Looking for a way to save money, maybe even a million?
Dream of retiring early? Here is a strategy that can provide a million dollars to a person with an average income, and it is enjoyable, healthy and ethical. Simply minimize your driving expenses and invest the savings. After a few decades you could be rich.
Most households can reduce their vehicle expenditures. For example, owning and operating a typical new luxury car, SUV or van costs about $8,000 a year, and most households own multiple vehicles. If you buy a reliable used car, share it with other family members, and minimize your driving by using transit, cycling or ridesharing, you can reasonably cut your vehicle expenses in half.
What happens if you invest the $4,000 annual savings at 7% annual return? In ten years you have $55,266, in twenty years you have $163,982, and in less than forty-four years you have a million dollars. You can also use the savings to buy a nicer home, put children through college, travel or work fewer hours.
Source: Todd Litman, “Evaluating Public Transit Benefits and Costs,” Victoria Transport Policy Institute (www.vtpi.org), 2004, page 54.