06 January 2009


The recent "100" meme had me thinking how I'd answer. I didn't bother because half a dozen or so of those to me are things that I hope to leave unmarked when I take my last breath.

But a couple questions caught my eye. For instance #82 "Bought a new car". Nope, never done it, never expect to do it.

Another of the best pieces of advice came at the end of a financial radio show on a dull Sunday morning circa 1980 San Francisco Bay Area. I was filling in for my brother in a tennis pro shop. The job really boiled down to answering the phone and taking tennis court reservations for the Tuesday ladies league. I was bored out of my mind and the only program on the radio was this finance show. The guest kept extolling the benefits of investing in real estate. In hindsight this was probably sage advice as what $100k would buy then is probably still north of $1M even in today's depressed market. But as a barely legal adult, my finances meant he might as well have been talking about life on Mars. Neither in reach.

They took lightning calls just before wrapping up the program. A 10 year old called in asking "What can I do". "Open a lemonade stand" he snarked. Snark yes, but lets face it. The Ante to the real estate game a fair chunk of change and a 10YO can't buy in. Neither could I but at least I was here making a couple bucks an hour which put me better off than him, so I felt bad for the kid.

It may have been another question in the closing part of the program or a parting shot. The question was "What's you best piece of financial advice". Without hesitation the guest answered "Buy cheap cars and expensive houses" with the explanation that cars lose value while real estate gains.

That made perfectly logical sense to me.

The economics of cars is badly stacked against it. Cars devalue 20% just driving it off the lot and another 20% in the first year. Not only that, new cars means new car taxes and new car insurance. It boggles my mind that people can afford to plunk down 30-60k for a car, another kilobuck or so in annual property taxes and better'n a C-note every month in insurance. In my value system, that's the kind of coin that's spent on house payments not cars!

Interesting fun fact about me: To date this lifetime I have bought 7 cars and spent a total of $22,000.
* 1974 Mercury Capri (in 1976) $2500
* 1973 Datsun 240Z (in 1978) $2400
* 1976 Datsun 280Z (in 1979) $7000
* 1987 Nissan 4x4 truck (in 1990)$5000
* 1981 Honda Accord (in 1995) $ 900
* 1977 Datsun 280Z (in 2002) $2200
* 1991 Miata (In 2008) $2000

One thing most of these cars have in common, particularly the last three, is that they are fully depreciated. That means I can drive them for basic operating costs of gas and oil. Taxes and insurance are cheap and they don't lose any more value. Worst case, I can afford the loss (I'll take "salvage writeoff" for $400, Alex) should something bad happen.

But it also means they occasionally need some work. Most people don't have the inclination or skills to twist a wrench, I benefit from their lack of ability. I've done many jobs up to and including replacing engines and overhauling transmissions.

Which brings me to tonight's want.

The brake light came on in the Miata. Checking the fluid level, it was a little low but above the min line. Added fluid and the light went out. For 3 days.

Close inspection of the engine compartment showed the master cylinder was leaking. Past experience shows it's something to address early before it eats a hole in the power booster diaphram and adds another Benjamin to the bill. 25 years ago the normal plan was to take it apart, hone the cylinder and replace the rubber parts. Total cost was $3 and three hours. Now everyone just wants to sell a new cylinder for $100. Oh, and there's still an hours labor to R&R that.

Three if you're like me working at home with a floor jack. All told, I'll probably spend an hour or so just jacking up the car up and down, pulling the wheels so I can bleed the brakes.

But if I only had one of these, it would be so much easier! (Image lifted from Harbor Freight's website. I will yank it on request but hopefully they will see the advertising benefit here).
A lift would cut a couple hours off this job. I think it will fit in my 3rd garage as it has a higher ceiling than the first two. At under $2k (-15% with a coupon), call it $3k installed since it will take a bit of site prep. It's pretty affordable compared to the money saved driving old cars.


BTW.. of the seven cars previously mentioned, I still own 4 and three are in driveable condition. And the '77 280Z is for sale!

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