Get Your Wife a Car Today
Mike wants to buy a different car for his wife. She's driving one with 250,000 miles on it. Mike has about 20 cars since he buys and sells cars. Dave tells Mike he needs to buy his wife a car.
QUESTION: Mike in Sioux Falls wants to buy a different car for his wife. He’s debating whether or not to put his savings on debt or the car. She’s driving one with 250,000 miles on it. Mike has about 20 cars since he buys and sells cars. Dave tells Mike he needs to buy his wife a car.
ANSWER: You’ve got a bunch of collectible cars and your wife is driving a piece of crap. It’s got 250,000 miles on it. Really. This is your wife. No wonder she’s mad at you. If you’re broke and trying to get out of debt, that’s one thing. You’ve got 20 cars, and you’ve got her in a 250,000-mile one. Mine would’ve strung me up, buddy. Duct tape would’ve been involved.
I don’t care what you sell. You can decide, but your wife needs a $20,000 car now—$13,000–20,000 is good. You’ve just got to do better by your lady than that. You can’t be having this many toys and then she’s in crap. That doesn’t work.
I believe your family ought to be debt-free and your wife ought to be in a decent car. I would be in the business of selling enough stuff and/or using some of your cash and/or using some of your income—those three sources—to where, within one year from today, you ought to be debt-free. In other words, I don’t think it’s wise to own $250,000 in collectible cars and have $80,000 in personal debt. You don’t have to go sell them all today. If I woke up in your shoes, I would sell them today. You’re not going to do that. That’s probably not going to happen for you. You’ve really got to think about this because you wouldn’t borrow $80,000 to buy cars. You’ve paid cash for those cars as you’ve gone along. The only thing you borrowed $80,000 for was for equipment for the business. But in a sense, because you’ve got this much tied up in cars, you have borrowed the money for them in a sense on your balance sheet.
My prescription is the first thing you need to do is go buy your wife a car today. That’s the first thing you need to do. Then you need to get the debts paid off within a year by selling enough stuff to cause that to happen and/or make the money to pay it off in a year. You can’t go along like this. This is not a wise thing. You have this big huge life over here to one side—cars and business and equipment and all these things. Over here on the other side, your wife’s in a $500 car. Over here on one side, there’s this big huge life you’ve got, and over here on the other side is $80,000 worth of debt. This financial plan going forward has to be more about your family and less about you. It doesn’t have to all be about your family, but it’s got to be less about you and more about “we” as a family prospering into the future.