A monthly car note is one of those bills that most people try to get rid of as soon as possible. They are so happy when their automobile monthly payments are over because they no longer have to send in payments anymore. They can then relax knowing that the car is paid off and go back to business as usual. Let me explain to you why this is a mistake. Your financial goal should be to keep writing a check for the same amount of your car note for the rest of your life.
Keep Paying A Car Note
You are probably thinking that I am crazy for suggesting that you should keep sending in car payments forever. Actually, it makes good financial sense.
I am suggesting that as soon as your car is paid off that you keep writing the same check but you change the payee to yourself.
One of the biggest mistakes that people make is that they get in the habit of making a car payment for 3, 4, or 5 years and then stop as soon as the car is paid off. They take the money that used to go towards the car payment and find some new bill to spend it. The money is quickly wasted which keeps them from ever realizing the savings of not having a car note.
Use The Car Note Money For Investing
My strategy is to keep you paying the same amount of money forever. Once your car is paid off, you simply keep writing the same check. You can either use the money for stock investing or put it in a savings account. You should keep doing this month after month as if your car payment never stopped. You could easily save $5,000 or more inside of one year. You would be surprised at the amount of money that you can rack up in a short period of time.
Let’s say that you bought a Toyota Camry and have a car note of $400 a month for 4 years. Every month you mail a check for $400 to Toyota Financial Services. You will have paid your automobile finance company $4,800 per year and a total of $19.200 by the time that your loan is paid off. Once you make the 48th payment, you should write the $400 check but make the check out to a different payee. I
f you are investing the money, you can make the $400 check out to your broker. If you choose to save the money, make the check out to yourself and deposit it in a money market account or high interest savings account.
The beauty of this method is that you will never miss the money because you have gotten used to paying it. Savings and investing has become a regular bill that you will never miss.
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BUY LIKE BUFFETT – Make Money Investing The Warren Buffett Way
