by Wendell Cayton

According to an article in USA Today, I qualify as a “cheapskate.” No, not because I make my own soap, or buy the cheapest beer, but because I drive a car with over 250,000 miles on it. “Not such a bad thing,” says Thomas Stanley, Ph.D., author of The Millionaire Next Door.

Dr. Stanley, who makes his living studying the habits of millionaires, tells us that those interested in achieving real wealth view financial independence as more desirable than displaying high social status. His study subjects see cars as functional tools of transportation, not status symbols. They are more likely to own older, American-made cars rather than newer, more glamorous foreign models.

I can attest to his findings from my experiences in dealing with the financial lives of many people. Show me a person who constantly trades for a new car, or leases a more expensive car than they could buy, and I will show you someone who is having trouble accumulating wealth!
I wasn’t always so insightful. I remember coming home from an all-expense paid, 13-month, camping trip in Southeast Asia with a year’s worth of combat pay in my pocket. Bought the first Alfa Romeo I laid eyes on. Learned a couple of years later in the oil fields of Western Colorado that “metric” and Italian precision hadn’t made it into this land of 24-inch crescent wrenches and breaker bars!

After “investing” in a number of other foreign sports cars, I began to understand what Dr. Stanley was talking about as he described the inverse relationship between wealth accumulation and frequent new cars. He said we are essentially a consumption-oriented society. If we choose, we can become wealthy by adopting a defensive strategy of inoculating ourselves from contracting the high-consumption lifestyle that many of our non-wealthy, but high income-earning neighbors have adopted. By so doing, we should be able to save significant amounts of capital that can be put to better use as investments in real wealth producing assets, rather than the superficial.

Stanley’s PAWS (Prodigious Accumulators of Wealth) are more likely to:

• Buy used cars, especially large American makes. They buy them by the pound. Why spend $15 per pound for a BMW 740 sedan when you can buy a Ford Explorer for $5.98 a pound?
• Spend 25% less than those who inherit wealth on their most expensive car purchase.
• Be more interested in objective measures of wealth than in the car they drive.
• Favor models such as used Jeep Cherokees, Cadillac De Villes, Ford F-150 pickups and Explorers, Lincoln Town Cars, and Chevrolet Suburbans.

I have found other advantages to owning a 250,000-mile car. I haven’t made car payments in years. I don’t waste a lot of time in front of magazine racks reading up on the latest models. My car is easy to find in an airport parking lot. It’s the one that doesn’t look like all the newer cars . . .no fancy round headlights with little wipers. And it continues to transport my daughter, her friends, and a dog without causing me to stress out over their spilled drinks or muddy paws.

Finally, my wife apprised me that granite counter tops are more important in our life than cars. So what do I need a new car for anyway?