A big parameter while purchasing a car is the RESALE VALUE. Now how will a millionaire decides which car they deserve to buy?
Whenever you decide to purchase a car how do you reach the options? It’s obviously the BUDGET which is the first thing to consider while looking at options. And it’s a main reason why most of the people can’t buy a car of their own choice.
Budget decides which car a person should buy or not? But how do you decide the budget of the car?
Some say that maybe higher than your current car’s price and now which cars do millionaire drive? How do they decide? But before that we need to know who these millionaires are?According to a textbook definition “A millionaire is a person whose net worth is 1 million.”But a true millionaire is one whose net income of one year is 1 million and is consistent for last 5 years. And these people spend their money according to a money management system.
Ø World’s Best Money Management System by T Harv Eker:
If you’re net income is 100%
Groceries, Electricity, Bills, Rent, etc.
FINANCIAL FREEDOM ACCOUNT 10%
Investments, Gold, Mutual funds, etc.
LONG TERM SAVINGS FOR SPENDING 10%
Holidays, weddings, big electronics, CAR, etc.
Dinners, spa, parties, alcohol, shopping, etc.
Seminars, workshop, books, courses, etc.
Now why I told you this is because it covers car also. So we will decide on this basis, how much we’ll spend monthly for the car you want to purchase. So LTSS is 10% and we’ll take half of it i.e. 5% of your total income.
Ø If a person is earning:
1 million in a year
Rs. 6.5 crore/year
Rs. 55 lacs/month
So, 5% of 55 lacs
Is 2.75 lacs should be your EMI.
Ø If a person sell their car in every 5 years:
Interest on car loan 11%
Loan Amount (calculated from the EMI calculator app) 1.25 crore
Resale value of 5 year old E-Class 35 lacs 1.6 CRORE
So, a millionaire can purchase a car worth Rs. 1.6 crore.
Net income - 2.5 lacs/month
5% of 2.5 lacs = Rs. 12500/- (EMI)
And now use the EMI calculator app you will get the LOAN AMOUNT AS RS. 6 LACS.
Ø Car Budget:
Resale value of current car 3 lacs
Saving for down payment 3 lacs
Loan Amount 6 lacs
Now you can purchase any car from 12 lacs. But some people are having much more expensive cars than this without looking at the budget. This is wrong this means you had overspend money on this which can be minimized with the help of these calculations. So now take a good calculated decision before buying a car and consider all these aspects. And if you want to spend more on this type of knowledge which you’re not doing as per 10% of Education, there are many courses available with me and I can help you with many other problems as I am a Life Coach and Motivational Speaker and if you want more details of this money management system you can join our Wonder Mind Workshop of 2 days.