Buying a new Car vs buying a used Car

Buying a new car is every sane living men dreamt about once they know how to drive. But the price of cars nowadays isn't cheap for an average people to buy new ones. Not to mention the price of spares, road tax, fuel and maintenance needs depending on the car brand you choose for daily commute.

Cars is not anymore a luxury item it is a necessity but, owning them is not a good investment as the value deteriorates faster than any other investment. The fact is new cars loose 12% to 25% each year once it is drove out from the showroom. On average a new car will loose 60% of its total value over the first five years of its life. The depreciation value will be depending on the used cars brand and type demand in the local used cars market.

The rule of thumb in investing and saving is you do not invest something that can depreciate in value. Once you bought an investment it must me increase in value at least 10% to 20% annually in order to be Financially Independent People (FIP). The idea of only business people can be financially independent is not correct. People who are not doing business but managed their money wisely will also be financially independent.

If you have to invest for a car weather it is a new or a used you need to look into your yearly income. If the car payment including it running cost is more 25% from your total net income then the investment is not worth. Example if your net income is $60,000.00 per year or $5,000.00 per month, The cost for running and hiring a car in annual is $15,000.00 or $1,250.00 which includes hire purchase fuel and maintenance. This is the maximum value of your transportation cost in annual. The is only a suggestion because Financially Independent People focus on being debt free and increase the value of their investment.


Below is the link to check the depreciation value calculator to check the value of your car.

https://www.omnicalculator.com/finance/Car-depreciation

Why does Broke People Stay Broke?

Human for the last millenium have creating boarders and country on the surface of the earth. This is forged by wars and ideology created between them. For the last century most people walked to work. Nowadays they commute by new means of transportation. Life is changing rapidly for the last 50 years. With the birth of internet, it is changing even more faster.  The way people receiving and transmitting information as well as communicating between them becoming more easier without any political or ideological boundary.

The only things that does not change for the last 100 years is the School class room. Human should change the way they educate other people especially their young ones. The technology is there to help educator educating other people in a creative way. Most of the subject thought in schools does not help students ready to face real life challenges. Since the last 50 years student are only focusing on achieving "A's" or 'B's but does not make them "real people in real life".

It is very ruthless for the more slower students which are "C's" and 'D's" student as they are forced by parents and teachers to get more "A's" for the subject they learnt at Scholl, where most subjects they learnt does not having any added values in order for them to face real life challenges. But, some of this "C's" and 'D's" students strive in their life and become super rich or financially independent. Whilst other remain poor or work paycheque by paycheque. Why is this happening? Is it because of luck?, Is it because of Effort? Is it because the way they see life? What can we learnt here so that we can share and make all people care for each other and becoming financially independent together.  I suggests we do not classified  them as rich people but as "Financially Independent People" or FIP. Broke people just broke people because, even though they are having highly paid yearly income they are still consider broke because their ability to manage money is very bad.

This FIP is less than quarter of human population but study suggests that only 1% of them from the total human population owned more than half of world's wealth (Credit Suisse).  This gap is getting bigger each year. Is helping broke people with financial aid really help them? Most of the FIP thinks that by helping broke people with money makes them even broke. Is this a true statement?

My point of view is the only thing that change them from broke to FIP is the ACTION they take rather know what the situation they face and do nothing their whole life.

Finally, broke people should invest first in their education before doing real financial investment in their life. Broke people should invest most of their time and money to learn about money, currency, gold and silver, housing, real estates and debt management. Then, things will be different.