Classic Car Lesson
I recently sold a classic 1969 Camaro muscle car that I had owned for about two years. The buying, owning, and selling experiences were all quite different emotionally and I learned, or mainly relearned, some principles that apply to many areas of life.
Buying the car was fun. I had always liked the style of the early Camaro and started looking online and going to car shows. I found what I wanted, made the deal at a car show in Pigeon Forge, and drove it home. What a ride – no seat belts, no power brakes, no power steering; but loud and flashy.
Owning the car was fun but it involved time, effort, and money. It was cool to show it off and much safer to drive after adding seat belts and power brakes. But, and you knew this was coming, at some point the new wore off and I started to ask myself, “Do the benefits of owning this car justify the cost of maintaining it? “
Selling the car was more of a relief than fun and a little painful to the bank account. I learned that I am not a classic car expert but those that are experts have a much better idea of the current value of a car. It did not matter to them what I paid for the car only what it was worth to them. Owning stocks or mutual funds works much the same way without the thrill of the ride home. They are only worth today what a buyer is willing to pay no matter what you paid for them in 2003, what the value was in 2007, or what you think the future value might be. I also learned that the next time I decide to buy something outside of my expertise, I will find someone I trust to help me evaluate the purchase. The guys that bought my Camaro were in the business of restoring cars and could see (and hear) every flaw. They knew the worth and the potential worth and also the current market price.
I enjoyed owning my 1969 Camaro but it was not the best decision I ever made from a financial standpoint. Thankfully, it is a small loss that will not have a significant effect on my long-term financial plan. We have all probably made spending decisions without enough knowledge. If I had used an expert to help me in purchasing a classic car I would have made better decisions along the way guided by knowledge, not my emotions. I strongly advise when you consider how to invest your long-term savings, find an expert you trust to help you make wise and informed decisions.
If you decide to be a do-it-yourself investor remember, like me in buying a classic car, you don’t know what you don’t know.