By constantly replacing your car with another one is costing your future retirement. You may not be losing just thousands, but most likely tens of thousands or much more because of making the decision to make monthly car payments instead of retirement savings. Just ask anyone at the age over 70. They can all tell you how they deeply regret not putting more money in for retirement at an early age. This is a warning TO YOU, YES YOU! Who keep looking at all of these car dealer ads. These car dealers are taking away your future retirement. You all need to stop changing cars. Buy one car and keep it for the long haul. Don’t repeat the mistakes of others (people nearing retirement) and stop trying to keep up with the Joneses.
The average new car payment is now $756/mo according to Car Edge. I know you might hate the car you have now, but believe me, in the future, you are REALLY going to hate not having any money to live on in your old age. If you think the cost of living is high now, just you wait until you get older, it will only be MUCH WORSE. If your future older self could come back here, he/she would give you a stern warning to STOP WASTING YOUR MONEY ON DEPRECIATING LIABILITIES!
What if you made the decision to hold on to the car you currently own and simply stop replacing it from now until age 65? What if you were to invest that $756/mo from age 25 to 65 instead of sending it to a car loan?
If you invest $756 per month from age 25 to 65 at an average annual return of 9.9%, the investment would grow to approximately $11,484,695.
With that kind of money, you wouldn’t even need to wait until 65, you could retire way earlier. If you invest $756 per month from age 25 to 55 at an average annual return of 9.9%, the investment would grow to approximately $10,250,460. But where would I get these investments to make all of this money?!?! (KEEP READING!)
According to Nerd Wallet, the average returns by investing your money into the stock market are 10%.
A recently Fidelity survey shows that a whopping 72% of current retirees wished they had opened a Roth IRA earlier in their careers. The study showed that 2,000 people, aged 65 and older, missed years of tax-free growth. Most of the people in the survey said they were confused about how much they could contribute and income restrictions as for their reasons for not investing earlier. Financial advisors have stated that starting a Roth IRA only 5 years earlier could have added an extra $50,000 in tax-free retirement savings. The survey showed that only about 23% of retirees fully understood the tax advantages of Roth IRA’s during their working years. Nearly half of the poll respondents are now paying higher taxes on their retirement income due to Traditional IRA and 401k withdrawals. Younger workers now appear to be learning from these regrets as millennials have been opening up Roth IRA’s. For those still working, it’s recommended that you start contributing to Roth IRA’s while you are in lower tax brackets.
Here are 3 excellent brokerage accounts you can open a Roth IRA with. Roth means you get to take out the growth in earnings all tax-free. Pick one to open your Roth IRA:
Charles Schwab IRA
Once you open an account on one of these brokerage firms, you will need to connect your bank account. This will allow you to put to deposit money to them electronically.
Okay, I sent money to my Roth account. What do I do now?
Next you will have to invest that money into a fund. A great way to start out as a beginner is to buy an Index Fund. You can buy an Index Fund to cover the entire stock market, allowing you to buy a small piece of every company in the stock market. You can buy another Index Fund that could be just the top 500 companies, i.e. the S&P 500. Or you could buy the top technology companies, such as the NASDAQ 100. Slow and steady wins the race. Remember, these funds will go up and down over the years. You’re not looking to put money in and then take it out in weeks to months. This should be money that you can set aside for at least 5, 10, 20, 30 or even 40 years, depending on your age. Once you open a a Roth IRA, you should not take out any withdrawals from it until you reach at least age 59-1/2. To make withdrawals without penalty, you need to be at least that age and the account needs to be at least 5 years old. So if you were to open a Roth Account at 60 years old, you’d have to wait until at least 65 before you could take out the money. So it’s best that you open one of these accounts in your younger years. As of 2025, if you are under age 50, you can invest up to $7,000 per year. If you are age 50 and above, they allow you to do a catch-up and invest $8,000 per year as of 2025. Watch this video and get your note pad out. This couple became millionaires from Index Fund investing. They recommend several good Index Funds to invest in.
It is recommended to do “dollar cost averaging”. I would not recommend just dumping $7,000 one time into a fund until the following year. Remember, the stock market goes up and down during the year. It has several times where it can drop 10 to 30%, but then recovers. It would probably be a good idea to make a monthly budget of the maximum that you are allowed to invest. If your maximum allowed is $7,000, then take $7,000 and divided by 12 and invest that much each month into an Index Fund or others. I’ll make another page showing many other ETF’s that you can invest and hold onto for the duration.