Firstly, the bad stuff. Everyone knows that to own a car in Singapore, you need the ultra expensive COE, which entitles you to own a car for 10 years at a cost of about 70k these days, and that's not including the cost of the car. Definitely not cheap. The running cost of my car per month includes the following:
1. Season parking (about $70)
2. Parking at other places ($50)
3. Fuel ($230)
4. Insurance ($90)
5. Maintenance (about $60)
Total: $500 thereabout
So the running cost is about $500. I haven't added in the cost of getting the car yet. I don't think I want to spend anything more than 40k on a car, inclusive of COE. So that means I'm effectively priced out of buying a new car. I went to the second hand car market and got a car for 32k, and that car can still last me for 4.8 yrs before I need to scrap or renew my COE. I paid half of it in down payment and borrowed the rest, so effectively my total cost is about $34k. This is way within my budget, and I really think it's affordable for people who wants to get a car.
Total cost: $500 + $360 (installment for car loan) = $860
Let's just bump it up to $1k per month. I chose to pay 50% and borrow the rest, way before it's mandatory to do so. But think if you're not buying any flashy cars, getting 4 wheels that allows you to move from one place to another should cost around $1.2k per month, everything in. Since I'm sharing the cost with my wife, I think I need about 2-3 more classes to offset this expense. That's pretty alright - essentially I work more so that I can work easier, and that doesn't include other fringe benefits that I'll mention right away.
What's the good thing about owning a car then? I can't speak for everyone, but owning a car is great on several levels for me. Now obviously not everyone works in the same kind of work as me, so the experience for different people differ.
These are the good things about owning a car:
1. You can go to several places in one single trip. Often times, it's impromptu and not planned.
True, you can get a cab, but it's just not the same. Sometimes, thinking about all the hassle of getting a cab to this place, then another trip to another place just make it so troublesome. I ended up just going to one single place to do all my entertainment, groceries and shopping. It just severely restricts your range of mobility because of the hassle of public transport. You can't say I'm spoiled because my family never owned a car before and I've been taking public transport for the bulk of my life, whereas I only had a car for only 2 years. The 2 years is enough to convince me that I should have gotten a car sooner, not later.
2. Saves you lots of energy
Commuting by public transport is tiring and drains my energy level. In a normal workday, it's possible for me to change bus/mrt at least 3 times. It's much more tiring if I've to stand and jostle with the crowd during peak hours. At the end of the day, I'm totally dead from all the energy spent. I don't know about you, but spending my time jostling with crowd drains my energy tremendously. Maybe I'm an introvert, that's why. With a car, I'm relative still full of energy even at the end of my most tiring workday. I don't always get to drive (mostly, my wife drove), so I can compare the difference between taking public transport and a car.
3. Saves me lots of time
Having a car can half my travel time, usually more. A trip from my home to a student's place can take 1 hour. The bulk of the time taken is spent just waiting for the bus/mrt to come. I'll say about 20 mins can be spent just waiting. A longer wait is necessary if you have to change buses/trains. The second biggest time waster in public transport commuting is all the stopping. You have to get to A to B, but in between there are multiple stops for passengers to alight and board. That takes up a lot of time, especially during peak hours. The huge time saver for travelling by car means that I can pack another lesson or two in a day. I think that alone can justify the running cost of the car. I didn't even include taking assignments that is further away from home, but pays a lot more, and is only possible with a car.
I get it that people want to retire early, reach financial freedom, then do whatever they want to do with their lives. Perhaps work life is so terrible that any moment spent working to earn a living is a thought so terrible to stomach. But instead of living a life after retirement, you can also live a life while working towards retirement. A car is just one example where the intangible benefits far outweighs the cost - it might be any other things. Heck, the only reason why I didn't commit to buying one earlier is because I was so put off by the 1.2k per month expense. To this day, I regretted not getting it earlier. I could have spent the same money and got either a better car or a car that I can drive far longer before renewal of COE/scrap.
