Okay… Let me kickstart with “Wednesdays’ Financial Blog Post“.
Today’s topic is about buying cars.
Is it an investment or a money draining liability?
Before addressing this issue, I will like to make a note, that whatever I share with you is just MY perspective from the spectacles of a financial associate. It doesn’t make me right. It doesn’t make me wrong.It is just MY perspective! 🙂
I have surveyed around, asking those who drives, on their car expenses per month.Many contends that their car expenses (including monthly installments) amount to about $1,000/mth.
My take here is that, from the monetary point of view, YES…solely from the monetary point of view, is that if you use your car, and ABLE to generate an EXTRA business/net profit of more than $1000, your car is an ASSET. If you buy that car, and you are NOT ABLE to generate that EXTRA net profit of more than $1000, your car is a LIABILITY.
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” Your car is an ASSET, if it generates POSITIVE CASHFLOW.
Your car is a LIABILITY, if it generates NEGATIVE CASHFLOW. “
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I feel that those who are married, especially those with kids and aged parents to look after, should have a car.Other than convenience (like sending your kids to school or aged parents to hospital for regular check ups) as one of the primary reasons, the distribution of car expenses per head is more widespread.
Average expenses per head is significantly lower.
That is where having a car is a PRIORITY.
hmmm….. So now is the time for you to analyse, whether your car is an asset or money draining liability. You can use the below example as a catalyst.
If you are self employed (like me) or running a business, you can try to rent a car first, to gauge the expenses involved per month.
Once you are VERY SURE, that your car is an asset, it is time to get one!
It not only makes your life more convenient, enhance your social status but also give you the piece of mind that, “Hey!… My car is helping me to save or MAKE MORE MONEY every single day!….” 🙂
p.s. By the way, if you wish to discover a simple & halal way to create a positive monthly cashflow and calculate your net worth for FREE, then please click here…
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This post was written by:
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Heheh..smart move bro..A good view on purchasing of cars..(:
Hi, I agree on the car being an asset or liability concept. More often than not, (I know of some) wking adults who have to painfully set aside half / more of their monthly paycheck to finance their car loan repayments. Can you imagine? On top of financing your car’s monthly usage (petrol, etc), you have to fork out hundreds for loan repayment.
I guess purchasing a car is definitely MORE than just low deposit amount and drive away. Must really plan before taking the key. We have to be more aware and alert customers than to be influenced by the “Pakai Dulu Bayar Kemudian” (Use first, Pay later) credit schemes. Lower your liabilities where possible, so we wont wince and whine when receiving our paycheck monthly.
Sometimes we have to ask ourself, do we really need to get a car or are we just buying for convenience sake? Will it be more convenient to take the public transport or setting aside a whole chunk of your pay? Thanks helmi, for bringing up this topic. =)
Azhar >>> Thanks for dropping by my blog. Btw,if you intend to buy a car, I will have to review your “cashflow statement”. 🙂
Suhaila >>> Thank you for elaborating my post 🙂
Yup… There are many questions that we have to ask ourself, prior to getting a car.The deep rooted mentality, “Biar papa, asal bergaya” (its okay to be cashless, but look stylish/rich) has to change progressively…
We, financial consultants, will take the leadership role in educating the public of proper methadologies that one need to adopt in managing their personal finance.
Insyallah, with active seminars conducted by our local entreprenurs, and generous insights, reviews by our local, financial bloggers, this attitude will change progressively for the better. Amin! 🙂