Big News: We Bought a Car (and Learned Some Lessons)


Presented By: The Early Bird from MarketBeat

The Big Purchase

After searching for a year, we finally bought a second car for our family. It's a used 2021 Volkswagen Atlas, and it cost us... drumroll, please... $31,126! But wait, there's more:

•We added a 5-year warranty for $2,500

•Taxes were over $2,000

•The interest rate on our loan is 7.4%

All in, we're looking at almost $36,000 for this car. Ouch!

You might be thinking, "That's a lot of cash!" And you're right. My ideas about car prices were stuck in the early 2000s. Talk about sticker shock!

But our daughters are 17 and 15, so this will likely be for 2-3 years, and we'll trade in and downsize to something smaller.

The Money Shuffle

Remember how I've been talking about buying shares of PepsiCo, Johnson & Johnson, and Nexstar Media going back a few years?

😬We've been putting money into those stocks instead of saving for a car or building our emergency fund.

We also had a secret "Kids Car Fund" where we bought $100 of SCHD monthly since mid-2022. When we closed it this week, it was worth $3,873.69 and had gained 14%.

Instead of buying a car for the kids, we're giving them our 2011 GMC Acadia with 165K miles, but it needs a few thousand dollars of transmission and cooling system work.

So, some of the kids' car funds will go towards those repairs.

The Big Decision

So, what did we do? We decided to sell some of our stocks to pay for the car. We're basically giving ourselves a $42,000 loan from our investments.

Here's the back of the napkin plan:

1. Sell some of our dividend stocks:

•PepsiCo (PEP)

•Johnson & Johnson (JNJ)

•McDonald's (MCD)

•A few Nexstar Media (NXST) shares

2. Use the money to pay for the car

3. Pay ourselves back over the next 2-3 years, tracking on a spreadsheet

📊Remember to follow me on BLOSSOM to see my portfolio and get live updates on my buying and selling moves!

The Interim Strategy

While paying ourselves back in the taxable account, we're looking at putting it into:

•ETFs like SCHD or Vanguard Dividend Appreciation Index Fund (VIG)

•Stocks with higher total return potential like Visa (V), Mastercard (MA), Clear Secure (YOU), or Costco (COST)

These options could give us better growth than our current mature dividend stocks, which is important since I'm 46 and not quite ready for the "wealth preservation" phase.

The Lesson Learned

We put the money we knew we'd need soon (for a car) into the stock market. That's risky!

The stock market has been doing fantastic lately, but what if it suddenly dropped when we needed the money? We could have been in trouble.

Experts say any money you need within two years shouldn't be in stocks. It should be somewhere safer, like a savings account or a money market fund.

What's Next?

As we pay ourselves back, we'll be smarter. For our short-term savings, we'll use safer options like SWVXX. We'll look into the growth-focused stocks and ETFs I mentioned for our long-term investments.

Your Turn!

I'd love to hear from you. What do you do with money you know you'll need in the short term? Do you have any tips for saving for big purchases?

😁THANK YOU to everyone who responded to the last newsletter!!

Check out the portfolios and podcasts, or see what’s cooking on YouTube.

And now, here is this week's portfolio activity...


Dividends Received This Week ~$0😔

Dividends Received Year to Date~

$5,931.59


Stocks Sold (AVERAGE)

  • 500 Schwab Value Advantage Money Fund (SWVXX) | $1.00

Stocks Bought (AVERAGE)

  • 1 Nike (NKE) | $82.65
  • 5 VICI Properties (VICI) | $32.30
  • 3 Vanguard Total Stock Market ETF (VTI) | $284.57
  • 5 Schwab US Dividend ETF (SCHD) | $28.31

Notable Ex-Dividends This Week + SSD Score

  • 10/15 Abbott Labs (ABT), 1.89% | 90VS
  • 10/15 Hormel Foods (HRL), 3.64% | 90VS
  • 10/15 AbbVie (ABBV), 3.19% | 80S
  • 10/18 Colgate-Palmolive (CL), 2.00% | 90VS
  • 10/18 Procter & Gamble (PG), 2.35% | 99VS

🎙️Podcast of the week🎙️

Clark Howard talked with Jonathan Clements, a money expert, about death and finances—two important but tough topics that affect everyone. You should listen if you want honest advice on managing your money and preparing for the future in an easy-to-understand way.


🎦If you missed it, Professor Stephen Foerster joined us to debunk a famous Coca-Cola (KO) myth and share several other investing stories!

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Investing Newsletters You Might Like

⭐Ryne Williams writes a free weekly dividend newsletter and creates multiple top-notch YouTube videos every week.

🤑Rick Stambaugh from Orange Mountain Financial brings you ‘Grow Retirement Income.' He’s a seasoned pro with over 30 years in trading and a passion for guiding folks to a prosperous retirement.


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Rammstein - Sonne

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