Don't be blinded by numerical value. Financial bloggers are, by definition, more conservative than the general public. My advice to all financial bloggers is this: Just live life a little. Being a little more risk taking is still less risky than most people, so chillax.
22 comments :
Hi LP,
One more reason to add is to be able to ferry my parents around, more so as they get older. I would still love to bring them to nice makan places, sight seeing etc and having my own wheels will make it more convenient. The same can be said if your other half gets pregnant. ;)
What's financial freedom without being able to spend? Just spend within your means and all will be fine.
Cheers!
Derek
Natural babe magnet too. if you are still single. Missed driving all over and those long drives to malaysia
LP,
I feel sorry for one financial blogger that recommended not having a girlfriend and marry only when we are financially free...
Talk about extreme single-minded focus on money goals!!!???
What good is money if we have no one to share it with?
Live alone, eat alone sure save a lot of money one!
Hi LP
I think it goes both sides. We all already know the bad sides of owning a car but I think in your case it suits you more because of your work situation of having to travel to the students place. Assuming it takes a direct bus for someone to reach his or her work place, does the full logic still applies?
I think it is right to say that one should live life a little bit while pursuing financial freedom but the fact is most people cannot afford to spend 1k a month.
Cars is definitely ex. But u have to understand u have to spend on transport even if u have no car, and your wife too. That is about 200 dollars. If u Take a cab on and off to reward yourself 2-3 times a week, including weekends. U could easily hit 400-500dollars. U have cover running costs.
I need to get up very early for my work, I dun like to work late into the night, so I start work earlier. I usually leave home before 6, and sometimes at 540. There is no bus yet.
Because I have a car, I can get bf at my favorite hawker near my workplace and still get to work by 630.
When my kid is young, I need not worry about crowd, I can stripped him up safely. Priceless.
He is bigger now, so the case for car is weaker, but u have weaker parents now too. Easier to cope with shuttling workplace and clinic check ups for parents.
Hi Derek,
Yes! Ferrying loved ones around is something that having a car can provide. I like the way you said it, "Just spend within your means and all will be fine" :)
Hi Snoopy168,
Haha, I didn't know all types of cars will be a babe magnet..Maybe only the flashier type? Makes me think if the babe likes such things, will they be good wife material? Haha :)
Hi SMOL,
I fully agree. I think being financially free means not to worry about money. But I think it's not at the cost of everything. It's about having the life you want (more or less) and yet able to afford it. When I'm single and a loner, I also saved a lot a lot of money, but I wasn't happy at all, so you're right that what good is money if there's nobody to share it with.
Hi B,
Though I used the example of a car in this post, I really meant it generally. It can also equally apply to anything. My advice for people to live life a little is also not for everyone, it's meant for financial bloggers, or more generally, people who are more conservative and already have the culture and good financial habits. For these group of people, who are usually very tight about money, it's good to let go and experience life. For those who are struggling to save even 10% of their salary, this is of course not suitable advice. And I'm not addressing them in this post.
Though generally, I think if people can make more money by buying a car, they should still get it. Ultimately to me, a car should be used like a money generating asset lol
Ooops, still can't get away from dollars and cents, sigh.. lol
Hi silly investor,
Ah, so the intangible benefits far outweigh the tangible cost.
You know, when I was still deciding on whether to get a car, I was purely deciding on just the cost. I realised I was very narrow minded. Guess what, even my wife was against it because I would be spending a lot more money, and she's not even remotely interested in any financial matters (I'm the one who usually stops her from spending). After reassuring her and even promising to foot the entire cost myself if she can't handle the cost, she agreed.
Now she drives most of the time...zzzz, lol
But you're right, certainly things are priceless. You can't just put a cost to everything.
LP,
Some things in life cannot be measured by money alone and are priceless.
Seven years ago when my SIL was suffering from cancer, my wife decided to stop work to help her with the treatment, which took close to 6 months and the recuperation was another 6 months with regular check-ups.
