CCC060: The One Thing

Hey converts! It feels good to be back behind the mic! April was a busy month! Taxes were due to be filed and I had and audit for the previous year's taxes. Yikes! My wife and I Bought two houses using the 1031 exchange program to defer taxes on a house we sold in March. We rented both houses in just a couple of weeks. It feels good to have an additional source of revenue. I also helped Steve Stewart from MoneyPlanSOS.com buy a cash car. I recently read a book called The One Thing by Gary Keller and Jay Papasan. There was a great quote in the book. It really resonated with me. "What's the ONE Thing you can do such that by doing it everything else will be easier or unnecessary?" What if I told you if you did this one thing you could retire wealthy? Would you want to know what it is? This one thing. If you knew what this one thing was, would you do something about it? For most people, the answer is no. Shocked? You shouldn’t be. After all, millions of people smoke, eat unhealthy, or engage in other risky or unhealthy behaviors. These are life and death matters. If one won’t change to extend their own life, why would you or I think one would change simply to ensure a better retirement? Well, if you’ve been listening to this show, I’ve been telling. If fact I’ve been telling you since December of 2013. It may or may not shock you, but for most of you listening the one thing is the car payment. Really, the car payment? Doesn’t everyone have a car payment? Isn’t that just normal? Yes it is and there in lies the insidiousness of it. People quietly pay their lives away to drive a newer, sexier, faster, cooler, and whatever other er you can think of. Every day someone agrees to pay away their future for a car. Why is the car payment the one thing? Well, your mortgage is going to something that actually can help you build wealth. We found out in 2008, it doesn’t always, but for most of us and for most of history, this is true. What about student loan debt? It’s all over the news, isn’t that the worst debt? No, a bachelor degree is still worth about $800,000 in additional income over the course of a lifetime of employment. While I’m not encouraging anyone to take on this debt, the average student loan debt of $28,000 seems like a pretty good trade for that average return of $800,000. Do you still have a car payment? Why? Haven’t you been paying attention? Haven’t your heard? Auto debt is dangerous to your financial future! This is not a throw away line I just like to say on my show. This is what I believe! I know, I know. You can’t make that change right now because..…because… you know just pick your excuse. 1. You just “need” a new car.2. You drive a lot, so reliability is important to you.3. You don’t want your spouse, kids, or any other loved one to be stranded.4. You don’t have the cash to buy that first cash car. For some who would be honest it would be all about ego. Maybe I “need” to look successful. Or my favorite, I work hard so I deserve to drive something nice. What can getting rid of your indebted car do for you?You can take a big bite out of your current debt.You can increase your available cash by the amount of your car payment.Save your first $1,000 emergency fundPay off your other debts at an accelerated pace.Start saving for your next cash car, retirement, or child’s education. 4Q 2014:Average new car payment - $482Average new car price - $33,000Average new car loan amount - $28,381Average new car loan duration - 66 months Today, I want you to make a commitment to me and yourself. Today, I want you to do one thing to start on your journey to dump your auto debt. It doesn’t have to be a big step, but it has to be a step, a start, a move in the right direction. Maybe it’s a plan to sell everything in that storage building you’re renting for over $100 a month. Who knows how much you might get? Maybe it’s looking on edmunds.com or kbb.com to see how much your current car is worth. Maybe it is finding out what the pay off is on your current car loan. Whatever it is do it today. Start the journey today, don’t wait. We can all speak of yesterday’s regrets, but don’t live to regret today. Today is the day! Now is the time! Take action! Links: Steve Stewart - 1998 - Honda Civic: http://moneyplansos.com/ynab-vs-everydollar-comparison/ Dan Miller - Why do the rich get richer and poor get poorer?: http://www.48days.com/why-do-the-rich-get-richer-and-poor-get-poorer/ NY Federal Report on Consumer Spending Fourth Quarter 2014: http://www.newyorkfed.org/microeconomics/hhdc.html#/2014/q4 State of the Automotive Finance Market Fourth Quarter 2014: http://www.experian.com/assets/automotive/white-papers/experian-auto-2014-q4-presentation.pdf?WT.srch=Auto_Q42014FinanceTrends_PDF The One Thing by Gary Keller and Jay Papasan: http://www.amazon.com/The-ONE-Thing-Surprisingly-Extraordinary-ebook/dp/B00C1BHQXK/ref=dp_kinw_strp_1 The Hamilton Project - Major Decisions: What Graduates Earn Over Their Lifetimes: http://www.hamiltonproject.org/papers/major_decisions_what_graduates_earn_over_their_lifetimes/ Did you enjoy the show? If you liked this episode, please consider going to iTunes and subscribing. 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I’m looking at this as just one more platform to be found. http://cashcarconvert.com/youtube Do you have a comment about this interview or about the podcast itself? Please leave a comment below. I appreciate every listener.