Case of the Colossal Car Payment
Nothing like a big breakfast to start off a long day of debt-fighting. The sun was just peeking over the horizon when I pulled up to the stoplight at the corner of Clark and Main, the Debt-no-bile chugging along. I could smell the bacon, eggs and butter at Mel's Diner from a mile away.But for everything that smells good, there's something that stinks. And it pulled up right beside me. It was a shiny, oversized pickup truck; something King Kong would have trouble reaching the pedals on. A kid was at the wheel, he looked every bit of 25 or 26, if that.
My gut told me something wasn't right. I decided to get his attention. I rolled down my window and waved at him. He saw me and rolled down the shotgun window.
"There's a problem with your car, bub. You need to pull over quick!" I yelled out of my window.
He got a worried look on his mug. "What's wrong with it? Do you see something wrong?"
"Just pull over," I shot back.
The light turned and his tires burned. He pulled in front of me and headed into a parking lot on the right. I pulled in after him and parked alongside. He jumped out of the bucket of bolts and started doing a walk-around." I got out and leaned against the side of the DNB, watching him run himself silly.
He was trying to find the problem; checking the tires, the windows, the engine. I could tell him what the problem was. It was the tires, the windows, the engine and everything else. He didn't own this set of wheels, it owned him, baby.
After a minute, he stopped and looked at me. "I don't see anything wrong with the truck. What's the matter with it?"
“Jack, this thing's got accident written all over it. How much did a boiler like this cost?"
Usually, this is where people get all defensive, like I'm nosing around in their business. This kid really pulled off a shocker; he smiled from ear to ear and started bragging.
"I got this thing fully loaded ... $22,000!" he said. "This thing is first class ... brand new ... and I'm the envy of all my friends. None of the guys I went to college with a couple of years ago have gotten a ride this sweet."
That set off the alarm. I call it my Dave Ramsey radar; my DR radar. Two years ago, this kid was in college? He's just starting out ... paying for the Debt-no-bile would be a stretch for him.
"Where do you work, son?"
"I'm a financial advisor for a bank across town," he said.
"What kind of salary are you pulling down?" I asked him.
"With sales and commissions, I make about $27,000 a year. Not bad, eh?"
Not bad for two years out of college. Way too bad for two years out of college and a car payment the size of Donald Trump's ego.
"How old are you, bub?"
"I'm 23."
"How much is this crate costing you a month?" I said.
He shrugged. "About $430 a month."
My jaw hit the ground. I don't know what hit me harder; the size of the payment or the fact that this genius thought that was normal. He must have seen my reaction.
"So what? It's a car payment. Everybody has one. You'll always have one," he said.
"Son, forget $27,000 a year. Someone who makes $47,000 a year has no business owning a car with payments that high. You don't need payments at all. If you had a bit of sense, you'd save up about $3,000 and buy something small for cash."
He chuckled and pointed behind me at the Debt-no-bile. "Like that piece of junk?"
"Watch it bub. DNB's done nothing to you."
"Look, I work hard and I deserve nice things. I wanted this truck and I bought it. Sure, I might run a little short on cash now and then, but it's no big deal."
That was the kicker for me. Deserve? You deserve a good slap upside the head, Jack. Better yet, I'll use the Crusher to knock some sense into you. I pulled out my calculator and punched in some numbers. Time to blow the lid off this thing.
"Hope you're ready for a stunner, bud. If you take that $430 and invest it until you're 65 years old at 12 percent in a good mutual fund, it'll be worth almost $5.6 million. Hope you like the truck!"
Another jaw hit the ground. But this time it was his.
"No way that's true!"
I showed him the number on the Crusher. He was crushed. I let it sink in for a minute, then I let him have it.
"Besides that, you're probably only pulling down about $1,800 a month in take home. If your rent is $600 a month, keeping that car payment will sink you deeper and deeper each month. You won't have money left for the basics, so you'll just borrow more and more to get by. That's leads to big-time trouble, bub," I said.
"You're still young," I told him. "You get on the right track now and start putting your money to work for you instead of against you. Sell this truck like your future depends on it, kid ... because it does!"
All he could do was look at the ground and shake his head. He kept saying the number over and over again.
"$5.6 million, $5.6 million ..."
He got into the truck, sat for a minute, then looked at me and nodded. "Thanks sir."
"You want more advice where that came from?"
"Sure thing," he said.
"Turn on your radio in about five or six hours. The name's Dave Ramsey ... listen for it. He knows his stuff."
The kid nodded again. "Dave Ramsey," he said.
As he pulled away, I watched him. He started heading back down the road where he came from. Symbolic, I thought. Going from the wrong direction to the right one. That's what I'm talking about, baby.
In the meantime, it was eatin' time. Look out, Mel's Diner. Here comes the DEBTective.
posted by ~Em~ @ 10:57 PM
15 Comments:
=+D!
Hahaha!
i am # 1 comment!
that ws funny em!
that ws funny em!
that ws funny em!
ooooops
srry my computer isnt wrking
lol don't worry 'bout it Jess.
thanx! :) im happy now!:D
lol JESS! It's a bummer u couldn't come with your dad and bro!:(
sniff*....yeah..poor me....:*(
It's ok, maybe next time?
Yah, you better come next time...:)
heheh...lol i will! =D
Alright.....:)
=D YAY!
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