hey there Tiffany Thomas with the wealthy Tiffany dot com and in today's
video we're gonna talk about why you should not pay cash for a car and before
we dive in if you guys are ready for financial freedom right now comment
freedom below in the comments or give me some other type of comment to help out
the YouTube algorithm so we can get this video out to more people
alright let's dive in and talk about why we should not pay cash for a car and the
reason I'm bringing this up is because I've had two people recently tell me
that they have purchased their cars with cash which is amazing that they had that
much cash to purchase a car with I am giving them full props for that I'm just
thinking while that's good there's something a little bit better that could
be done so you can actually make money on that money you paid for the car which
is just going to depreciate over time so in this video I'm going to explain
exactly what I'm talking about and why I recommend not paying cash for a car in
most situations so let's say we want to purchase a car for $25,000 I feel like
that's a pretty reasonable amount we're not going super crazy and we're not
buying a car that's going to fall apart on us really soon and let's say that we
decide not to pay cash for that car but we actually decide to finance that car
so we get a car loan and we have pretty good credit so we're able to get an
interest rate of 3.25% and that's going to be for the period of five years now
over this time we are going to pay more than twenty five thousand for the car
because we're going to be paying that interest so at three point two five
percent over five years we would actually end up paying twenty seven
thousand one hundred and twenty dollars so a couple extra grand for this car by
financing it but here is the catch now we have this twenty five dollars still
because we financed our car and we want to make this money work for us so we're
going to take this twenty five thousand and put it in the stock market and on
average the stock market turns 8% so we are just going to use 8%
return on our 25,000 that we have invested will use the same the time
period that we are going to be financing the car which is five years and if we
invested that money into the stock market with an 8% return over this five
year period we would actually have thirty seven thousand two hundred and
ninety four dollars so you can do the math I'll do the math for you we are
going to take that thirty seven thousand two hundred and ninety-four dollars that
we made in the stock market and subtract out what we paid for the car by
financing it so that 27 thousand one hundred and twenty dollars which gives
us a total of ten thousand one hundred and seventy four dollars so we have made
over ten thousand dollars by choosing to not pay cash for a car and instead put
that money into the stock market and finance the car I just want to show the
point that you want to be careful with what you're doing with your money while
it might seem great that you can pay cash for a car there's other things or
maybe better things you could be doing with that money to make more money so we
just made $10,000 by deciding to finance this car and put our money into the
stock market into investments so just start to run different scenarios through
your head and see what is really best for you when you're making many
decisions I just want you to take a step back and think what is the best thing
for me to do with my money what's going to make my money work for me so I can
stop working for my money all of the time and really take that into
consideration I understand that some people don't like having debt or they
don't want to have a car payment but think about that over the period of five
years by just investing that full twenty five thousand we just made an extra ten
grand and we didn't really have to do anything extra I mean that would take
maybe thirty minutes to get something set up and purchase a fund or stocks
whatever it is that you want to invest in it doesn't take that
much time but the rewards are so high that you can't ignore the benefit of
doing that alright hopefully you found this video helpful and if you did please
hit the like button to like the video and share it with someone else who would
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videos that would really help me out and we can get this channel and this content
out to more people just as a side note I wanted to share with you guys that we
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hundred dollars invested or whatever but I wanted to share that because I want
you guys to get two free stocks and it's a good way to kind of dip your feet in
without purchasing a large number of stocks or spending a lot of money to do
that and feeling really nervous about it and this way you can kind of just watch
those stocks over time and get a feel for the market so if you're interested
in that I will leave my referral link down below you can check it out feel
free or not and thanks so much for watching I'll see you guys in the next
video