No One Gets Rich by Shunning New Cars and Lattes
The spending scolds always make the same errors about personal finance.
Bloomberg, January 13, 2020
A little background about today’s column:
I can always tell a scold column is going to be tedious when via its examples of wealthy people not spending their wealth. These get offered as examples of how you, dear reader, can acquire similarly great sums of money, by similarly being cheap.
It’s a deeply flawed argument that misunderstands the most basic issues of how household budgets work.
The latest annoyance: A column that used the frugality of NBA All-Star Kawhi Leonard, (formerly with the Toronto Raptors, now with the Los Angeles Clippers), as its main selling point. Despite his having a hundred and three-million dollar contract, Leonard still drives a 20-year-old SUV. This budgetary virtue signaling is somehow supposed to inspire you to change your spending habits as a way of achieving wealth.
I beg to disagree.
Kawhi Leonard’s SUV may not have that “new car smell,” but I hasten to point out several other things that his 20-year old car also does not have:
Lane-departure warning (LDW)/Lane-keeping assist (LKA);
Collision avoidance systems,
Electronic stability control (ESC);
Adaptive cruise control
Blind-spot warning (BSW)
Seatbelt Pretensioners;
Forward-collision warning (FCW)
Crumple zones
Automatic emergency braking (AEB)
Bluetooth.
My advice: That giant $100m+contract depends on his body staying healthy and operating at peak physical prowess. I’d go even further than to say its not frugal: Driving that car is not a budget-conscious virtue, it is reckless and irresponsible. A modest accident that damages Leonard’s knees or wrists could derail — or even end — his entire career.
That car has 20-year old actuators for its 20-year old airbags with their 20-year old sealed gas canisters that are supposed to inflate instantly. That’s not something I would want to bet my life on; Should Leonard be betting a $103 million dollar contract on these in Los Angeles traffic?
Anyway, today’s column aims at the scolds who hate when you buy a new car. Oh, and Kawhi Leonard, please buy one. It doesn’t have to be anything fancy, but it should have all of the latest safety features to protect both your body AND that ginormous contract. Whoever has allowed you to drive that shitbox is not doing you any favors, foolishly putting not only your physical well-being at risk, but your financial well being as well. By my math, $100 million contract is a lot more money than $100,000 car.
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I originally published this at Bloomberg, January 13, 2020. All of my Bloomberg columns can be found here and here.
