Ride the Bus to Financial Security

To put it simply wealth is the money you don’t spend. If you bring home $275 a week and spend $273; Congratulations! You’re $2.00 Wealthy! If I would have followed my own advice starting back in 1974 I’d be writing this article from the patio of my double-wide in New Port Richey, Florida instead of this dreary suburb of Detroit on a snowy afternoon.

The way to wealth has nothing to do with how much money you make but on how much you spend. In other words the sooner you get your spending under control the wealthier you’ll be. The lifestyle we choose will determine how long, if ever, we reach our goal of financial independence at retirement. There are so many investment vehicles out there that are relatively safe and if you put the thousands of dollars into them, will return many hundreds of thousands (possibly millions) of dollars back. But where do you get those hundreds of dollars each month? You determine that by the lifestyle you choose.

Housing costs are difficult to minimize because of mortgage, utilities, repairs and taxes. Try to find a reasonably sized house with decent schools and you’ll be paying out some big bucks. Food and clothing are also hard to control for. Keep trying to chip away at these costs and find some savings. But take a look at your cars (who has one car anymore?). Over a five year period it costs over $41,000 to buy and own an even run-of-the-mill Camry. But what is more surprising is in households that own cars, nearly 60{1cc8e45cbcdeae64cb989adba369b6a3f691ff03978596e6760cecf20fed8ab4} have two or more automobiles! Now here is an area we can make some serious changes for big savings if we’re willing to live in a little different way.

The average cost of a monthly bus pass that gives you unlimited rides is about $64 or $768 per year. Subtract $64 from $684 monthly cost of a car and you get $620 to fund your investments!

If you’re just out of school or have been laid-off looking for work and have to make decision to relocate, consider the cities’ transit system. Travel there and ride the bus and train for a couple of days including the weekend. Bring your bike and try to ride around the areas you’d like to live in. Business and industrial areas may or may not be well served.

Next look for walkable, bike friendly neighborhoods with school, grocery, and such things as a dentist and restaurants within walking distance. Then get the bus and transit map and see how the area is served. The main lines will have 24 hour, seven day service. The smaller feeder lines may have limited night and weekend hours but peak hour service may fit into your work schedule. Look for lines that have “express or limited” services at peak rush hours. Most bus companies have on-line schedules and origin/destination help on their websites. Making more than one connection can be time consuming so analyze the transit system carefully.

For cities like the Detroit metro area the transit system is poor at best and owning a car is a must. Maybe a job that pays a few thousand less a year may be a better choice in the long run if you can do with out paying $620 a month (yes $37,200 divided by 60 months!) to own a car. Assuming that you can save that $7,440 per year at 6{1cc8e45cbcdeae64cb989adba369b6a3f691ff03978596e6760cecf20fed8ab4} interest compounded daily, at the end of five years you’d have almost $43,385 in the bank!

Car cost calculator: http://www.edmunds.com/apps/cto/intro.do

Just maintaining saving $7,400 annually for 25 years instead of spending it on a car will bring $431,731.90 (nearly 1/2 a million dollars!). Imagine if you could go car-less! It is possible, many people that live in New York City, Chicago and even Ann Arbor, Michigan do not own even one car. Renting a car for a weekend trip or vacation is much more cost effective.

Wealth has nothing to do with how much you make (you can always spend more) but on how much you spend; what you don’t spend is your family’s wealth.