Back in my early 20’s, I was the definition of a square. I barely knew what Chinos were as I simply went from wearing tracksuits to wearing jeans and then suits. I practically skipped the whole fashionista years that most young people experience.
The complex
Peer pressure never stops, it just that the impacts become more costly as you get older.
How many times have you been picked up by your friends in nice cars and thought, why don’t I have one? Then your close friends start asking you, why are you still riding on the bus and not jumping into your own car. Or even worse, someone is looking down on you because you do not drive a nice car. Well, this all happened to me. I isolated myself for most of my 20’s mainly because I wasn’t happy with where I was in life. This single act of isolation saved me from the grip of peer pressure as I didn’t care how I looked or was perceived. Comments came from time to time, but I just didn’t care. I was out of the way, no socials except LinkedIn. In my mind, I was off the grid. Peer pressure never stops, it just that the impacts become more costly as you get older.
I’ve had friends who bought German cars when I didn’t have one. Self-discipline and a bit of stubbornness did not allow this to phase me. I held onto the concept of delayed gratification, which was to do the boring things first and then fun things later.
Not everything that glitters is gold.
The sensible guy will most likely finish the race whilst the majority will not
Whilst I was looking like I was 22 years old turning 60, my friends were living like superstars. Another thing that kept me sane was that an uncle of mine always used to say to me that I will one day reap the benefits of my stoic determination to be sensible. I disagree with the quote which says “nice guys finish last” because experience teaches us that the sensible guy will most likely finish the race whilst the majority will not. I strongly recommend that we should promote long-suffering and salute our friends who are delaying instant gratification.
Most people get a new car via two means, through finance or purchasing it outright. My peers purchased their cars with £20k cash, and some leased/ took out loans for their cars which cost between £300-£600 a month. I will illustrate to you what I did with the same £20k lump sum and £600 a month.
I didn’t go clubbing, stayed off social media, I worked hard, slept and ate. I went on a few holidays with family or flew solo. That was it for me. But then the age of 27, it was time for me to step on the ladder.
I saved £20k, bought a flat and my mortgage was £600 a month. How ironic was it that my peers were spending the same amount on a car whilst I had bought a flat that went up in value? Sometimes peer pressure should be looked at as peer poison.
Car versus my flat:
The flat was purchased with a 10% deposit of £17,000.
The above shows that my £17k investment in a flat in 2016 is now worth £52k whereas a BMW would have depreciated by around 50% and will continue going down in value.
Generally, house values appreciate whilst the majority of cars depreciate. Do not be the one to jump on a sinking ship.
When peer pressure almost knocked me out
Now a property owner of two homes and having grafted for ten years without any luxuries, if there was a time for me to ball out it was in 2018-19. Two close people to me bought terrific cars, and I thought about what I should do. The pressure was on me. My golf was consistently failing me and even broke down completely at a point. I had to make a judgement call which was to pay £1,500 to fix my car that was not worth £500 or just go and get a new one.
Which one will you pick? You can lie to me but not yourself.
I pondered profoundly and thought a BMW or Mercedes would suit my new found position in life. I considered getting a company car as the firm I worked in was offering an excellent selection of modern company cars. The drawback was that I would be taxed heavily for the benefit.
With my mates picking me up in their spaceships and me jumping back into my analogue car, the decision was made or at least I thought it was.
As I was about to go for a company car, I considered my debt levels, the impact on my income levels and plugged this into an excel spreadsheet. If everything else lies, numbers don’t, so I decided to kill the peer pressure and fix my golf for £1,500. £1,500 beats spending £20k on a car or getting a car on finance at £400 a month which works out to be 14,400 over 3 years (£400). The option I selected was a one-off payment of £1,500, which ultimately saved me £12,900 over three years.
Why did I pick the long way?
I feel that anything worth having should be worth the wait. I did not want to sacrifice my future for the sake of some expensive thrills like getting compliments on my new car or receiving hollow respect. I was labelled a grandad for my rigid lifestyle, but lord knows I want/ like the nice things but not at the cost that could make my future harder for my family and me.
I have learned how to be happy with little and not allow frivolous spending to be the backbone of my happiness.
My observations and key lessons
A small number of my peers went on to buy their own homes whilst having great wagons. However, the majority leave themselves in a financially difficult situation as long term financial commitments like finance can harm you. Saving 20k to buy a car just to feel good is like planning to sleep in an expensive hotel when you can’t afford to pay your rent. It’s senseless.
I bought my first flat in 2016 on a 30k salary, do not think you need to earn 50k and above to buy a property of your own. Even still, if you earn less, you could consider shared ownership. How many people earn £30k but drive a £20k car, as the famous words of my boy Jide goes this merely is “Hustling Backwards”.
Buy a car at a budget that allows you to take care of your medium to long terms plans comfortably. High car payments may impact your ability to lend money to purchase a car in the future.
Learn to be comfortable making the difficult and unpopular decisions as I did. Peer pressure almost got me, but my responsible senses prevailed.
Buying a house is not for everyone, but being financially prudent should be. Investing or saving for your future is vital when considering the rising costs of living.
Do not allow peer pressure to drive your life to the point that it’s too late to turn back. The things that look good when your young may not look the same when you are older and have nothing to show for your extravagant car purchases.
Be sensible but enjoy yourself in your process- BALANCE.
Comments