2825: How You Can Have A Free Car For Life by Andrew of Dollar After Dollar on Financial Advice

[00:00:00] This is Optimal Finance Daily. How you can have a free car for life by Andrew of Dollar After Dollar.com and I'm your host and personal finance enthusiast, Diana Merriam. Now let's get right to today's post as we optimize your life.

[00:00:20] How You Can Have A Free Car For Life by Andrew of Dollar After Dollar.com If you know anything about personal finance, you know that buying a car is one of the worst

[00:00:32] investments you can make. A car is what is known as a depreciating asset, which is just a fancy way of saying its value goes down instead of up the second you buy it. Take a brand spanking new

[00:00:46] BMW for example. You can buy one for $45,000. Oh yeah, those first few weeks are going to feel good. You're going to peruse downtown, blast and ball in on the Bluetooth-enabled technology package

[00:01:02] and step out of the car like you're the boss. Maybe you get yourself a manicure to show off those nails right next to the BMW logo on the steering wheel and post it to Insta.

[00:01:14] Oh, was the BMW logo in the background? I didn't even notice. I just wanted to show off my nails. The problem is most people end up buying more car than they can chew.

[00:01:25] More car than they can chew? That's not a saying. A person can buy that same BMW for $25,000 three years later with 27,000 miles on it. You just lost 20 grand on a kid-pushing machine

[00:01:41] with a fancy logo. Buying a car is for suckers. I'm here to end this. Well, finance is here to end this. I'm just here. Even a child can understand that this is not a good decision.

[00:01:55] If you give someone $45,000 and in three years they give you back $25,000, should you have given that person your money? No. The answer is no. Why do we do it? No matter your car-buying strategy,

[00:02:10] they never hold their value. Unless you're a bike-riding mustachian, we all feel we need to own one. What if I told you there's a way to get what I call a free car? How to have a free car?

[00:02:24] Cars are the kings of liabilities, things that go down from the day you purchase them. But what if you bought cash-flowing assets that paid for your car? Joe Schmo wants a truck. He sees that the truck that he wants is going to come to $25,000 or a $350 monthly payment.

[00:02:46] Joe could buy the truck and make the payments monthly for five years, just like the rest of the world does. Joe does not want to be like the rest of the world. He decides there is another way.

[00:02:57] Instead, Joe looks for a house that he can rent out. He finds a three-bedroom, two-bath, and a decent neighborhood. After expenses, taxes, and mortgage payments, he figures the house will bring in $350 per month. Now Joe has an asset that will pay for his liability.

[00:03:16] This means that Joe buys a house that the profit will pay for his truck. When the truck is paid off, Joe still has his original investment in the house, and it's still producing $350 a month.

[00:03:30] The amazing thing about this strategy is that Joe can do this forever. Someone else will wake up every single day, drive to work, listen to their crazy boss chew them out, all to pay their rent. That rent pays for Joe's truck. Five reasons I love this strategy.

[00:03:48] Number one, you can literally use the same down payment forever. A down payment of say $20,000 on a house can pay for your car forever. You'll never have to come up with a down payment for a

[00:04:01] car ever again. Number two, your assets are paying for your liabilities. Something that goes up in value is paying for the lifestyle that you desire. You don't have to jeopardize your family's financial future just because you like shiny things. Number three, you can buy cars more frequently.

[00:04:22] I believe that you should buy used cars and drive them for long periods of time. I still drive a 2002 Suburban with 200,000 miles as I'm writing this. But with this strategy,

[00:04:34] you can buy another car as soon as the loan is up if you want. Or if you love the car, you still have all of your principal, which is the amount you put down on the house,

[00:04:44] and you can collect the cash flow. Number four, this does not have to be only for cars. Want a boat? Buy a house that pays for your boat. Want a plane? Buy an apartment complex

[00:04:57] that pays for your plane. Want to retire? Buy enough cash flowing assets that pay for your expenses. And number five, other assets work as well. If you're not comfortable investing in real estate, this strategy will work with other investments too. Dividend stocks, index funds, you name it.

[00:05:17] You just may need more cash invested. Real estate works so well because banks are willing to lend you money and you can leverage that money to purchase an asset. This entire strategy comes

[00:05:29] down to getting what you want out of life. Your cash can work just as hard as you do. If you allow your liabilities to be paid for with cash flowing assets, you can accumulate wealth at an alarming rate. Are you willing to give this strategy a shot?

[00:05:49] You just listened to the post titled, How You Can Have a Free Car for Life by Andrew of dollarafterdollar.com. And I'll be right back with my commentary. This article reminded me of something I heard when I first started learning about money.

[00:06:05] Rich people don't buy stuff, they buy assets. At first I thought that meant that rich people are rich simply because they aren't wasting their money on luxuries. But I think this article does

[00:06:17] a better job of explaining it. Rich people don't just buy stuff, they buy assets and then use the profits from those assets to buy stuff. This approach is a key difference between how wealthy people manage their money compared to others. They focus on building a strong financial

[00:06:35] foundation first. By buying assets like stocks, real estate or investing in their own business, they're setting themselves up for long-term financial stability. These assets generate income over time, creating a passive stream of money that keeps growing. The beauty of this

[00:06:53] strategy is that it helps preserve their wealth. Instead of spending money as soon as they get it, they reinvest and let their assets do the heavy lifting. This way their initial capital isn't just sitting around, it's actively working and generating more wealth. In simple terms,

[00:07:13] rich people play the long game. They prioritize investments that will keep making money for them. Once their assets start generating income, they use those profits to enjoy life's pleasures. This strategy ensures that their wealth keeps growing and they have a steady income to fund

[00:07:31] their lifestyle without depleting their savings. But that'll do it for today. Have a great day and weekend and I'll be back here tomorrow where your optimal life awaits.