Six years ago, my grandson made the leap from being a Minneapolis bicycle commuter (year around) to buying an electric bicycle. To you, that might not seem like much of a financial commitment, but to him $1500+taxes was a lot of money. He rode the bike 7-miles-one-way for a brutal winter and learned a lot about crashing bicycles on ice and snow. About 750 miles later, the bike was pretty much trashed from neglect and crashes and Minneapolis’ salted and potholed streets and he handed the bike over to me. Before sending that bike my way, he replaced it with a different model, same brand (Rad Power) of ebike. 2,700 miles later that bike was in almost as bad condition as the first bike. For a while, both bikes lived in my lower garage in working condition and before he took the 2nd one back both bikes had more than 3,000 miles on their electronic odometers.
You might think a car would be the logical next choice for his transportation. For the past 7 vehicles I’ve owned, I’ve kept a fairly accurate log of all the fuel, maintenance, and insurance expenses I’ve incurred/suffered. It is not a pretty picture. A few years ago, a Geezer with A Grudge reader claimed his motorcycle expenses were below car ownership. I, based on opinions I’d read from other riders, doubted his claim. I checked my records and he was right.
I’ve been fooling with a concept for my Rat’s Eye View blog that sort of coincided with things I’d read in various places. One article claimed that “Boomers” owned 21% of US wealth while Millennials account for 5% of that today. I haven’t been able to find any documentation for that, but I did find something similar: “Adults under 40 have been accumulating less and less wealth over the past 30 years, plummeting from owning 13% of the wealth in 1989 to less than 7% today.” And “When baby boomers (born between 1946 and 1964) hit a median age of 35 in 1990, they collectively owned 21% of the nation’s wealth.” Of course, the working class also owns a lot less of the nation’s total wealth in the last 40 years, too. I’m not sure what the first statistic means in relation to the second one.
Almost all of the middle class white X-gens and Millennials I know are rebelling against work and, especially, long work hours for not much money. By the time I was in my late 20s, I was well into my most productive years of an electronic engineer’s career, I had two kids, a car (and a couple of motorcycles), a home and a home loan, and had been working 70-90 hours a week, 50-52 weeks a year, for almost a decade. I was running two part-time businesses out of our home (and garage) when I was 25, along with my day job. Most everyone I knew was at least as tied to work and overtime as I’d been and almost no one was making middle-class money for the effort. I was making $3.40/hour at the time, so overtime and time-and-a-half was “big money.”
The trade-off for resisting that treadmill is less wealth. That “eating your cake and having it” thing. Here is another statistic that I suspect is not unrelated, “Baby boomers, born between 1946 and 1964, face greater risk of depression, according to a 2015 Gallup-Healthways Well-Being Index survey. In the U.S., 14% of baby boomers are being treated for depression. That’s significantly higher than the national average of 11%, double the percentage for millennials.” Nothing is free. “Keeping up with the Jones’es” has a terrible investment cost.
However, the idea I’ve been mulling over is how buying on credit is a tactic to get around rational thought. I know a few young couples who work long hours at good jobs and whose income dwarfs anything I’ve ever experienced. Our young across-the-street-neighbors, for example are probably earning at least $200,000/year. They have two new (less than 2 years old and purchased new) vehicles. I know they bought both new vehicles on credit.
Obviously, if they had saved the money for those vehicles they could have saved a few thousands of dollars in interest over the last 2 years. However, the discipline required to save $30,000-60,000 is substantial. I am guessing that, for most people, after having exerted the kind of discipline necessary to build up a pile of savings, it is close to impossible to hand over all that cash for a new vehicle knowing that at least 20% of that money disappears the moment you drive the car off of the lot. The same loss occurs when the vehicle is purchased on credit, but it’s easier to fool yourself into thinking “I just lost 20% of my $500 car payment” than to think about losing 20% of $40,000 ($8,000).
So, if you are a cash-only person, you’ll likely never own a new vehicle but you’ll have money in the bank and the resulting security and lowered pressure to do a job you resent to keep up with the payments. But you might also spend your life envying people who drive new cars, even knowing they are in debt as a result. Likewise, you might envy past generations for their greater wealth at a given age, even knowing how much of their lives they gave up to work for that wealth. Likewise, in my grandson’s case, looking at the math behind car ownership vs a new ebike every couple of years makes putting up with the hardship of bicycling to work every day a lot easier. According to Bankrate.com, “Americans spend about $15,504 per year on costs associated with a new car and $12,960 for a used vehicle.” My own spreadsheet found that after 72,438 miles and ten years of ownership, my used 2008 Nissan Frontier (purchased for $12,000 in 2014 and sold for $10,000 in 2024) cost me $0.37/mile, $7.51/day, and a grand total of $26,942.69 ($2,694/year) to own: counting, fuel, maintenance, insurance, and taxes.
Unlike most Millennials, I do most of my own maintenance (anything short of transmission work or major engine repairs). I also sell my vehicles on my own (usually through Craig’s List), rather than trade them in or let Carvana rip me off for 1/10th of the vehicle’s sale-by-owner value. Obviously, I don’t buy new vehicles for a collection of reasons (my one-and-only new car was a 1973 Mazda RX-3 Station Wagon), the instant lost value is a big one. Even with all of that, my grandson’s no-maintenance dependence on an ebike in Minneapolis makes my spending look irresponsible. Plus, he never has to feel guilty for missing a day’s exercise because he pedals the hell out of that thing.
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