New Nurse With Large Disposable Income

JayHanig · May 1, 2016

Let me say something about your car. When all is said and done, that car is paid for. All it costs you is gas and oil, insurance, and the occasional repair. You can buy a LOT of repairs for what car payments would cost you in a year.

That being said, I've only owned one brand new vehicle in my entire life. I won't make that mistake again. Now all I buy are one year old vehicles... look new, smell new, still have miles left on the warranty. Somebody else has already taken care of whatever might be wrong with it (why wouldn't they? It's under warranty.) Best of all, that same somebody absorbed all the depreciation that car suffered just by being driven off the dealer's lot. Not me.

I then drive it until it starts getting unreliable. My car is a 2000 Taurus. I've been free of car payments on it for 12 years.... roughly $48,000 worth of payments I didn't have to make. It's been garaged its entire life and still looks new. Everything works on it. I'm not embarrassed to be seen in it as a result. I bought it with 26,000 miles on it for a little over $12,000.

I have a 2007 Ranger pick up truck as well, bought the same way for pretty much the same money. Since I paid cash for that one, I've been payment free for 7 years. Another $27,000 I didn't have to pay. Getting the idea?

Transportation is just that. Buy something that looks mainstream enough it won't look out of date for a long time and then take care of it. The money you save is significant.

Before I go, I have to say I wish I'd started out as disciplined as you seem to be. Life would be even better now than it is, and it ain't bad. I was able to retire at 56 and I live at the beach with my house completely paid off.

LDAthleteNurse, BSN, RN · May 1, 2016

Let me say something about your car. When all is said and done, that car is paid for. All it costs you is gas and oil, insurance, and the occasional repair. You can buy a LOT of repairs for what car payments would cost you in a year.
That being said, I've only owned one brand new vehicle in my entire life. I won't make that mistake again. Now all I buy are one year old vehicles... look new, smell new, still have miles left on the warranty. Somebody else has already taken care of whatever might be wrong with it (why wouldn't they? It's under warranty.) Best of all, that same somebody absorbed all the depreciation that car suffered just by being driven off the dealer's lot. Not me.
I then drive it until it starts getting unreliable. My car is a 2000 Taurus. I've been free of car payments on it for 12 years.... roughly $48,000 worth of payments I didn't have to make. It's been garaged its entire life and still looks new. Everything works on it. I'm not embarrassed to be seen in it as a result. I bought it with 26,000 miles on it for a little over $12,000.
I have a 2007 Ranger pick up truck as well, bought the same way for pretty much the same money. Since I paid cash for that one, I've been payment free for 7 years. Another $27,000 I didn't have to pay. Getting the idea?
Transportation is just that. Buy something that looks mainstream enough it won't look out of date for a long time and then take care of it. The money you save is significant.
Before I go, I have to say I wish I'd started out as disciplined as you seem to be. Life would be even better now than it is, and it ain't bad. I was able to retire at 56 and I live at the beach with my house completely paid off.

Thanks for the car advice! I will keep that in mind when I am in the market for a new vehicle. What do you think of my plan for paying off my student loans? Do you think it's a good idea to do it this way?

JayHanig · May 1, 2016

Since interest rates being paid these days are so low, I'd reverse the order: pay off the student loan first since its interest rates are probably higher than what your savings would earn. That advice is predicated on 1) that the student loan costs you more than the interest you'd earn on savings; and 2) that you have the discipline to actually start saving when the student loan is gone. It's so easy to put it off and the road to relative wealth is compound interest. In other words, $5k saved with 40 years worth of compound interest is worth a lot more than $10k placed in an account when you start to panic about retirement. In fact, it almost doubles even with a crappy 1.5% interest rate.

All of that being said, if you doubt your ability to stick to the plan in the slightest, go with your original plan. If you're certain you can stick to it, go with mine. Either way, you are light years ahead of most of your peers, who live from paycheck to paycheck. You may not have noticed yet, but expenses always seem to rise with income. That's why so few get ahead.

LDAthleteNurse, BSN, RN · May 3, 2016

Since interest rates being paid these days are so low, I'd reverse the order: pay off the student loan first since its interest rates are probably higher than what your savings would earn. That advice is predicated on 1) that the student loan costs you more than the interest you'd earn on savings; and 2) that you have the discipline to actually start saving when the student loan is gone. It's so easy to put it off and the road to relative wealth is compound interest. In other words, $5k saved with 40 years worth of compound interest is worth a lot more than $10k placed in an account when you start to panic about retirement. In fact, it almost doubles even with a crappy 1.5% interest rate.
All of that being said, if you doubt your ability to stick to the plan in the slightest, go with your original plan. If you're certain you can stick to it, go with mine. Either way, you are light years ahead of most of your peers, who live from paycheck to paycheck. You may not have noticed yet, but expenses always seem to rise with income. That's why so few get ahead.

Awesome advice! Thanks:)