Why are cars terrible investments? What should I invest in instead?

Category: Finance

Last Modified: 4/4/2025, 9:51:16 PM

Stop Wasting Money on Depreciation: Why Cars Are TERRIBLE Investments and What to Do Instead

Let's be brutally honest: most people view cars as a necessity, not an investment. You're pouring money into something that loses value the second you drive it off the lot. That's not smart. That's not building wealth. That's playing the fool. Are you going to keep playing the fool, or are you going to start building a real empire?

This isn't some fluffy motivational speech. This is about taking control of your finances and building a future where you're not constantly worried about money. It's about making smart decisions, not emotional ones.

1. The Crushing Weight of Depreciation

Think about it: you buy a brand new car, and instantly, it's worth less. It's a depreciating asset. Every mile you drive, the value drops. Insurance, maintenance, repairs... it's a bottomless pit of expenses. You're hemorrhaging money. Are you really okay with that? I'm not. Instead of throwing money away on depreciation, invest it in assets that appreciate, that GROW.

2. Hidden Costs Will Destroy You

Beyond the initial purchase price, consider these: insurance, gas, taxes, maintenance, repairs. These costs add up faster than you think. Are you factoring in unexpected repairs? A blown engine? A fender bender? These aren't just possibilities; they are certainties unless you're extremely lucky. Unexpected costs will sink you, leaving you broke and discouraged. This is where discipline comes in; anticipate the costs before they hit you.

3. Opportunity Cost: The Silent Killer

The money you spend on a car is money you CAN'T invest elsewhere. Think about the potential returns you're missing out on. That down payment could be the seed money for your business, your next investment property, or your next million-dollar idea. You're sacrificing financial freedom for the temporary illusion of convenience. Which is it going to be? Convenience, or your financial freedom?

4. Smart Alternatives: Where to Invest Your Money

Instead of a car, consider investing in:

• Education: Upskill yourself. Learn new, in-demand skills. This is an investment that pays off exponentially. This is where I started.
• Real Estate: Real estate is a tangible asset that typically appreciates over time. It's a proven method of wealth building. Research the market in your area.
• Stocks and Bonds: Diversify your portfolio with stocks and bonds. Learn about different investment strategies.
• Your Own Business: This is the ultimate investment. Building something from scratch, something that is entirely yours. This is the true path to wealth.
• Index Funds: Diversify your portfolio without all the risk of individual stock picking. Start small, learn and grow your capital.

5. Building a Business Mindset

Forget about the car payment. Focus on building wealth. The keys to success are:

• Discipline: Stick to your plan, even when it's tough.
• Education: Continuously learn and grow.
• Action: Don't just dream; do. Take consistent steps every single day.
• Focus: Stay on track, ignore the distractions.

Resources:

• Financial literacy books and courses
• Investment platforms
• Business mentorship programs
• Real estate investment groups

Conclusion:

Cars are depreciating assets. They drain your resources and limit your potential. Stop thinking, start doing. Invest in yourself, your education, your business, or other appreciating assets. Stop making excuses and start building wealth. The time to act is NOW. Don't wait for the perfect moment—it doesn't exist. Take that first step today. What are you waiting for?