Building Your Wealth Instead of Driving It Into the Ground

andrew hallam

andrew hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (Wiley 2011) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use.

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8 Responses

  1. Andrew,

    I totally agree with cars being depreciated assets and a money pit. I don't include them in my net worth just for that reason. I am also guilty of enjoying the cars with a good tap – until last year that is. Enough was enough last year when I bought my first car to commute a few months after replacing our family car. I am still paying for cars as you have noticed though. The used car I bought for commuting to work is intended to be used by my kids when the time comes I figured. I find it hard to resists the temptation but after buying the last one my comment to myself was: "I am not buying another one until my mortgage is paid!". That's because it always cost some money … Money that could otherwise used on a wise investment.

    Is it worth selling after a year? I could probably get nearly the same amount on my Honda Accord but I like it. The strategy to not loose money is either you paid a really good price or the driving you do on it for the year doesn't change the price much. Interestingly enough, coming out of a store on Friday, I overhead a lady telling one of the store employee that she can put another 20K km on the car and still sell it for the same price. It was a Land Rover model and I told myself that she can't have bought it new due to the new car 'smell' depreciation.

    A regular reminder of bad habit is nice. It helps reinforce the good habits.


  2. Hey Passive Income Earner:

    One of the smartest guys I ever met bought a brand new Volvo back in 1989. In 1996, we were talking about new cars versus older cars, and he gave me his philosophy. He liked the new car effect, knowing that nobody else had ever driven the car. And he claimed that he would take great care of it, and he'd only replace it when it completely wore out.

    Last summer I went by his place to notice that in the driveway he had…..the same 1989 Volvo, still looking great after all these years.

    There's more than one way to be financially astute.

    Your idea about keeping your car until the mortgage is cleared is a great one!


  3. Great read Andrew! I enjoyed reading the analogy about the gushing tap into a bucket. So true. There are certainly many bright people out there, but not necessarily many who are financially literate; as I like to say "common sense isn't so common".

    Keep up the great work Andrew. I'm convinced you're going to have a large cast of followers on your site in the months to come. Cheers!

  4. Andrew Hallam Andrew Hallam says:

    Thanks Financial Cents. I also look forward to reading more from you. Readers, you can click on the blue "Financial Cents" above this comment to check out his site. It's a very good one.

  5. Andrew Hallam Andrew Hallam says:

    Hey Passive Income Earner:

    Thanks for the comments. I have to say that I think you're driving the right kind of car. Toyota troubles aside, I think they're amazingly durable vehicles.

    I wonder if that lady was right about her Land Rover maintaining value. From my experience, those "rarer" vehicles often depreciate quickly because repairs are expensive and it's tough to find qualified people to work on them.

    My gut says she's rationalizing her purchase. What do you think?

  6. Hey Andrew,

    You wrote:

    Would you be interested in exchanging links? My webmaster put a link to exchaning links at the top of my homepage. Interested? We could double our power.

    I respond:


    Can you ask your webmaster how best (read in: html code) I could add a link to your site?


  7. Will do–I'll ask him.



  8. Faiz says:

    I have been pondering over purchasing a new car for the past few weeks ; and today i was almost on the brink of buying one.Your article has refreshed my thinking which had lost reasoning.Banks lure one to purchase them with easy cash offers.We tend to forget the large depreciation costs that come along on such investments.


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