When I celebrated the new year, I had absolutely no idea what 2019 would have meant to me nor would I have expected all these milestones to be achieved in such a short period of time. I bought my first car at 20 years old with no financial help from anyone, and I think that after receiving a few messages asking how I was able to do so– it seemed important to share with you guys how that was possible for me, and how you can potentially do the same.
Firstly, I’m obsessed with how money works, earning money and saving money. I’m about to dive into investing money but until then, I’m just all-round excited about life. I have always been a planner when it comes to the order in which my life should happen, and as much as I can’t control life 100% — I can control my decisions in it.
I found myself parenting my friends with financial decisions, and lifestyle choices consistently. I would be driving in the car and I would be that annoying person that lectures whichever victim innocently chose to be in the passenger seat that day and bombarded them with questions like , “so what are your goals moving forward?”, “how are you spending your money?”, “how much of your pay check are you saving?”, “have you tried the keto diet?” or “do you want to buy a car or a house, and when?”
I’ve become that person because I realize how exciting life can be once you actively start getting your shit together. It’s amazing when you can see where your money is going, and how you’re able to control it. It’s empowering having a life plan and seeing things slowly unfold in the exact way you had scribbled it down on a blank sheet a few months prior. I always found the phrase “grabbing life by the horns, and not the tail”, to be quite cheesy but now that that has literally become my motto, I absolutely love it and I live by it.
I am going to be very candid with what job I do, how I budget with that income and how I’m able to hit a few major milestones at this age (20). I understand that not everybody will have the same opportunities but the hope is that you will read this blog post and try to tailor my advice and my experiences in a way that can suit your life accordingly (hahaha, I crack myself up).
First Things First
Currently, I am in sales, which means my income is based on my ability to figure out a consumer’s problem, understand who the consumer is, add value to my product, strategically isolate their problem and use my product as the solution to said problem. Capitalism. Create a problem, then sell the solution. I work on commission, and thankfully I’m very good at my job. I started this sales position at 19 years old, as a representative.
It then means that at that age, I was still living with my parents, and I had little to no mandatory bills and the aim is to save as much money as I could. I had this incredible drive to save as high as 80% of my income when I just started. I was scared by the thought of a commission job, because I constantly thought, “what if I don’t make any sales?” That fear drove me to save as if a drought was coming the next month. The piece of advice here is that if you are still living with your parents with little to no bills, you have no excuse to not be saving majority of your income. I told myself that I needed to hit a certain dollar number before I could go and treat myself.
For example, with my first ever job (before sales) I worked $60,000 JMD per month, I needed to have 4 times that amount in savings ($60,000 x 4 = $240,000) before I could spend any amount miscellaneously. Each person may have their own goals, but this was mine. I put that $240,000 in a savings account that I would never touch unless I lost my job or for extremely serious emergencies. I continued saving my disposable income in that savings account and it grew and grew. Great, so my financial security was looking good, and I was feeling good about it.
Now, I’m into sales and I’m making way more money– so I start saving by the whole numbers because it becomes harder to budget by the month because of the fluctuating salary. For example, if I had $310,000 in my account, then I only had $10,000 to spend miscellaneously until my next paycheck to even out that number at $300,000 flat. Following that method, I hit my savings goal in no time.
Within a year at this beautiful company, I was promoted to a manager and closer. Sales became my life, and now I’m more committed to it than ever.
Now, with this great new position– I’m making way more than when I just started working so now it’s natural that I start feeling that I can make some lifestyle changes. I want to go out to dine-in restaurants to eat a bit nicer, and now I don’t want to live with my parents so I consider renting an apartment and accruing a car loan so I can move around conveniently. I have the money, so why not?
Wrong. First mistake.
Many people don’t realize but the more money you earn, the more money you spend. It’s a normal human trait whereas we are insatiable people meaning we cannot be satisfied and we will always be wanting more. Stop living above your means to support a lifestyle you genuinely cannot afford. Take it a step at a time. You’ll get there but get there comfortably and when the numbers can back you up.
The best thing I did was to pretend I was still making only $60,000 a month even though I made much more. It’s about control and discipline. That extra money is now just pooling into my bank account, and it’s growing faster than I even realized.
I wanted to be financially able to do whatever it was I needed to at any given time. If I wanted to start a business, I had the money to support it. If I wanted to travel, I had the money to spend. At no point did I want to feel like I wanted to do something, and not be able to do so because I never had the means to do it.
After following those saving tactics for months consecutively, I was now in the financial position to be able to purchase my first car.
Now, to be perfectly candid, my car cost about 2.3 million dollars, or about $18,000 USD. Before I made the decision to purchase, I sat down with a note pad and a calculator and added up how much taking taxis were costing and if it made financial sense to buy this car.
Lets talk Mathematics.
If I spent $1000 per day for 6 days on taxi fare to work and back, that’s $6000 per week. For the month I would have spent $24,000 ($6000 x 4weeks) on basic fare. I found myself going out and about at least 3 times per week after work where I would charter a taxi which costs $2000 on average per day round trip which brings me to an additional $6000 per week and $24,000 per month. Total in a month, I spent $48,000 as a total per month on transportation only.
If your transportation costs are less than mine, consider buying a less expensive car to match your expense
It would take me 48 months of taking taxis as I did, to spend the same amount for the car in total ($2,300,000/$48,000). If I took out a car loan at 48 months, it would cost me $38,000 per month with interest already calculated in that — better than $48,000. Now, the numbers made sense for just having the car but a car comes with additional costs for regular maintenance and servicing and paying for gas which aren’t cheap, but thankfully banking for a car that was under my budget– made it easier to pay for these additional costs with ease. I decided to commit to that $2,300,000 for my car and I’ve been happy with that decision since. My quality of life has improved significantly and paying a little bit more for that peace of mind made it all worth it 10x over.
It took me a year and a half of this saving method to be able to purchase my first car.
Now, I plan to have this car for 2 years, then sell again before it depreciates too much in value and before I start facing major car problems which would costs me more money than planned for, then reinvest in a newer and nicer car.
The next thing on my bucket list is purchasing my first house. Buying a house while young is a major stepping stone, but doing so while young and as a single individual makes it all the more daunting. I can’t give any advice on this house purchase just yet, but once I do, I’ll be happy to share. If you have any advice, please let me know! This process has been scary.
Share, Comment, or Send me a message over by my ‘contact’ page if you have any questions or thoughts you’d like to share ❤️
Twitter – @sahkyle
Thanks so much for giving this a read, and I hope you were able to pull a thing or two from it.