We discussed about my wife stopping work and I told her sine we had finished paying for our house, I did not need her to earn more money to help with our retirement plans. Under normal circumstances, I would not have bought her a car. (She was driving a company car when she was working.) But the situation was different and I bought her a brand new Altis for $58k then. The car help her to ferry my SIL for her treatments at SGH.
How do you put a price on such a situation? I just want to leave everyone with a statement that we can think about :
"Money you do not spend does not belong to you."
Hi LP,
Its great seeing how you have change over the years, from MUST SAVE 50K a year to now, a more balance individual.
Couldn't have say the above points better myself, cheers.
JW
Hi Matt,
I hope your SIL is okay now.
I agree with you that money that you do not spend do not belong to you. This is not a statement to encourage everyone to start spending every cent they have, but rather an statement to ask people to look beyond their spreadsheet and balance sheets and look at the important issues in life. It'll be quite sad if life just boils down to dollars and cents, isn't it?
Thanks for sharing, Matt.
Hi JW,
Indeed indeed..if you have read my post just a few years earlier, you'll see that I am quite a different person today. Much more balanced, much more happy.
I wonder if it's better to live a life of restrain first, then let go and live life a little, or to live life splendidly, then live a life of restrain. Hmm...I think the former might be easier to handle lol
Hi LP,
Agree with you there, definitely better to live life with a little restraint first before letting go and live a little.
I think end of the day its all about value. I rather go for that tailor made suit which fits better and have better fabric at half the price of a Zegna.
Another thing that irks me majorly is bad eating habits for the sake of saving money. That will bite you in the a$$ after a 10 - 20 year period.
Then again, different strokes for different folks...
JW
LP,
Unfortunately, my SIL succumbed to cancer 2 years go at a young age of 62, even before she can start collecting her CPF minimum sum.
I am not a religious person but I cannot help but think there is some truth in the saying, " Man proposes and God disposes."
Looking back, my wife teased me about how I used to stand in front of a rack of products at the supermarket trying to calculate which one would give better value among the products. I still do nowadays only that I pay more attention to the ingredients used rather than the price alone. Healthier products would cost more and I would gladly pay for them.
Save and plan aggressively for your retirement by all means but please remember to stop and smell the roses once in a while. Some opportunities and occasions won't come around a second time, such as spending more time with our parents. This applies too to the blogger SMOL mentioned about getting married once he is financially free. When you are ready, others may not be available anymore.
Live life without regrets when looking back later about what could have been. We may not live to enjoy the retirement we planned so well.
Hi JW,
You're right. I've to say that in the past, I would really order something cheaper but more unhealthy, just to save like, 50 cts or 1 dollar. It came at the time that I was a vegetarian, and there's a stall that sells vegetarian food at $2 per plate. You know how chinese vegetarian good is like, full of gluten and very oily. Can't imagine I ate that for close to a year - it's not worth it. There's a lot of healthier but more expensive choices for vegetarian food but I guess I did that because it's cheap.
What's the point of saving all the money so that next time you'll pay for the medical fees instead?
Hi Matt,
I'm sorry to hear that.
I think sometimes we just have to close our eyes and have faith and we can navigate our way through whatever challenges that may come. It's a mindset of scarcity that we need to have it before we can enjoy it. This is a mindset borne out of fear.
I must say it's kind of hard wired in me, but I'm trying to change that. I think some financial bloggers are still not passed that stage yet. Perhaps time will change that.
On a long enough timeline, the survival rate for everyone falls to zero. When I realized my life is already ending one minute at a time, I started drawing proportionately what's coming for me at the end of it.
A car is part of my retirement plan. I am living that plan now.
Hi Patty,
I like the way you phrase it. Indeed, we're never going to get out of this game alive, so don't have to be so uptight. Hedge against your own retirement.
+1 Thumbs up for all the comments.
Helped me appreciate life in broader way.
(I'm one of those who are on the conservative side who needs the advice)
Cheers.
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