In May, 2009, I wrote a post called Free Cars For Life. The post was inspired by a video on Dave Ramsey’s website. The video’s narrarator states “you can drive free cars and retire a millionaire with just this one decision.”
The ideas behind the video are not without a few flaws (such as suggesting that a 12% is automatic), but by focusing on what’s wrong with the idea, we are missing the point.
In August, 2009, we made our first $350 dollar deposit split between two different index funds. Since then, we have made 18 separate $350 deposits for a total of $6,300.00. At the time of writing this post, our account has experienced $777.46 in unrealized gains, which oddly enough is very close to the 12% figure discussed above.
Some Numbers From Our Car Replacement Fund
We don’t exactly know when we are going to pull the trigger and purchase our next vehicle. We don’t have a dollar figure in mind that we are waiting to hit in this account either. I doubt we make it to $26,000.00 per the video’s example, and both of our cars are about the same age. We are currently driving 2000 and 2001 model vehicles and both are in fairly good shape. Again, by focusing on all the “yeah, buts,” I think we are missing the point. Regardless of what happens, even if both cars where to go kaput this afternoon, the fact that we have a healthy fund earmarked for our next car purchases puts us in a much better situation than some of the more popular alternatives.