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Thursday 22 March 2018

A Reader's Story - 1 Year After A Car Downgrade

It's simple Maths 
Long-time readers of the blog (Stealthites?) may recall this blog post from around a year ago dealing with a Reader’s car dilemma. The long and short of the persons query was whether they should downgrade their expensive car or not?

The answer seemed obvious – ditch the expensive car and get a cheaper one.

But the problem with most South Africans and their car expenses, is that despite knowing the right thing to do, very few actually go through with it. Call it vanity, fantastic new car marketing, or peer pressure, but few South Africans seem willing to do the financially obvious thing and reduce their car expense.

So imagine my delight when the reader who asked the original question sent me an update to say he had actually gone through with the downgrade. And, for bonus marks, have a look at what he has decided to do with the savings!

I have copy pasted his email below (with some minor edits for easier reading)


Hi Stealthy,

A year on (just about)

So it has been about a year since I took the heart wrenching decision to sell my high performance German sports vehicle, wondering how on earth I would live without the keys jingling in my pocket as I spoke to friends and colleagues about mags, intercoolers and turbos. Yet, strangely enough I sit typing this letter to you, with the biggest smile on my face, whilst letting my mind drift, wondering what ETF I should invest in next with the monthly savings since my downgrade.

What’s happened since I got rid of the Hof of German sports cars?

As you know, I decided to buy a cheap yet reliable, budget Japanese car, to serve me on my daily commute to work and back. The downgrade was a cash buy, and it hurt at the time, but now I sit back and reap the proverbial rewards (more about that later.)

I lost quite a bit of money after selling my previous car (always going to happen) but even if I kept the car, that money was lost anyways, and therefore wasn’t a factor in my decision to sell. I took the next 8 months to recover the money I lost and to recover the money spent on the new car.

The decision left me net positive by November 2017. My next predicament was what to do next? I had recovered all my losses, had a paid off car that was cheap to run and maintain (not to mention cheap to insure) and I had all this extra money – what a nice problem to have. But it is also very stressful if you not doing anything with the extra money.

What am I doing now?

I have since committed to the following as of January 2018.

Using some rough estimations:
Previous car instalment – R3800/month
Previous car running costs (insurance, petrol, warranty and maintenance) – R4100/month

With the money that was previously going to the instalment (R3800) I have decided to do the following:

  1. Max out my monthly allowance into a TFSA (R2750/month)
  2. The remaining balance I contribute extra towards my bond (non-negotiable)
So that’s the first R3800 saving being put to good use (I would say)

With regards to the remaining money I was using for running, maintaining and insuring the ridiculously overpsecced gas guzzler, I am doing the following:

  1. R2000 a month goes towards the maintenance and running of the new car (I still have a longish work commute)
  2. R2100 a month I now invest in various Equities and ETF’s
Yes, I used to have a car that could boast a ridiculous 0-100km/h time, but it came with a fully depleted bank account. And I must say that I now get a much greater thrill from my growing investment portfolio than that sports car could ever give me.

Thanks Stealthy, you gave me faith in my decision, and look at me now :)

Kind Regards,
Dumb Moron


Man what a great update! I am sure this decision will turn out to be a major turning point in Dumb Moron’s financial journey, and one which he will be super grateful he made. I think we can allow him to sign his next email “Smart Investor”?


We interrupt this broadcast to bring you some breaking news. Let’s cross to our Cape Town correspondent…

Thanks for the update Steve!

Okay that was a little totally lame!

Seriously though, if you (and your partner/spouse/friends/enemies) are interested in attending, please get in touch so we can finalise numbers.

And lastly, if you would like to be notified of when a Stealthy Wealth Reader’s Meetup is happening in a city near you, you can sign up for the Reader's Meetup mailing list by clicking the button below. (You will only get mails relating to meetups in your chosen city).

Till next time, Stay Stealthy!
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