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2008 goal - New car

February 22nd, 2008 by Kenric

I mentioned having a goal that I wanted to reach with another ebiz site yesterday.  Robert Kiyosaki has always said that the wrong question is “Can I afford it?” and that the correct question is “How can I afford it?”  The thought process behind these two questions are completely opposite.

Can I Afford It? 

For example, if you are able to put $500/mo into your savings.  If you want a new car you might focus on one thing, the monthly payment.  Suppose that the car you want will cost you $599 a month. Do you are ask yourself,  ”Can I afford a $599/mo payment?” How do you determine if you should buy this car?

(BTW, paying cash vs. financing a car is a whole another topic that I’m not going to even touch here)

The car is $599 a month and you can currently afford only $500 a month.  You tell yourself that you can afford this car by simpy cutting out fine dining and lower youring cell phone package a notch.  Why would you let a car get in the way of your enjoyment of a good dinner and gabbing away on the phone.   This is the savers way of thinking. Is the car worth it?  Are you going to sacrifice one thing to get another every single time?

How Can I Afford it?

Instead of going through your monthly budget and figuring out what to sacrifice to afford this car, why not do the opposite?  Figure out how you can make an additional $599 a month.  If you can do this, you can continue your fine dining and cell phone habits and still sock away $500 a month into your savings.

With this train of thought, you will keep increasing your income without sacrificing what you like for something else that you want.

Quick analogy here:  Suppose your income is a faucet, your bathtub is your savings, holes in the tub represent your expenses.  Most people plug up a hole so they can create an equal hole somewhere else.  Going this route your tub will never get full.  Instead, concentrate on adding more faucets or increasing the flowrate of the faucet.  At some point you won’t be able to create holes fast enough to keep the tub from filling up.

My 2008 goal

I currently drive a 1999 Toyota 4Runner.  It has about 160,000 miles on it and it really does run great.  I like having an old car that I can beat up.  I’ve had 3 stupid self-made accidents in the past year.  Twice I’ve closed the garage door on it and once I hit a tree in my backyard (yes, I was driving it in my backyard).

I have decided that time has come for a new car.  My car of choice is the Toyota FJ Cruiser.  This may change, but for now, it’s the target vehicle.  This car costs about $22,000 used.  My 4Runner is worth about $5,000.  The difference is $17,000 give or take a grand.  I have calculated that my car payment would be about $385/mo for 60 months with no money down.

So my goal is pretty simple, create a new business that will generate $400/mo.  Once I have completed that goal I will go out and get my new car.

I believe that real goals motivate people more than just purely making money.  While some people can be motivated by $400 a month.  I tend to need a concrete goal.  I can picture my new FJ Cruiser while I’m working on the ebiz.  It gives me more motivation and a definite target to shoot for.

Posted in Ebiz2, New Car Goal |
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