How to Pay Cash for Cars - Lesson 3: Drive Free Cars

Drive Free Cars

Continue to think out of the box and things get really wild. You buy a used car for $12,000 and you still have $20,000 sitting in your car fund earning 12% on average. Even if you never contribute another dollar to your car mutual fund you'd be able to buy $12,000 cars every 5 years from now on! The returns you'd earn on that mutual fund will pay for your cars for the rest of your life!

Lisa always buys good used cars and she has never paid over $10,000, so she knows this works. Yes, you will have the occasional repair, which is rarely more than the cost of a car payment. If the returns on your fund are a little lower for a few years, you buy a little cheaper car or wait a year or two to upgrade. Your cars are now free with the proceeds of the mutual fund and you will never have a car payment again. Pretty cool, right! Well, don't stop there.

Next...retire rich & live generously

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Brian and Lisa Petersen, lead the Financial Peace University course at Autumn Ridge Church. Many concepts like the one discussed in this article are taught in FPU. Brian and Lisa want to help you be successful with “Paying Cash for Your Car”, and welcome your questions and dialog. They can be reached at brian@vegetablefreak.com.