2017 Average Car Payment Invested (How Auto Loans Prevent You From Wealth)

so what would happen if you took that car payment you might be making right now and instead invested it every single month today we're gonna be talking about how much wealth you could actually build for you and your family just by investing the average American car payment every single month after you've watched this video it might blow your mind how much money your car payment and your car is actually costing you that's coming up right now what's up guys it's Mike and chipper I am so glad to see all of you once again how is your week bin new to this channel I just want to say welcome highly consider subscribing because every single week on this channel I make new videos that are gonna help you with your finances investments taxes and things that are gonna help you in your career and your everyday life are you guys loving this fall weather I am totally loving on fall weather here where I live in California fall is like basically the only time of the year where the temperatures dropped from the 90s down into the lower 60s and even the lower 70s so the temperature is actually enjoyable now so that's why fall is my favorite time of the year another favorite part of fall is actually the pumpkin the pumpkin painting actually made this guy at work not too long ago and I actually put a play boat on him sorry I just had to share this pumpkin with you it kind of looks like me after a week of tax season okay guys let's get this started back in a previous video I talked about how in 2016 it was the first time in history that the average car loan reached this the $30,000 mark and the average car payment back in 2016 reached the 500 the 500 and $30 a month range now beyond that you know typically in the past car loans would only last or be financed for three to five years starting in 2016 car loans can now be financed up to eighty four months and the average American is taking between six to seven years to pay off their vehicle so what does this all mean for you guys even right now at this point in time as we were getting close to the end of 2017 we are now our generation is paying more for their car than any generation before them vehicles are more expensive than ever and people are paying more and more interest on their vehicles so why does this all even matter to you and me well the reason that matters is because if we're trying to get ahead financially and we're trying to reach our financial goals a car is one of the most expensive things we can purchase and it can do major major damage not only to our current finances but to our future of finances as well so now please join me as we take a step into the shoes the average American and what are we gonna do as the average American we're gonna go get a car and the car we're gonna get it's going to be a thirty thousand dollar car and let's pretend we don't put any money down so we have a thirty thousand dollar car loan now we finance the whole darn thing and let's just pretend our payment is five hundred and ten dollars per month which falls in the national average range okay now I'm really going to show you some examples of how much money you could generate if you were instead not buying a car but investing this money we're gonna look at two examples because I want to give you guys two different perspectives are different ways to look at this in our first example what we're gonna do is we're going to pretend we took all that thirty thousand dollars and just invested it and we didn't invest any more after that we just invested that money and then we let it sit we let it the interest compound on it over thirty years chippers show them the numbers okay guys like I was saying in this first example we've invested the thirty thousand dollars and we're never investing again now through the power of compounding interest we're gonna let this money grow as you guys can see if we invest $3,000 and even if we just get a measly 4% average annual rate of return this money is gonna grow into a hundred thousand dollars after 30 years so we could have purchased that vehicle three times now if we go look at what the average stock market return would be which is ranging between six and eight percent if you got six percent the money would grow to a one hundred and eighty thousand if you got eight percent your money would grow to three hundred and twenty eight thousand dollars if you guys are really good investors and you could knock out a 12% return every year then that thirty thousand dollars that she would have spitting it into a car would have grown into a million dollars after 30 years all right guys in the second and final example we're gonna look on-screen if what would happen if we invested five hundred and ten dollars a month every single year for 30 years and we got various annual average rates of return and we can see what that's good money is gonna grow to right now chipper show them the information okay guys assuming we invested five hundred ten dollars a month for 30 years if we got a 4% rate of return the money would grow to roughly three hundred and fifty five thousand dollars five percent rate of return the money would grow to four hundred twenty six thousand dollars if we got the seven or eight percent average annual rate of return to the stock market the money would grow to six – anywhere from six hundred thousand to seven hundred and sixty-five thousand dollars and if we were a decent investor beating the averages if we could get a ten or twelve percent rate of return on that money our money would grow anywhere from a million to 18 million dollars after 30 years whoa those are some interesting numbers if he asked me now my question for you guys is what would you rather have now that you know this information would you rather have a $30,000 car or would you rather have the chance to someday have hundreds of thousands or even up to a million dollars or more someday the choice is up to you most Americans are choosing the vehicle over a million dollars but they don't even realize it they don't even realize that there's so much lost opportunity cost and the reason they don't think about it and that's really what this video is truly about is that just to get us to think about it a little bit more think about hey you know can I buy a cheaper vehicle well a cheaper vehicle get me the same result in Austin at will there's a lot of options out there you don't have to go buy a brand new car look for used cars I mean I'm going to show you right now why the Ford Windstar is my wife and I secret weapon take a look I hope you all can see this right now I'm filming in my garage with my iPhone this is my wife and I secret weapon are one of our secret weapons in terms of how we're able to save and invest so much every month what you're looking at is a 95 ford windstar van this car has no payment on it it's completely paid off as you can expect based on its age this is what I drive to work every day I just drive it to working back and I'm gonna try to keep this car as long as possible because it allows us to save and invest so much of our money every single month and of course I get made fun of for driving this a car that's so old I cuz I have the oldest car and parking lot now where I work and so I get made fun of but really for the financial security we have they can make fun of me all day long bottom line guys is it's so easy to get a car there every single month I get multiple offers for auto loans every at least two or three every single month to go purchase the new vehicle but you don't have to delay gratification it can really build you know if you delay large expenditures like this but instead invest the money you can truly someday have financial freedom it's not that hard but you cannot be like the average American we just can't if we want to achieve those kind of results you have to think differently you and I have to think differently about how that money impacts s now what the reason I think so many people struggle with the idea of opportunity costs is because it's invisible until you actually calculate what the numbers could be it's completely invisible it's not seen in the real world you actually have to take time and sit down and look on paper what that money would compound to over time at various rates of return I don't know about you guys but what I found to be true in life is that often the person with a nice car is usually broke whereas the person with an older car is usually the person with money and I hope that you can see when I showed you that video of that Ford Windstar I thought I truly do practice what I preach on this channel I well I want to walk the walk and talk the talk I don't want to give you guys fake information or fake advice there's too much of it out there and I'm sick of seeing that I want to give you legitimate information of things I'm doing so that you can do them too if you want to you don't have to listen to a thing I say well I just encourage you to think a little bit more about these large purchases and how they might impact your finances down the road if you want to reach your financial goals if you want to get ahead financially and for the rest of your life and set yourself up well this is one of the best ways to do it is don't take out a lot of vehicle debt find the cheapest car you can find and invest that money strategically plan your finances and run it like a business and someday you too can have financial freedom alright guys if you enjoyed the video make sure you smash that like button share this information with a friend and be sure to subscribe if you've not already if you guys have any questions or comments about anything we discuss in the video just drop them in the comment section down below and I will make sure to get back to you alright guys I just want to say thank you so much for your support I love you guys thank you for taking time out of your day to watch this video I will see you guys next week but until then I hope you guys have a great week enjoy this awesome fall weather we're having and peace