another 5K, on finance. We said no, and walked away debt-free...

[moneybee]

Depreciation, Insurance, Maintenance, and the mental depreciation of worrying about even the smallest nick or scratch. Cars certainly are money, time, and energy pits!

[CalFamilyBBQ]

I've gone from a brand new Mercedes AMG paying out £450 a month to a Nissan juke... The salesman thought I'd lost my mind reading it in! 🤣

[bigmort]

Dear Ken....well you my friend are a genius ! We are about to buy our house....we are also about to take delivery of a new Volvo xc40 on finance for £450 a has just been cancelled! 🤩 if I had not of watched this video we would of been £450 down, you have just saved us a fortune! Thank you so so much 🙏🏻🙏🏻🙏🏻🙏🏻🙏🏻🙏🏻

[cathyjoenganje]

Beautiful teachings. You are extremely good at your job. I get what you are saying and can see that nowadays cars are more of a status statement and that's not being helped by the speed at which they are being produced coupled with adverts that tickles the car saliva. I am of African descent and love cars but the good thing is that I have never bought a car on HP just saving and paying for what I can afford because of what my parents used to tell me "always cut your coat according to your size". Old school but sensible. I have never believed in the Jones's instead I create my own affordable Jones-city and have implanted that into my kids. Thank you for this and all your videos. I have learnt tons from them and actually making relevant changes. I am an avid follower but silent. First time dropping a line. Keep it up. Bless you.

[jameslynch]

You are right but you also the third reason why people have cars is because it is a hobby or interest.

Being financially frugal is good but also, you have to enjoy your life so if you can afford it and it doesn’t impact the quality of your life (I.e you save/invest and don’t have money worries), I don’t see the issue.

[isfiftyslowfsport]

My old car was a bmw, that was a huge money pit, I sold it and bought a used lexus cash, no car payments, probably the best decision I've made, no issues, reliable and low cost for maintenance, it's basically a high end toyota, I'm good

[EdmundBaileyUK]

Haha so true!! I like that I drive around in an old car with almost 100k on the clock... a sense of satisfaction from looking after it and maintaining it!!

[kevinketchate]

I'm so grateful for this sound knowledge you're impacting our life with. I believe our problem is lack of projection. We see things at the moment that's why we can't actually figure out the opportunity cost of some non vital expenditures we make on daily basis which tends to cripple our finances.

[cieratime]

I take the bus or train. Sometimes use uber/bolt depending on factors. No point owning a car if you live in London, tfl is the best!

[downwind_david]

A great video again. Here in Australia, the whole financial picture around the purchase of cars is muddied further by the government allowing many employees to 'Salary Package' their vehicles. What this allows you to do is make payments out of your pre-tax income against the costs associated with owning a car. This allows you to put money aside for car payments, fuel, insurance and maintenance first, thus reducing your taxable income. If you're a higher band tax payer, then this can be a very attractive proposition and one that I initially went for after much spreadsheet number crunching. However, after a few years of doing this, I have realised that my decision was based around one major false assumption.

I need a car, there's no getting round that. I live in a rural area with a 80km round trip to work and there is no public transport at all. I have tried to reduce the depreciation factor by only buying cars that are 3 years old (one of the rules of Salary Packaging is the car can't be more than 8 years old at the end of finance period), and this usually means they have already lost about 50% of their value. When you crunch the numbers, I save about $1200 per year between paying for the car via Salary Packaging (using finance) compared to paying cash and the extra tax on my income.

Where the whole thing falls down is the initial assumption that you would buy the SAME car. Obviously the companies that run these programs are very clever in marketing how much you could save compared to buying the same car outright and paying for all ongoing costs with post-tax income, and it makes sense to you as a consumer that you should compare apples with apples. Why wouldn't you?
However, the reality is that if I was paying cash, I would not need to buy a 3 year old car and therefore could get something older that was just as useful and a lot cheaper. I bought a $30, 000 car through Salary Packaging and therefore buying a car with cash that was $6000 cheaper (equivalent to the 5 years x $1200 savings) would have left me in exactly the same position financially. I'm sure I could have actually found something in the $15000 range that would have been fine and I could have invested the $9000 difference. Lesson learnt - once I pay out this car, I won't be Salary Packaging again, even if it does mean I pay more in tax.

[lamayengineeringservices]

It's all well and good saving for the long term but you have to live and enjoy your life man.

[chrismorgan]

Thanks Ken spot on. I bought my first new car on finance realise what a waste of money that was its nice having shiny new things sometimes but not always the smartest move. My most recent car a BMW 2 series 7 seater 2 years old bought for cash I then went out to pay back the money I spent by buying a real asset a rental property. I know exactly who to share this video with I will let you know if it works!

[DiabetesConsults]

Gosh 🙆🏾🙆🏾🙆🏾🙆🏾. This is eye opening. The question is what if one doesn't have that initial money to buy a car outright but you need a car to get go about your day?
Will definitely be looking into this further as my car is due to be changed soon.

[laosta]

Was thinking of buying myself a new car. Thanks for keeping me in check!

[mark]

I drove my old car to 246, 000 miles! It was such a good car... we now have a BMW (2014, don't judge please!) paid in cash, and plan to drive it as long as possible. We are now a one-car family, it has been great for us in terms of all that extra money going to investments. Good video Ken!

[tmaniable]

Thank you for this video! I don't have a car and I hope I can get away with having a small motorcycle for as long as possible. Would love your thoughts on a lifetime isa!