An investment vehicle rolling on four wheels - doing the math

An investment vehicle rolling on four wheels - doing the math

An investment vehicle rolling on four wheels
Finance
By SCOTT BURNS
Universal Press Syndicate

Allow me to introduce a new investment vehicle: your car.

No, I'm not talking about investing in cars that rise in value. We all know that virtually never happens. Cars lose value faster than money. Buy one in the morning, and it will lose value before it hits the garage.

So your car isn't a true investment vehicle.

But its fuel efficiency can be. Exchange your inefficient vehicle for one that gets better gas mileage, and you'll consume less gasoline. Every gallon not consumed is money not spent.

As many readers know, the Burns family started driving the Toyota Prius hybrid last year. By my calculations, trading in my 18-mile-per-gallon turbo New Beetle for the 45 mpg Prius saves about 500 gallons a year. At $2 a gallon, that's $1,000 a year.

To have an extra $1,000 a year to spend on gasoline, I would need $1,176 in dividends before the 15 percent tax rate on a stock investment. And to earn $1,176 in dividends from the S&P 500, I'd have to invest $78,431 because the S&P 500 yield is only about 1.5 percent.

That's a lot more than most people have in their 401(k) accounts.....cont'd

http://www.chron.com/cs/CDA/ssistory.mpl/business/2727288

If I decide to buy a car that gets less mileage, there's an opportunity-cost of $1000 per year: I'll be spending $1000/year on gasoline, that I could have spent on something else.

V8 Bronco = 11mpg. TDI Beetle = 45 mpg. I've saved well over $1000 in fuel costs over the last year (can't find spreadsheet right now).

Oh, and because it's a diesel, I can run it on renewable biodiesel. In the last year, about 1/3 of my car's fuel has originated in this country, in my home state even.

And does it work with older diesels too?

Pay yourself $75-100 an hour and DIY your repairs ;-)