I Just Bought A Time Machine

Not this time machine!

I just purchased a time machine. It’s not my first, but is my nicest. Hopefully I’ll keep this one for a while!

According to this source, the average driver here in the U.S. spends $9,641 (and that’s using $2.25 per gallon fuel figures) per year for the privilege of driving a vehicle. You can think about this a few different ways.

To afford this type of expense on an on-going basis, one would need $241,000 in capital using the 4% Safe Withdrawal Rate ($9641/0.04). I typically use my average portfolio yield instead for a more accurate picture of how much I’ll need in investments to sustain an expense without selling assets and get the larger figure of $275,000 needed based on my portfolio yield of approximately 3.5%.

Do I want to save an extra $275,000 so that I can tote myself around in a big metal box? Not really. There’s a lot of things I can do with that kind of capital. Think about that money in terms of years. It took me three years to go from $5,000 to $100,000, and that was with a very aggressive savings and investment plan. Taking even that kind of progress and extrapolating that out it would take me about 8.8 years to save up the kind of capital necessary to simply own a vehicle and then pay for the fuel, maintenance, depreciation, repairs, insurance, taxes and other miscellaneous expenses it would come with at an average rate.

8.8 years? Check this out. I just fast-forwarded my early retirement by about…8.8 years.

I very recently bought a 2009 Honda Metropolitan 49cc scooter. My brand new time machine!

100 mpg baby!

Okay, so this isn’t my first scooter. And actually this is an upgrade over my 16 year-old scooter which I recently sold to raise the capital to make room in my stable for the Honda. But that’s not the point of this post.

The point is to start thinking about how much your car is really costing you. Maybe you need a time machine too. They come in many flavors. Your feet can be a time machine. Try walking around. A bicycle can be a time machine. Not only do these examples shave years off your journey to financial independence, but it also pays you dividends in the form of better health. Even a cheap car can be a time machine if used correctly. Spend $2k or so for a car, drop the insurance down to the minimum and limit your driving to longer trips you can’t accomplish by bike/walking only and you’ll be well under the figure that AAA quoted above.

I paid $1,300 for my time machine. Certainly more than the $700 I paid for my last time machine (the 16 year-old one linked to above), but this bad boy gets a true 100 mpg (a lot more than the 55 mpg I was getting with the old 2-stroke) and it’s just a dream to own and ride. It’s really the scooter I always wanted, but they’re hard to find as they don’t come up for sale often. I jumped on this one within three days of the post on Craigslist. I found a co-worker who wanted to buy my scoot and in the same day sold my old scooter and bought the Honda.

But let’s get back to that $1,300. I saved myself the need to have about $275,000 in capital at a 3.5% yield to fund an average of $9,641 in annual expenses for a car, right? It gets even better from there. By not spending $9,641 over the next 9 years (my target early retirement date) I’ll have an extra $141,000 in my pocket (using a 7% compound rate using this calculator). So that means I’ll actually be saving myself about $416,000 by staying away from a car at an average expense rate. Huh? That’s crazy, right? It is crazy. Math can be pretty crazy and eye-opening when you actually sit down and calculate out big expenses like a car.

Say, you don’t spend that much on a car? The average is crazy? Well, I’m not so sure about that. I had a 2006 Pontiac G6 before I started this journey to financial independence. This was no fancy car and I mainly drove it to and from work which was only about 8 miles away and I even got a big break on maintenance and repairs because I work at a car dealership. It had a 4-cylinder engine that sipped gas. I had comprehensive and collision car insurance on it, but because of my excellent driving record and great credit rating I had fairly low rates. How much was this thing costing me? About $450 per month, or $5,400 per year. Don’t believe me? Try looking up some of my old budgets when I still owned a car, like this one from March of 2011 where I spent $511 on car expenses. And this is coming from someone who lived very close to work and got great deals on maintenance. Contrast these figures with someone with a big SUV who lives 30 miles or so away from work, and doesn’t get a big break on repairs. You can see where the expenses creep up in a hurry!

