---
title: 'How to be poor for the rest of your life'
source: 'https://youtube.com/watch?v=sYAOIKAdUZg'
video_id: 'sYAOIKAdUZg'
date: 2026-06-29
duration_sec: 809
---

# How to be poor for the rest of your life

> Source: [How to be poor for the rest of your life](https://youtube.com/watch?v=sYAOIKAdUZg)

## Summary

The video argues that the biggest wealth killer isn't housing or taxes, but transportation—specifically, the hidden costs of car ownership. It breaks down how the true cost of a seemingly affordable car can be nearly double the sticker price, and how that money could instead be invested to build significant wealth. The presenter offers practical rules to avoid the 'car poor' trap.

### Key Points

- **Identifying the Wealth Killer** [00:17] — Housing, taxes, utilities, and transportation are examined. Transportation is identified as the biggest wealth killer because cars depreciate and have many hidden costs.
- **Rising Car Debt** [01:35] — Total auto loan debt has risen from $720 billion in 2005 to $1.62 trillion in 2025, indicating a growing problem.
- **The Car Poor Trap** [02:02] — Many people stretch their budgets so thin on car payments that they cannot build wealth—a state called 'car poor'.
- **Negative Equity Statistics** [03:37] — In Q4 2023, nearly one in four car owners were in negative equity (owing more than the car is worth).
- **True Cost of a Honda Civic** [07:57] — A $27,867 Honda Civic actually costs $46,821 over five years when including depreciation, insurance, fuel, financing, maintenance, taxes, and repairs.
- **Opportunity Cost Comparison** [08:19] — Investing $780/month in an S&P 500 index fund yields $60,016 after five years (10% return), while the car owner is left with only $19,295 after selling—a difference of $40,721.
- **Three Steps to Avoid Being Car Poor** [11:48] — 1) Buy a car 3-4 years old with 30-40k miles. 2) Keep total transport costs under 15% of income. 3) Keep the car for more than 10 years.

## Transcript

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