Another Way To Buy A Car

Someone was telling me yesterday about how he bought his car. He put a $10,000 downpayment (a windfall) down on it and the payments were a little over $300 a month. He was telling me about how the extra $300 a month was more of a hardship for their family then he had anticipated.

Here's another way to buy that same car. Let's say you'd like to buy a new car that costs about $20,000. You've got an old car that works so either you use an unexpected windfall or you spend a few years saving up $20,000 to buy the car.

Instead of these traditional methods of buying a car you could do his instead: what if you would take the $20,000 and instead of buying the car outright you, put it into an alternative investment with a return of 30% per year that pays monthly. Thus, the investment income per year would be $6000 (or $500 per month) - more then enough for the car payment! This is how the wise and wealthy buy vehicles - they simply buy an investment whose return will pay for what they want.

The best thing about doing it this way is that at the end of the investment (usually 1, 2, or 5 years) you get your initial investment of $20,000 back! So you get a car plus your initial $20,000. Seems like a pretty good deal to me.

Of course to do this you need to be able to save up the initial amount/receive a windfall, find an alternative investment, and manage the risk of the investment. But such things are indeed possible for the average person. Jobina and I have this kind of investment (a 30% return for two years, paid monthly). If we can do it, anyone can!