I would like to share a short tidbit from my new book, Stop Acting Rich. You can read more in Chapter 7, The Road to Happiness.
I admire people who drive Buicks. They show wisdom in buying a car that ranks high in both quality and value. Plus, according to Automotive News, people who trade in Buicks are the least likely to be “upside down” (owe more on the trade in than the vehicle is worth). About one in three (33.6 percent) of all new car buyers in the United States is upside down. Only 13.1 percent of those trading in Buicks were found to be upside down. Contrast this with those who traded in Mitsubishis where 56.1 percent were in this unenviable category.
I also have an affinity for those who own Buicks because these people seem to me to be among the least pretentious among all of millionaires who drive motor vehicles. They typically understate their wealth via the middle-of-the road brands they select. They understate even more than Toyota millionaires. From suits to shoes, from watches to vodka, as well as the stores they patronize, Buick drivers who are wealthy are anything but flashy.
After looking over all the correlates of Buick ownership, I recalled a personal experience that brought home what the data show: those who have a strong need to display high status may not have a lot of interest in associating with Buick types. For several weeks, I drove a Buick, my father-in-law’s. During this time, my family was in the process of building a house. The weekend before ground was to be broken we visited (via the Buick) the lot to make plans for our future in the neighborhood. One of our new neighbors, Buff, introduced himself, and we chatted for a few minutes. Buff then asked us for our current address and telephone number, “just to keep in touch.”
Later that weekend, we received a telephone call from another new neighbor, Dell, who introduced himself as the “Chairman” of the Architectural Review Committee in the neighborhood. He also informed us that we could not break ground until the plans had been approved.
After looking over our plans and the Buick in his driveway, Dell made the comment that “these are not custom plans.” He said that most of the homes in the neighborhood were custom homes. Later, I discovered that the existence of an “Architectural Review Committee” and the claim that most homes were “custom” was so much baloney, but at the time I was concerned if not offended. I assured Dell that our builder was outstanding and that he had suggested using these stock plans. I paid $175 for seven copies of W.D. Farmer Company’s “Stock Plan #2727-A.” Our builder was familiar with the house because he had built it dozen times and had worked out all the problems. As Dell reviewed our plans, he spotted something else which disturbed him. “What! No Jacuz? I don’t see where you are going to put your Jacuzzi,” said Dell. I informed him that we didn’t want a Jacuzzi; we would not use it, and we would prefer to spend the money to help fund a 40-year roof and 44,000 bricks. Finally, Dell gave the “official” approval, but we could tell he was not particularly happy about doing so.
What was this all about? I have a theory that Buff (who drove an entry level leased Porsche) panicked when he saw us drive up to the lot in a green, nondescript Buick. (It was also missing its hubcaps, but that’s another story.)
We never did become close friends with Buff, though when my book, The Millionaire Next Door, made The New York Times’ Bestseller List, Buff’s wife called up and wanted to host a book signing party at her house! It is amazing what a little success can do. It can even transform the Buick-based opinion once held by an aspirational.
Outstanding story. I’m active duty military. One of the biggest problems I see with Soldiers of all ages, is the tendancy to purchase expensive vehicles, rationalizing that they are in no danger of not being paid. When I drive around in my 2000 Ford Taurus with dents and scratches on every side, people think I drive this vehicle out of necessity. Not so. It is paid for, reliable and comfortable. And when their paradigms change when I tell them how much money I have in the bank, well its an experience I like to relive time and again.
An awesome article and a great reminder that we are more than our cars. We spent two years sharing a single car, a Pontiac, until we saved up enough to purchase a nice used Chevrolet with cash (and paid off all of our other debt at the same time). We continually received questions from family and friends of why don’t we just finance a new car. Simple: we choose to not be in debt! Both cars are now paid for, we have no other debt other than our house, and we have a hefty retirement account in process; not too many of our friends and family can say that!
Fantastic story. I worked in the mortgage industry for 17 years and I was constantly amazed at how many people in their early 20’s would buy new cars that required $500 to $700 per month payments. They would do this BEFORE qualifying for a home loan. This was, to me, absolutely ridiculous. Why a young man or woman needs a brand new Chevy, Ford or Dodge pickup or a BMW at that age is beyond me. It is my sincere hope that we are entering a new era in which we are all more fiscally responsible. Less debt, less concern about what others think about our image, etc. Keep up the great work! (my family has driven Buicks for years…..my mom and her sister have no need to work……retirements are set….coincidence?)
My paid for,1999 green Century Buick was named “Betty the Buick” by my kids. It still runs errands all over town and is usually filled with items to take to the recycle center, Salvation Army, and other odd items I find. Being a non-conformists of the 70’s I guess one thing that stuck with me was that I don’t think OR feel I have to impress anyone, nor do I care what MOST others think about me. I also passed this old car thing down to my kids as I had 3 teenagers at one time, with 3 cars and insurance. NOW that was a kicker. So they all had safe, but old used cars, that were paid for so THEY did not have to pay collision insurance on them. The day they turned 18 I put each car into their own name, along with their own insurance, [and their own cell phone, believe me never let a kid leave home with a cell phone bill that you have to pay]. No I am not wealthy as to money, but I am very, very rich. And I do have my own home, and a rental house, and a few other investments. The most important lesson I learned was to not keep handing out the money to the kids. It was a great lesson for them as well.
While I think Rich’s comments are most constructive (it is always neat to get a peak into other’s financials) I wanted to point out that I bought a brand new car when I graduated from college and got a great job in a lousy location. The location was so bad I wasn’t comfortable living in the town so I had to commute in. Last thing I wanted was my car to break down in that town. So I bought a new car. Best purchase ever. A brand new Honda Civic, purchased in 1999, which I still have now and is going strong. I won’t buy another new one until this one breaks down. That was my original goal when I bought new. And yes, I financed it, but I paid it off early once about a year’s worth of paychecks had come in.
well.. it’s like I thought!
Hunk Japanese. I don’t understand your comment. Expound please.
Rich
Beth, I bet your payments weren’t $500 to $700 per month. You also bought one of the best cars available. I would not argue with that choice. AND you didn’t lease it and turn it in 36 months later! You may be waiting a long time for it to break down too! LOL!