[0:00] If you don't want to
be like everyone else,
[0:02] then you have to avoid the
number one wealth killer
[0:04] that nobody talks about.
[0:06] Take a look at this chart,
[0:07] it shows how the average person
[0:09] spends their money each month,
[0:11] and believe it or not,
[0:12] one of these categories is
quietly killing your chances
[0:15] of building wealth.
[0:15] So let's uncover it together.
[0:17] First up, housing.
[0:19] This is the biggest slice of the pie,
[0:21] so it's definitely the
wealth killer, right?
[0:23] Well, although paying rent
or a mortgage is expensive,
[0:27] at least it provides you
[0:28] with a place to live.
[0:29] Next, taxes, nobody likes these.
[0:32] Well, unless your name
happens to be Gary Stevenson,
[0:35] but let's not get into that.
[0:36] Next, utilities and household expenses,
[0:40] they're not fun to pay,
[0:42] but you can easily get
them down by calling around
[0:44] for the best deals.
[0:45] How about all of these?
[0:47] There are so many of
these little expenses,
[0:49] but most of them are flexible,
[0:51] so that leaves us with one section left.
[0:53] Can you guess what it is?
[0:55] Transportation; car payments,
[0:58] insurance fuel repairs parking
[1:01] all for something that goes
down in value every single day.
[1:05] The average new car costs nearly $48,000.
[1:09] It's not an investment, it's
not building your wealth,
[1:12] and in most cases
[1:13] it's just a financial
black hole on wheels.
[1:15] That's why out of all of these expenses,
[1:18] transportation, specifically your car,
[1:21] is the number one wealth killer
[1:23] and it's only getting worse.
[1:24] (eerie music)
[1:27] There's been an absolute explosion
[1:29] in the amount of money
people are on their cars.
[1:31] It's honestly getting outta control.
[1:34] Let me show you what I mean.
[1:35] In 2005, total auto loan debt
was sitting at $720 billion.
[1:41] Five years later it reached $850 billion.
[1:45] Fast forward to 2020,
[1:47] it's rocketed all the
way up to 1.38 trillion,
[1:51] and in 2025 we're sat at an all time high
[1:54] of $1.62 trillion.
[1:57] This has led to more people than ever
[1:59] being what I like to call car poor.
[2:02] This is when you're making just enough
[2:04] to cover your car payments,
[2:05] but not enough to build
wealth at the same time.
[2:08] It's like you're trapped on a treadmill
[2:10] that never slows down,
[2:11] but why get on this
treadmill in the first place?
[2:14] Well, more people than
ever care about their image
[2:17] and driving a nice car
[2:18] is one of the quickest ways
to impress other people.
[2:21] The car industry spends billions
of dollars convincing you
[2:24] that a new car is gonna
transform your image,
[2:27] confidence and maybe even your love life.
[2:29] They don't show you
sitting in a traffic jam
[2:31] on a rainy Tuesday after getting slapped
[2:33] with a $600 repair bill.
[2:35] Clever marketing makes you
feel like success is finance,
[2:38] but really it's a liar being
fed to keep you trapped.
[2:41] Look at the cyber truck
[2:43] that wasn't sold on
practicality or daily use.
[2:46] It was sold on the image of power
[2:48] and looking like you're
straight out of a sci-fi film.
[2:50] Social pressure fuels this too.
[2:52] Nobody claps when you drive
an old Honda that's paid off
[2:55] and running smoothly,
[2:56] but if you roll up in a
brand new BMW on finance,
[2:59] people tend to give you approval
[3:01] and assume you're doing
really well for yourself.
[3:03] I see so many young lads these days trying
[3:05] to look successful rather
than actually trying
[3:08] to be successful, especially in cultures
[3:10] where car ownership gives you credibility.
[3:13] This need to look rich, it's
what's causing this to happen.
[3:16] It makes people stretch
their money so thin
[3:19] that the car actually ends up owning them.
[3:21] This car poor trap gets
even worse for some people
[3:24] as they borrow more than
the car is actually worth.
[3:27] It sounds silly and you might be thinking,
[3:29] why would anyone do that?
[3:31] But it's actually very common
[3:33] and it's called being in negative equity
[3:35] or upside down on the loan.
[3:37] In Q4 of 2023,
[3:39] nearly one in four people
were in this exact position,
[3:42] so this could result in
you owing $40,000 on a car
[3:45] that's only worth $30,000.
[3:48] This means your $10,000
in negative equity.
[3:51] I've actually had a lot of people email me
[3:53] after reading my free weekly newsletter
[3:55] saying it helped them
avoid traps like this
[3:58] and even make a bit of extra money
[3:59] with some of the strategies I share.
[4:01] Is something I just do for fun
[4:03] and I really enjoy reading the replies,
[4:05] so if you want me to send
you those emails too,
[4:07] I'll drop a link in the description.