Finally, I want to just come out and tell all my loyal readers that my plan now is to never own a car again. For real. I mean never. Working in the auto industry I see first-hand just how much of a cash drain they are. But when I actually sit down and do the math even my jaded eyes are bulging out of my skull. I’m going to continue building my life in the future around not owning a car if at all possible. I actually quite like not worrying about parking any more, or filling up a big gas tank at $50 a pop, or sending in a $90 check to the insurance company, or buying a set of tires for $900. Oh and I’ll never get a speeding ticket riding around on a little scooter. I’ll also never have to worry about sitting in rush hour traffic on the highway either.

So, that’s my time machine. I believe it’s not only going to save me hundreds of thousands of dollars, but it’ll also shave years off my journey to early retirement. Imagine someone came to you at 50 years old and said they could give you a time machine that allowed you to retire 10 years earlier. How much would you pay for a time machine like that?

How about you? Plan on buying a time machine any time soon?

Thanks for reading.

Photo Credit: terabass/Wikipedia

Comments

  1. Anonymous says

    Jason,

    In the Toronto, Ontario area I know people who spend an inordinate amount of money per month on their vehicle. Some people (in some cases couples have 2 vehicles because they go to work in oppostive directions) travel more than 100 km round trip, pay 407ETR toll road charges (do a Google search on 407ETR just to check out the toll charges!!!) and then they have the usual costs associated with operating a vehicle.

    …and they wonder why they have more month than money!!!

    Common sense isn’t common!!

    Love reading your blog. Keep up the great work. Cheers.

    • says

      Anonymous,

      Or I could put the $240k towards buying my own personal tank. That way I could make sure that even if a car rear ends me I’ll survive. A tank is much safer than a scooter or even a car (over 30,000 people die in car accidents every year in this country).

      Best regards.

  2. says

    Awesome Jason! Love how committed you are to your journey! I think most of us, if taking a really hard look, will find tons of excess in our lives that far exceed our needs. It is simply a matter of pushing ourselves to the point of cutting back and making the leap. Like most things, it might be uncomfortable at first, but everyone has the ability to adjust and will adapt with time.

    • says

      w2r,

      Thanks! I’m definitely committed to the journey. I guess it shows, huh? :)

      And yes, absolutely. There is a lot of excess. If you are okay working for that excess and have no problems with the burden the excess puts on you then so be it. What I’m doing isn’t for everyone, and neither should it be. But it can’t hurt to ask if you’re really happy. I asked myself that question a few years ago and was surprised at the answer I gave myself. I’m significantly happier now than I was just a few years ago. This works for me.

      Best wishes!

  3. says

    Barring moving to the middle of NYC, I don’t see myself ever cutting my car. Yes, it adds expenses, but it also provides so much utility and freedom as to be invaluable. Everything from grocery shopping to trips to the vet would be far more difficult without it. Even worse, would be that my life would be limited to the whatever is in walking or biking distance. Which in this area isn’t much. I like to go out on the weekends and explore the surrounding sites. That would be flat out impossible without a car.

    • says

      MFIJ,

      Well having a car isn’t all bad. Like I pointed out in the article, it’s possible to have a car and still turn it into a time machine. I would only recommend making sure it’s a very cheap and un-fancy vehicle and one that you only use when you absolutely need it. I think a lot of people would be surprised how well they would get by if they all of the sudden found themselves carless.

      Another way to look it at is just to recognize the cost of the car, do the math and budget for it. I found the costs to be ridiculous and have vowed to keep a car out of my life for as long as possible. Other people will naturally find the costs less ridiculous based on their own personal views and priorities. It’s just important to be honest with yourself about what you’re getting out of the car and exactly how much that convenience is costing you.

      Best regards!

  4. says

    Definitely shocking to see how much even frugal people’s car expenses add up to. Though I will say that ‘average’ expenditure is obviously a bit high, and a dedicated FI-seeker who needed (or wanted) a car could most likely get that yearly cost WAY down to where it probably only added 2 or 3 years to their working life. Working that much longer may be worth it to some to have a car for the remainder of their life during FI.

    Still makes you really ponder the need though when you see it in terms of years of your life you have to give up for it!

  5. says

    BTW, the new scooter looks sharp. 100mpg blows my mind!

