Month: June 2022

Last Updated on July 24, 2022 by The MediFi Guy The most important reason not to buy a new car is the opportunity cost of not investing the money spent on the car. Best illustrated using an example: You have R300 000. You can either buy a R300 000 car or a R50 000 car.  You buy the R300 000 car. That’s it. R300 000 gone. But is that really all you’ve spent? The cost of R300 000? What if you buy the R50 000 car and instead invest the…

Last Updated on July 24, 2022 by The MediFi Guy A car is not an asset. Assets make money. A car is a liability. Liabilities lose money. A car loses money in the form of the initial depreciation hit, ongoing depreciation, and ongoing expenses in the form of petrol costs, parking costs, insurance costs, cleaning, maintenance, and repairs. The more expensive the car, the more expensive these costs. If you add debt on top of that you’re adding the expense of debt slavery (interest) as well. It costs more to…

Last Updated on July 24, 2022 by The MediFi Guy Cars depreciate. Which is to say that they lose value over time. Why? Due to ongoing damage in the form of wear and tear over time – which given enough time and use will eventually lead to the car being declared unroadworthy – and the release of newer cars with the latest technology that people are more willing to buy instead of the older cars.  Losing value off the lot The thing about cars, as you’ve probably heard before, is…

Last Updated on July 24, 2022 by The MediFi Guy Debt in general – one could argue in the overwhelming number of cases – is a bad thing. Why? Because being in debt makes you a slave to the lender. And a slave can never be financially free. Not only do you become a slave, but you also pay an extra premium for the privilege of being a slave. That premium is called “interest”. The price you pay for borrowing money.  If one intends to one day achieve financial independence,…

Last Updated on July 24, 2022 by The MediFi Guy Try this quick experiment. Google “worst financial mistakes you could ever make”. Open up the first 10 or so articles/forum posts/blog posts, and do a quick scroll through. You’ll soon notice a trend. Of the many mistakes listed, there always seems to be one in particular that appears on virtually every single list. Usually listed as the number one possible mistake: buying a brand new car. Why is this? The reasons buying a new car is considered to be pathognomonic…