[4:09] Anyway, if you want to
avoid being car poor
[4:11] like most people,
[4:12] then you need to
understand the true cost of
[4:14] that so-called affordable
car sitting in the showroom.
[4:17] (eerie music)
[4:20] I feel like a lot of
people don't understand
[4:22] that the sticker price of a
car is far from the true cost
[4:26] of owning that car.
[4:27] Let me explain.
[4:28] Take a look at this Honda Civic.
[4:30] It's the most commonly purchased car
[4:32] by people aged between
18 and 24 in America,
[4:35] and on the surface it looks
like a sensible choice.
[4:38] The sticker price is $27,867,
[4:44] which seems reasonable.
[4:45] However, let's dig into the true cost
[4:48] to own this car over five years.
[4:50] First up is depreciation,
[4:52] and on this car that's $10,999.
[4:56] This cost starts the second
you drive your new car
[4:59] off the lot as it drops 10 to 15% in value
[5:02] before you even make it home.
[5:03] Over five years,
[5:05] you'll lose nearly $11,000
to depreciation alone.
[5:08] Think about that.
[5:09] $11,000 just gone
[5:12] all because time passed
and your car got older.
[5:15] It's like paying $2,200
every year for the privilege
[5:20] of watching your money evaporate.
[5:21] Next is insurance.
[5:24] This is nearly $12,000 over five years,
[5:27] and that's a conservative estimate.
[5:29] This figure is based on a 40-year-old
[5:31] with a perfect credit
score and a clean record.
[5:34] If you are a young guy,
[5:35] then this number is actually much worse.
[5:38] You are probably looking at double that.
[5:39] Sure, you can get this down a bit
[5:41] by calling them every
single year, negotiating,
[5:44] and never staying loyal to one company,
[5:46] but it's still gonna be a high cost
[5:48] even if you do manage to get
a bit of a discount each year.
[5:51] Then there's fuel.
[5:53] $6,415, just to keep the thing moving.
[5:57] This is actually getting so expensive.
[5:59] Now for financing.
[6:02] This is the cost of not
having cash upfront.
[6:04] $4,719 over five years
[6:08] assumes you've got a decent
credit score and put down 10%,
[6:12] but if your credit score is bad,
[6:14] then you could be looking
at 15 to 20% interest rates
[6:18] instead of the six to
6.5% I'm showing here.
[6:21] That's why I always
drill home the importance
[6:23] of building up a good credit
score by having a credit card
[6:26] and putting small monthly expenses on it
[6:28] that you pay back in full
at the end of each month.
[6:31] This means you avoid paying any interest
[6:33] and prove that you're
a responsible borrower.
[6:35] Next up is maintenance.
[6:38] $3,224 over five years
[6:42] for oil changes, brake pads,
tires, the list goes on.
[6:46] However, you can do this a lot cheaper
[6:48] if you learn a little bit about cars.
[6:51] I used to race in car championships
[6:52] so I know the ins and outs of
how to fix stuff on my car.
[6:56] This has saved me
thousands over the years.
[6:58] I mean, if you learn
to change your own oil,
[7:00] you'll save 30 to $50 every single time,
[7:04] and if you buy a basic OBD
scanner for 20 to 30 bucks,
[7:07] you can diagnose most problems yourself
[7:10] instead of paying the
garage $100 just for them
[7:12] to plug it in and tell you what's wrong.
[7:14] Then taxes and fees.
[7:17] This is just the
government's cut, road tax,
[7:19] registration and inspection fees
[7:21] will come to around
$2,800 over five years.
[7:24] Finally, we've got repairs.
[7:27] We'll budget $1,790 for
this over five years.
[7:31] These surprise expenses are killers
[7:33] if you're not prepared for them.
[7:35] Even reliable vehicles
like the Honda Civic
[7:37] will eventually need repairs
beyond normal maintenance.
[7:40] This is exactly why you
need an emergency fund
[7:43] of three to five months
of your living expenses.
[7:45] Without it, a single
major repair can derail
[7:48] your entire financial plan.
[7:50] With cars, it's not a matter
of if something will break,
[7:53] it's when.
[7:54] So let's add all this up.
[7:57] Drum roll please.
(drums beating)
[7:58] Your affordable $27,867 Honda Civic
[8:04] actually costs you $46,821
[8:09] over five years,
[8:10] but it gets even worse than this
[8:12] as this doesn't even
consider opportunity cost.
[8:15] (eerie music)
[8:17] This is where it gets really painful.
[8:19] Let's look at a five year comparison
[8:21] between someone that chooses the car
[8:23] and someone that chooses to invest.
[8:25] If you decide to choose the
new Honda Civic in our example,
[8:28] then after five years,
[8:29] you'll only be left with $19,295.
[8:35] This is, of course,
after reselling the car
[8:37] at its current market value.
[8:39] That's assuming it's been well maintained
[8:41] with minimal damage.
[8:42] That's a loss of over
$27,000 in net worth.
[8:45] No wonder it's such a wealth killer.