    Just imagine how much better shape the country would be in (financially, logistically, ecologically) if everybody who didn’t REALLY need a car got one of these instead? or even got it instead of a SECOND CAR!

    • says

      The Money Monk,

      Hey, long time no see. Glad to see you still around and everything is alright! I believe you started your own business a while back, right? I hope that’s going well!

      Yeah, going car-lite instead carfree is possible, and only working for 3 years would probably get you in a spot where that might be possible. But 3 years is 3 years. That’s a long time when you really sit down and think about it. For me, the value really isn’t there. I’ve been mostly carfree for 2 years now and don’t miss it. I’d rather have the 3 years of freedom. For others, the 3 years doesn’t bother them and they’d rather have the car. Different strokes for different folks.

      Glad you like the scooter. Yeah, 100 mpg. Actually I think it gets over 100 mpg. I’ll know for sure on my next fillup. I put almost exactly a gallon in it at exactly 2500 miles. I now have 2540 and it has over 3/4 of a tank. Awesome!

      Take care.

  6. says

    Sweet Scooter, DM!
    Pretty amazing that eliminating or managing transportation expenses alone can be the ticket to FI as your stats show.
    Keep fighting the good fight and in the meantime I will be envious of the 100 mpg you get on that hog. Puts my 40+ mpg to shame, not to mention all the other maintenance and operating costs with my standard commuter.

    • says

      Snowball,

      Thanks for stopping by.

      I’m definitely going to keep fighting the good fight. We’ll see how my vow to never own a car again goes. I’m putting it out there.

      40+ mpg is nothing to be ashamed of. That’s pretty awesome. That’s light on your wallet and the environment!

      Best wishes.

  7. Onassis says

    Good morning :-)

    A pretty cool calculation, Jason! What’s for incredible amounts come out!
    I have checked how can I save more money, but I have only a few costs which I can adjust.

    How ever – today I quit our daily newspaper.
    25 EUR/month = 300 EUR/year / 0,035 = !! 8.570 EUR !!

    My wife is not very amused! :-))))
    Haha – that is so funny!

    But news are everywhere. On the mobilphones, tablets, Notebooks – you can read everywhere – for free!

    It´s hard for my wife – bur you have only two options: Make more money or save more money!

    Best regards!

    Onassis

    • says

      Onassis,

      Make more money or save more money is definitely right.

      A newspaper subscription is one of the first things that would be cut from my budget if I had such an expense. The media is different than it used to be, and the delivery of it is wonderful via the internet. Hell, we’re all the media now. This blog is the media.

      Best of luck with the new savings!

      Take care.

  8. says

    Congrats on the new ride! I can totally see how $9k is average for a car owner. Saving that amount would be great, but my dream is to live in the country somewhere so I don’t think a scooter would be able to be my only form of transportation. I love the idea though!

    • says

      Jake Erickson,

      Hey, we all have different priorities. If your priorities require a car, then so be it. Just be sure to calculate out what the car is costing you and once you’re aware of it make sure you’re comfortable with that figure. If a car ends up requiring you to work for 5 years, then as long as you’re at peace with that then that’s all that matters.

      Best wishes!

  9. Larry says

    100mpg is a lot better than i get in my 2002 ford focus (about 28mpg)! I live pretty close to work , about 16miles round trip each day so I figure I use about $800 in gas per year. Not too shabby but it can’t be anywhere as low as what I imagine you pay. How often do you have to put gas in that scooter ?

    Cheers,
    Larry

    • says

      Larry,

      I only have to fill it up about once every couple weeks by the way it looks so far. A fill-up is about 1 gallon, or about $3.50. I figure it’ll cost me less than $10/mo in gas if I ride it everyday. But I’ll likely still ride the bus here and there, especially in the winter when it cools down again.

      Best regards!

  10. Spoonman says

    That’s sweet new scooter! It’s got an awesome vintage look. I’m amazed that you were able to get it for just 1300.

    I totally feel you about never getting a car. Today I had to drive to work (I’ve been riding the metro for over a year now, so I hardly ever drive) and I just can’t believe how I was able to put up with the unholy mess that is LA traffic on a daily basis. When I ride the bus/train to work sometimes I have to put up with smelly and insane people, but that is much better than dealing with traffic.

