Truth is, in 2011 I had a financial advisor (from USAA) who told me where to invest my cadet loan money…and then I read the book “Millionaire Teacher” about how a school teacher became a millionaire through frugality and index funds by the age of 40. It blew my mind, and planted the seed. I discussed the topic with a couple of my econ professors, other cadets, and with a little more reading and research, came to some conclusions.
It made me realize that my USAA financial advisor was seriously ripping me off, as most financial advisors do. There’s an entire community of public service professionals (teachers, govt, first responders, etc.) and other modest income people who retire with multi-million dollar portfolios by stashing their Roth IRAs and TSPs (401k for federal employees) with continual contributions into low cost, widely diversified index funds. I’m glad I learned those lessons at age 20, and it’s one of the reasons why I’m in a financial position to buy a Tesla at age 30.
I understand why someone would avoid car debt, even at a greater opportunity cost. There’s great peace of mind of not having a car loan. I respect that. Just don’t justify your decision to do so by saying 5% to 10% annual return investments are hard to come by. Full disclosure, across my three Vanguard index funds I average 13.6% per year, from March 2012 to present. Their fund performance (and cost basis) is no secret, and open to everyone. My TSP has done marginally better, but that’s just for military and feds.