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At 29, I was carrying a million in debt (NT dollars),
including a car loan and student loans — at one point I could barely make the car payments.
One day, after a junior high school reunion, I got talking with a friend
and learned his stock portfolio had passed NT$10 million (about US$300,000).
I was stunned.
We were about the same age with similar incomes, yet our finances were worlds apart.
“Should I sell my car?”
I asked him. His answer was blunt: “Sell it. A car is a liability.”
He had never bought a car himself, yet he had built up eight figures.
The next week I decided to sell my car and sent him a message to thank him.
Three years later, my net worth had turned from negative to positive, and my finances were in far better shape.
Looking back, it was one of the best decisions I've ever made.
Is a car a liability? Defining “assets” and “liabilities”
In personal finance, the difference between an asset and a liability is:
Asset:
- puts money in your pocket
- for example: rental property, stocks, dividend-paying funds
Liability:
- produces no income and may keep draining money
- for example: designer handbags, luxury goods, a car that's expensive to keep
When is a car an asset?
- If the vehicle earns income — a taxi, a delivery truck, a rental car — it can count as an asset.
- But if it's only for getting around and costs a lot to run, it's a liability.
Does a salesperson have to own a car? Not necessarily
I'm an insurance advisor living in Kaohsiung, and 90% of my clients are in the city.
A scooter was all I needed for daily visits, saving both time and money.
Back then I bought a brand-new Honda Fit,
not because my work really needed it, but because I didn't want to be looked down on.
I wanted people to think I was doing well in sales, so I bought a car to prove myself.
It turned out that selling the car had no effect on my sales.
For clients in other cities, I could easily use public transport — the high-speed rail, the metro and buses.
Buying that car was about feeding my vanity, not about real need.
The true cost of owning a car
Taking the Honda Fit I bought as an example, here's the total over 10 years:
- Purchase price: NT$750,000
- Annual running costs: NT$100,000 (fuel, insurance, maintenance, parking)
- 10-year total cost: NT$1.75 million (750,000 + 100,000 × 10 years)
- Value after 10 years: NT$260,000
- Net 10-year cost: NT$1.49 million (1.75 million − 260,000)
Keeping a car vs. investing
If that money had gone into an ETF (such as 0050, which tracks Taiwan's 50 largest companies) at 8% a year:
after 10 years it would have grown to NT$3.07 million.
Compared with a used car worth NT$260,000 after 10 years, that's a gap of NT$2.81 million!
In other words, the same outlay leads to an 11.8-fold difference.
Buying a car too early isn't just spending — it also costs you the opportunity to build assets and invest.
How should young people choose?
In the golden years of financial planning, rather than buying liabilities, focus on building assets first.
- The wrong choice: buy a car to satisfy your vanity, and carry the loan and high running costs
- The right choice: put off the car, invest the money, and let it work for you
Once you've built up enough assets,
you can buy a car easily — and choose a higher quality of life, too.
By then, the view of life in front of you will be completely different.
Do you think buying a car now is worth it? Or should you wait and invest the money instead? I'd love to hear what you think.
Further reading: Does Happiness Have to Cost a Lot? Free Happiness Practices to Feel Good Again