    • says

      Spoonman,

      Thanks for stopping by!

      Yeah I love that vintage look. It’s got kind of a Vespa flair for a lot less money. I’m really digging this thing. They don’t come up for sale often, and when they do they’re usually way too much money.

      I’m with you. I don’t miss driving at all. I’ll have to drive a car about 90 minutes to and from a training class next week for work and I’m not looking forward to it at all. The bus has drawbacks, but I enjoy getting a quick nap in during the morning trip to work. I really actually look forward to closing my eyes and drifting away a little on the way into work.

      Oh and traffic sucks!

      Best wishes.

  11. says

    I like this article a lot! Cars are such a sensitive subject as can be seen by some of the comments. I think it is funny when people say “I can’t give up my car for x, y, and z.” And x, y, and z are not a handicap or some outlier (I drive a car for Googlemap or something). It’s not that you can’t it’s that you won’t. Many people even scoff at the suggestion of owning a car but just driving it less like you mentioned. I should know, my parents are huge car drivers. I live in Japan and have no need for a car. I know many people in their 40’s who have never had a drivers licence and probably won’t ever need one. Great life decision to avoid owning a car DM. You will thank yourself when you are sitting on the sunny beach of FI very soon.

    • Anonymous says

      To each there own I guess. You can stop driving if you are single, have no kids and have no interest in going somewhere that is not on a bus route. You can eat sandwiches but I enjoy a steak. I’m not saying anyone’s lifestyle, living habits or extreme frugality is wrong but life is for living every day to the max. Not waiting until sometime ten or twenty years out & hoping your health is good and the stars align to start living. I have been reasonably frugal my whole life but still enjoy trips to Puerto Vallarta every year, summers at my cottage & a car to drive in the country or to see a baseball game with my kids. There should be a balance in life. Too much emphasis is put on what will I do when I retire & not enough on enjoying the journey to get there. Best of luck & enjoy the ride.

    • says

      Though with the USD weaker now compared to the Yen, traveling from Fussa to Akihabara was $25 one way for me while on vacation, plus 1.5 hours of subway travel not during rush-hour. Though the 26.9 Mi would be free on bike, plus a LOT MORE scenic then the Subway trains which are not made for 6’2″ Americans.

      Keep up the great work The Kechi One! I really enjoyed Tokyo only because i had no need to be anywhere while on Vacation! Thus pursuing FI for that obvious reason to enjoy life.

    • says

      The Kechi One,

      Great comment there. Thanks for adding that.

      I agree with you on the subject of cars. It is a sensitive area. Not quite sure why. I’m glad to not own one anymore.

      I hope you’re right on that last part! I’d love to have days to myself to zip up to the beach on my scooter and watch the waves come in while the rest of the world is working away. :)

      Best regards.

    • says

      Anonymous,

      I’m living every single day. I go to work like everyone else. I work for 9-10 hours and then I come home and eat dinner. I check my blog, manage my investments and hit the gym a few times a week. That’s Mon-Fri.

      On the weekends I have my fill of time getting sun by the pool, visiting the beach, going downtown to the farmer’s market, chatting with family and friends, watching movies, reading, grocery shopping, errands and the like. There’s nothing abnormal about my life.

      Rather, I do feel sorry for people stuck on the hedonic treadmill where they believe that the more money they spend the happier they’ll be. I’m happier now than I ever was when I was “living every day to the max”. I have an inner peace now as I’ve learned to be me, not what others want me to be. Having six-figures in the bank doesn’t hurt either. I have a plan for freedom. You obviously are choosing summer cottages and vacations over freedom. That’s cool. What I’m doing isn’t for everyone. But don’t think that I’m not living. I’m happier than most could ever hope to be.

      Best regards.

    • Anonymous says

      As I said everyone chooses there own lifestyle. You suggest I am choosing cottage life & holidays over freedom, but my friend, that is part of my freedom. I have well over your six figure account, ( however I am twenty years your senior)and all I am suggesting is you can invest in real estate income properties, dividend stocks & still enjoy life without living beyond normal frugality. I can see how you think people are living on a hedonic treadmill ( I am a product of the hippie generation after all) but we are all to some degree, whether we are laying on a beach after retirement, or enjoying that beach throughout their life. Its all good either way, there is no right or wrong way to live life.