[8:47] However, if you choose to take
[8:49] that same $780 monthly payment
[8:52] and stick it into an S&P 500 index fund
[8:55] based on the historical average return
[8:57] of around 10% per year,
[8:59] after five years, you'd
have approximately $60,016.
[9:05] Of course, past results can't
guarantee future returns.
[9:08] However, if it followed the
same historical pattern,
[9:11] then that would be gain of
over $13,000 in net worth.
[9:15] That's a price difference of $40,721.
[9:21] That means by choosing
the car over investing,
[9:23] you could be giving up $40,000 of wealth.
[9:26] Most people repeat this
cycle every few years
[9:29] for their entire work in lives.
[9:31] This is just one example of
putting your money to work.
[9:33] You could choose to invest
in starting a side hustle,
[9:36] buying a rental property,
[9:38] or even launching your
own full blown business.
[9:40] The key is getting your
money working for you
[9:42] instead of against you.
[9:43] That's not even mentioning
individual stocks and crypto,
[9:47] although they are riskier investments.
[9:49] But to put it into perspective,
[9:50] if you'd invested that same $46,821
[9:54] in Microsoft stock five years ago
[9:57] instead of the Honda Civic,
[9:58] you'd have seen a 224% total return.
[10:02] Turning your money into
over $150,000 today.
[10:06] Think about that for a second.
[10:07] The same money that bought
you a depreciating car
[10:11] could have bought you a small fortune
[10:13] in one of the world's
most successful companies.
[10:15] The point isn't that you
should never own a car.
[10:18] It's that every financial
decision has an opportunity cost.
[10:21] Every dollar tied up in something
[10:23] that loses value is a dollar
[10:25] that's not compounding in your favor.
[10:27] You might be thinking, "If this is true,
[10:29] then why aren't more people investing?"
[10:31] And to be honest, I think it's
[10:33] because they don't understand
how to actually do it.
[10:35] Back in my day, it used
to be very difficult
[10:37] as you had to phone up a stockbroker.
[10:39] However, now you can use
platforms like Trading 212
[10:43] right from your phone.
[10:44] You can set up an account,
deposit some money,
[10:47] and then search for S&P 500
[10:51] if you want to keep it
simple and away you go.
[10:53] As I was planning on talking
about Trading 212 anyway,
[10:57] I reached out to see
if they'd be interested
[10:59] in sponsoring this portion of the video.
[11:01] They agreed and are also
offering a free fractional share
[11:04] worth up to 100 pound to
anyone using the code Tilbury
[11:12] in the promo code section of the app.
[11:14] (eerie music)
[11:16] Now, look, I get it, in many places
[11:19] not having a car means
losing opportunities.
[11:22] A study by Capital One actually
found that 67% of people
[11:26] said owning a car opened
up income opportunities
[11:29] they wouldn't have had without a car.
[11:31] So that shows that sometimes
[11:32] there is a clear opportunity
cost of not having a car.
[11:36] So I'm not against getting one,
[11:38] but if you're smart about it,
[11:40] you can still free up
hundreds per month to invest.
[11:43] So if you want to buy a car and invest,
[11:45] then here are the three steps
I would recommend following.
[11:48] Step one, buy in the sweet spot.
[11:51] This is when you buy a car
three to four years old
[11:54] with 30 to 40,000 miles on the clock.
[11:57] This is great because you dodge
[11:59] the brutal first year depreciation hit,
[12:01] but still get modern safety
features, reliability,
[12:05] and often remaining warranty coverage.
[12:07] A car that costs $35,000 new
might be $24,000 at this age,
[12:12] so that's $11,000 in instant
savings you can invest instead.
[12:17] Step two, follow the 15% rule.
[12:21] Your total transport costs,
including monthly payments,
[12:24] insurance, fuel, and repairs,
[12:27] should never exceed 15%
of your monthly income.
[12:30] If you earn $3,000 per month,
[12:32] that's a maximum of $450
for all car expenses.
[12:37] Push past this
[12:38] and you're getting dangerously
close to becoming car poor.
[12:41] Step three, keep it
for more than 10 years.
[12:45] This is where you actually build wealth.
[12:47] Most people trade in their
cars every three to five years,
[12:50] which is financial madness.
[12:52] Instead, buy once and maintain it
[12:54] like your financial future
depends on it because it does.
[12:58] If following these steps
saves you $300 per month
[13:01] compared to buying new,
[13:02] that's $3,600 every year.
[13:05] Invested at 10% annual returns,
[13:08] that becomes more than
$118,000 over 15 years.
[13:12] That could be the down payment on a house,
[13:14] all funded by making smarter car choices.
[13:17] If you want me to walk you through
[13:18] how to set up an invest in
an account step-by-step,
[13:21] then I'm gonna leave that
video right up there,
[13:23] but don't click on it just yet.
[13:25] Make sure to subscribe if
you want to grow your wealth.
[13:27] Okay, I'll see you over there.