I was unhappily scrolling through Facebook the other day and saw that one of my smart friends had posted a dumb article about the excellent Toronto Raptors basketball player who, despite making nearly a hundred million dollars, still drives a 20-year-old beater SUV.
He said of the car: “It runs … and it’s paid off.”
The second part of that statement is crucial. There is nothing better than a paid-off car. There is no monthly payment, and most of the depreciation has already occurred. You are driving for free.
I have to say that even I am not as disciplined as Kawhi Leonard. I had my last car for seven years and about 135,000 miles when I started getting a hankering for new-car smell.
Anyway, Leonard’s level of frugality is seldom seen in the NBA — or anywhere in professional sports, for that matter.
I had a friend of a friend who played college hoops and made it to the NBA. He said that the players would buy a new suit for every day they were on the road. Forty-one road games, 41 suits.
They would wear them once, and never wear them again. Given the size of the basketball players, these were bespoke suits and not off the rack. Conservatively, that’s about $100,000 worth of suits. A year. And so it goes.
In my personal-finance stories, I’m trying to give people a pretty big dose of perspective. Three dollars on coffee every day is a luxury you can afford, and people seem to have an easier time giving up large luxuries than small luxuries.
Most people would rather drive a piece-of-crap car than give up the morning coffee. Tell people to give up coffee (as Suze Orman does) and you will alienate the people you are trying to help.
So for starters, don’t buy 41 suits a year. But don’t buy a $10 juice every day, either. And don’t go out to eat three times a week. And don’t stay in $300-$400 hotels when you travel.
All basic stuff. But the easiest way to save money, hands down, is to drive a piece-of-crap car.