    • says

      Anonymous,

      Definitely. There are many ways to live life, and none are right or wrong. It’s all about what fits you. I say live and let live. If you’re happy and not hurting anyone then more power to you. I only get a bit defensive when people develop a live and let die attitude and attack my way of living for being something it’s really not. My way of living isn’t for everyone to be sure, but it has made me profoundly happy and I’m only doing what I can to spread that joy and hopefully inspire others who want what I want.

      Take care!

  12. Onassis says

    I have a question. They do not fit to the theme, but it is just me on the tongue:

    I have heard, that in the USA the “Old Age Insurance” does exist.
    How big is the amount of subtraction from the gross salary for the legal Old Age Insurance?

    Thanks a lot!

    Onassis

  13. says

    LOL, that EXACTLY how I look at things, too. Well played, sir! Now if I could just get a real time machine to go back in time and slap myself silly for my stupid earlier mistakes, I’d be all set.

    • says

      Pretired Nick,

      I’d love to get my hands on a Delorean with a flux capacitor and travel back to my senior year of high school and lay the smack down. I guess we are who we are because of the mistakes we’ve made, right? Hmm, I’d still take my chances at a do-over!! :)

      Take care.

  14. says

    Wonderful time machine ! Personally I still need a cheap, very cheap car, but someday I’ll probably get rid of it. As you, I used to work in car business, and had always the oldest or smallest beasts. Sincerely I do not pay attention at all to cars as a social proof. Nor for clothes or any other decorative oobjects. It is all a question of your state of mind after all. Always appreciate your posts. My gratitude.

    • says

      Aspenhawk,

      Nice job owning a small and cheap car. That’s not all that bad. Being well under the average is okay as long as you’re okay with the expense and you’re not driving it much. I plan on never owning a car again, but if circumstances deem it necessary for me to have one I’ll choose to have a cheap, older car that I’ll try to drive as little as possible. I hope to never be in that situation as from here on out I’ll be designing my life around being car-free.

      Best wishes!

  15. says

    My time machine are my… feet since 2011.

    $80 shoes, my public transportation pass and I can give you the world!

    Haha j/k but for now I don’t regret it, and if I REALLY need a vehicle, I short-rent one.

    Like said the guy in the first comment, here too there are too many people that blow $ (and debt) into big and/or modern cars. I know even one that using a revolving credit since many years. Full time slavery for a bunch of steel and plastic…

    Great upgrade DM! Keep it on!

    • says

      JF Baconnet,

      I’m with you! For quite a while there it was only my feet and the bus. I still ride the bus often. I quite like getting on and not worrying about traffic or stop lights or the weather or anything else. I just get on and get off. Very nice.

      Glad you like the upgrade! At first the scooter idea was just for back-up to allow me to get to work on time when the bus was running late or didn’t show. However, I do quite enjoy riding this particular scooter. It’s such a dream to operate and it’s so quiet. The gas mileage (over 100 mpg) is also fantastic and it’s actually cheaper to ride than the bus on a daily basis (factoring out the purchase price obviously).

      Keep up the great work! Cars suck. :)

      Best wishes.

  16. Anonymous says

    i bet you the person you live with has a car or let others give you rides when you need one i dont think you take a taxi is that true dont use other peoples resourses

    • says

      Anonymous,

      I’m not sure what your comment is referring to.

      My girlfriend doesn’t own a car either. I have very occasionally used taxis, mostly when flying home from Michigan late on a Sunday night when I have no other choice. Getting home from the airport is difficult on a Sunday night.

      Best regards.

  17. Anonymous says

    i did what you did what you doing years ago it works i tried retirement didnt like it im 60 years old in a few months im been working since i was 12 years old ill go nuts not working i went back to school and got a thrid degree im not complaning this is a great place and time to be alive but not alot of places want old duffs like me im working now so no problems you seem well balanced you will do just fine

  18. Anonymous says

    that above remark was a mess i got stung by a wasp in my right eye i have a patch over it makes one eyed typing hard you can see what i was trying to say

    • says

      Anonymous,

      No problem.

