So I was browsing my facebook page the other day, when I saw a sparkly new car show up in one of my friends’ posts. Being that I am an Investigator for a living, I worked my magic and discovered my friend purchased a brand spankin’ new Jeep Cherokee. I thought it was a little odd that she purchased a new car being that the last time I spoke with her she was looking to quit her part time job at a local photography studio. I didn’t think much of it and I carried along with my facebook friend stalking.
On Friday night I was attending a dinner banquet/fundraiser for a youth group I am part of (YoungLife). While at the banquet, in walked Ms. Jeep Cherokee. We started chatting and I mentioned I noticed she had got a new car. I asked her a little about the circumstances leading up to the purchase. She told me that her last car’s transmission went out and it was going to cost $2,000 dollars to fix. With excitement, she further explained that her car was only worth $900 dollars so it wasn’t worth fixing. Im thinking to myself… “Okay makes sense, time to get a different vehicle.” But then she said “So I went and bought the Jeep.” When she said that, it took every ounce of my energy to prevent from physically cringing. I wanted, so badly, to know everything about her situation. I wanted to know, how much the car cost, how much she put down, and what the Hello she was thinking. Instead, I smiled politely and said “Well that’s exciting.”
Since when did a broken transmission become a justification for a $20,000 loan? I’d bet my right ear she put less than 10% down and now has a couple hundred dollar monthly payment to look forward to. I think what upsets me the most is that she is completely oblivious to the gravity of taking on such a big loan. I desperately want to sit down with her and ask why she didn’t sell the old car for $900 and buy a $5,000 ride? To be fair, she must drive cars until they are on their last legs, so hopefully she will hold on to the Jeep for the next 20 years, but I still don’t think that justifies it. I know most of us PFers have encountered similar situations. What did you do? Do you smile and politely pretend like your excited for them? Do you slap them across the face and tell them their dumb? Where is the line between telling someone how to manage their money and what makes the best mathematical and financial sense?
Depreciating assets suck,
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I used to work for a company where most of the staff is very young and well, foolish. Many years ago a very good friend of mine made a life altering decision that I knew was going to bankrupt him financially and emotionally. He ignored any of my advice. Suffice to say, we are no longer friends. I vowed NEVER to offer advice again. If someone asks me for advice, I will say something like “If you are interested, I have a system and I’d be happy to show you it.” Basically I put the ball in their court. So far, nobody has actually taken me up on my offer to help them out, but that does not surprise me. It seems mean but sometimes people have to learn hard lessons on their own.