This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
Most peoples’ bank accounts are smaller than their cars’ price tags
Them: I just bought a 200k car.
Me: Congratulations! So how much money do you have in the bank?
Them: Around 50k.
Me: Oh. Okay…
They’re 150% confident in their financial situation and have no concerns, and they’re making it work.
But they have no savings, undiversified investments, and a high expense load.
Eventually, they will learn the lesson needed to elevate their economic thinking, but they are severely limiting their financial outcomes and maintaining a high-risk economic lifestyle.
It’s easy to say you can afford a car when you can finance it, but financing a car doesn’t mean sh*t. It just means you have enough credit or creativity to obtain a car.
That’s it.
Don’t overhype your financial situation unnecessarily.
A solid financial situation for buying a car equates to having more than the car’s price tag in your bank account. Though this may seem radical, it’s practical and ensures you never run yourself into a dark financial situation for a piece of metal.
What About You?
Is your car worth more than your bank and investment accounts?
If your answer to this question is “yes,” you’re not alone; you’re in the same boat as most people.
At a point in time, society became more comfortable driving ON cash instead of driving WITH cash.
Appearances Don’t Mean Everything
I feel more comfortable having cash than driving on cash because once you finally learn that appearances aren’t worth everything, your financial habits transform.
If you live this way long enough, then you’ll have more flexibility to drive on cash without compromising your financial accounts.
You’re no longer driven by shallow desires or trying to keep up with appearances like your broke neighbor.
You realize that you don’t have to live a better life than others. It only matters that you’re living the life you genuinely desire.
Live like no one else so you can live like no one else. The quote makes sense. It’s a temporary sacrifice for a long-term reward.
What To Do If You’re Going To Maintain Debt
Unless you’re doing some Robert T. Kiyosaki magic and leveraging debt for a greater purpose, such as building wealth, if you’re going to maintain debt, have that same number in your bank accounts, so you can always pay that debt off at any point.
Furthermore, if you do this, you will always maintain a positive net worth (outside of your home – unless you decide to pay cash for that as well).
If you buy a car, have that same amount of money in the bank and more.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.