      Early retirement, or retirement in general, isn’t for some people.

      Even one of my personal idols and heroes, Warren Buffett, continues to go to work every day when he could have obviously retired a long time ago. He has found tremendous value and personal growth in what he does. He genuinely enjoys his job running Berkshire and that’s great.

      I don’t know if I’ll ever find something that I find so gratifying that I could do it for the rest of my life. I tend to get bored of things after a few years. But, I do quite enjoy investing and all that comes with being an investor, so maybe (hopefully?) something in the finance world is in my future. We’ll see.

      Take care!

  19. Anonymous says

    Here is also another idea. I bought an electric bike with a helper motor. I picked a motor size that allows it to be called an electric bike by Arizona law. It looks like a small scooter but by doing my commute of 6 miles each way at 20 MPH. I do not have to pay License, registration or insurance on it as well.It also allows me to ride in the Bike lane for a safer commute. I recharge at home and work so my cost per day to commute is 1.25 cents ($3.25 total for the year for 3,120 miles). I bought it brand new for $850. I also live in the southwest so with the limited amount of rain and higher temps I have used it every day since Jan 10th. My only upkeep so far has been a blown tire which cost me $7.50 to repair. The battery is supposed to last about a year with the cost of a new one being $200.

    A new follower to your Blog but strong believer in what you are doing. I got killed during the “Great Recession” a complete wipe out of my finances. I was unemployed for 3 years. I have just started working again right before Thanksgiving. I only make about 36k a year but with learning on how to live a good life while still spending less. I have gotten out of debt and saved $4300 to this point. My goal is to save $5,000 for an emergency fund and then start to look at investing the rest. I can then either use that to either retire earlier or help put me in a place where I may be able to buy the company I work for.

    I just wanted to say thank you for being so willing to put your ideas and approaches out their for others to learn from.

    • says

      Anonymous,

      Great idea there with the electric bike! I like it. I eventually plan on bicycling a lot more once I no longer have a full-time job. Right now, bicycling is just not realistic for me. The scooter fills in nicely, however.

      Best of luck to you as you improve your financial situation and put yourself on the path to a wonderful future. Great job getting out of debt and saving some capital. I was making right about $36k just a few years ago. Stay hungry, stay humble and keep your eye on the long-term. You’ll get there.

      Thanks for stopping by and I’m glad you enjoy the blog. I don’t mind making my information personal if it means that I’m inspiring like-minded people. That’s what it’s all about.

      Best wishes!

  20. Anonymous says

    The OPTION of not having to work is awesome! If you are financially independent you can quit your job anytime. If you are not financially independent you are a slave to your job.

    • says

      Anonymous,

      I couldn’t agree more. Options are wonderful and should be sought by everyone. The people who don’t agree with seeking early retirement for whatever reason(s) should still want to have options. I can’t understand how anyone could not want to have flexibility in their life. I personally can’t wait for the day when my alarm clock is fully optional for the rest of my life. :)

      Take care!

  21. Anonymous says

    DM,
    When you owned this scooter, did you ever wish you had 150cc or 250cc scooter? I’d like to get one of these, but if it was a bigger scooter, I can coast along with the normal flow of the traffic whereas 50cc needs to let traffic pass by you? I am buying a scooter in addition to my economobile so it’s not something I ride all the time. My work is 22 miles away and if I had my car in the shop and must ride 50cc, it might be too long of a distance. Any thoughts?

    • says

      Anonymous,

      I had a much shorter commute than you do. Mine was more like 7 miles or so. If it would have been a 22 mile trek like you have I would have definitely thought about getting something bigger.

      What I really liked about the small scooters is that they don’t require insurance or an endorsement. So the barrier to entry is quite low. And the gas mileage is phenomenal.

      But I do think 22 miles is stretching it for one of these unless the journey is mostly on roads where the speed limit is 40-45 mph.

      Maybe you could rent one and try it out? I know around me there are plenty of places that rent them, but then again I live in a fairly touristy area.

      Good luck! :)

      Cheers.

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