I read this article and couldn’t resist my urge to bang wall.
http://ride.asiaone.com/features/opinion/story/bmw-buyer-versus-public-transport-fan
Comparison of extremes
First, the example of an expensive $220K BMW 3-series is a little way off the charts as a basis for comparison against public transport. The author could have used a cheaper car, for example, a Kia Forte (which is a very decent family sedan, by the way.) He also failed to mention that a secondhand car market actually exists. Willful omission?
And for a $2,000/month installment, assuming this is over 10 years, then $240K is the full amount including, not excluding, interests. The author seems to be clueless about the tax structure and rebates. (Business Times article, really?)
The author also seems to have conveniently forgotten about all the recent complaints about queueing, waiting, squeezing, breakdowns, smelling people’s armpits, getting drenched in the rain, having people rub you all over, getting scolded by random aunties and having uncles with a laptop watch porn withbeside you.
Where the hell are the taxis when you needed them most?
Has anybody also forgotten about SARS?
Can you or do you really want to bring a family of 5 onto a crowded bus with bags of groceries?
What about the time and opportunity losses of the aforementioned Public Transport Fan (“PTF”)?
There is indeed “a huge price to pay for convenience.”
Anyway, let’s just take that as that, and that the BMW driver has a $340K hole in the bank as the author of the above article described.
Invest, invest, invest!
The author brought up investing! Why am I not so damn surprised?
I haven’t seen my investments yield as much as the author has described. The truth is there are risks associated. The markets have been very volatile for the past four years, and I do not see it correcting anytime soon. All I can say is, invest with care.
And for a regular investment of $2,000/month, a 3-4% dividend yield would return $720 every year. That is per year! Or about $60 per month.
Condo… in Pulau Ubin?
And as described by the author, if these dividends have been reinvested, i.e. with the effect of compound interest, the eventual sum of $999K would buy the PTF a piece of “suburban condominium” in 25 years. Really? With all the talk about investments, what ever happened to inflation?
Anyway, I will put this theory to the test. I am investing fixed monthly sums into dividend yielding stocks starting this year. My portfolio should be growing as quickly, or even more quickly than my car installments. Unlike some book or article writers, I walk the talk.
Will you really save that $2,000 a month if you didn’t drive a car?
Sometimes money that goes around comes around. If you don’t spend on one thing, you end up spending on another — food, clubs, branded goods, gadgets, etc. Sure, maybe you won’t spend all of that 2 grands, but some of that is going to be spent somewhere, somehow.
Public transport (and Taxi for that matter) will always be cheaper. Private transport is a lifestyle choice. If you are single, maybe it’s still OK. For those with a family, sometimes a car can really be of much help.
And for those looking for a girlfriend… need I say more? 😉
Just for laughs:
