Welcome to The Weekly B.E.T.™ (Budget Enhancing Tip) from your friends at Prosperity Training, Inc. Every Wednesday we’ll post The Weekly B.E.T.™, fulfilling in part, our commitment to help you reduce expenses and put more hard earned money back in your pocket. Our #1 goal is to help you achieve the continuous improvement of your personal monetary affairs.

Fact: Over 30% of self-made millionaires purchase pre-owned vehicles. Why, do the math:

A new $25,000 car financed for 5 years at 6% = $484.00/mo
A 5 yr old Cream Puff costs $15,000 5 years at 7% = $297.00/mo

Save the difference $187.00 for 5 years (60 months) in an Auto Savings account and end up with $11,220.00. Sell the 5 year old well maintained car for $4,000.00 (or more) add that to the $11,220.00 = $15,220.00 CASH!! Now negotiate your best deal on the new 3 year old  cream puff pay cash and begin to save the ‘monthly payment’ of $300.00 for 60 months = $18,000. Keep the 5 year old car and dollar cost average into a stock market index fund as long as you can. When you must, take out $15k from the index fund for your new 3 year old cream puff.

Do you want to get rich? Say you’re 30 years old and you invest $174.00/month in a 401k at work or ROTH IRA or IRA on your own. If you only realize a 6% annual return in 5 years that’s:

$174 x 12 x 1.06 = $2,213 saved/grown the first year

Total saved grown by the end of year 2: $2,346.00 + $2,213.00 = $4,559.00

Total saved grown by the end of year 3: $4,559.00 + $2,486.00 = $7,046.00

Total saved grown by the end of year 4: $7,046.00 + $2,636.00 = $9,682.00

Total saved grown by the end of year 5: $9,682.00 + $2,794.00 = $12,476.00

So now you are 35 and want to retire at 65 that’s 30 years of 6% compounding interest on the $12,476.00 which will grow to $65,000.00.

All you did is buy a 3 year old cream-puff and invest the monthly payment difference over the 5 year life of the loan.

If you buy a ‘new’ cream-puff every 5 years until you are 65 you will purchase 6 cars.

If you are married that’s 12 purchases. Do the math. Is it a million dollars?? Just do it!!

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