Does the 20/3/8 Rule Change If Car Buying Is Your Hobby?

August 7, 2023

Once you have reached step seven of the financial order of operations, saving 25% of your gross income, and are in the hyper-accumulation phase, you have the freedom to spend your hobby money on a car payment if you wish, as long as you have checked all the other boxes, but skipping essential steps is not advisable for long-term wealth building.

Check out our 20/3/8 hub, and check out our car affordability calculator to help you make your next car purchase!


Let’s move on to Austin’s question: how does the 20/3/8 rule get affected when my hobby is doing car things? Can I spend my hobby money on a car payment? Yes, yes, yes. Once you get to step seven of the financial order of operations, once you are in the hyper-accumulation phase, once you are saving 25% of your gross income for your future financially independent self, you’re in this beautiful place where you get to do with your money what you want to do with your money. You don’t have to follow any set rules, you don’t have to fall into any set boundary. So if you decide, once you’re saving 25% and you’re checking all the boxes, that you just really want to go buy a super expensive car, that’s okay. If you want to just waste money on interest over a long period of time, that’s okay so long as you’re checking all of the other boxes. Now, is that optimal? Is that going to move you towards your goals more rapidly? It depends on what your goals are. We, Brian, have friends, clients, and colleagues that are car people and they’re self-professed, “Hey, I’m a car person.” And so that is where they derive a lot of their utility. They want to drive nice cars, they stay up with the thing, they know all the latest and greatest, all that kind of stuff. And so you can do that once you have made sure that you check all of the other boxes. Agree? Disagree? One to five. I get entertained by the comments from people who, when they talk about anything with cars, they’re like, “But I’m a car person. I’m a car person. I’m a car person.” Like, this is your break glass, hit the button, and be like, “Oh, it’s okay, you can blow up your wealth-building, you’re a car person.” You know what? We’re all car people. Oh, wait, you didn’t tell me you’re a car person because I mean, think about it. You could ask anybody, what is their dream vehicle? They daydream about, and it might surprise you the answers, but we’re all going to have answers. Just because maybe you grew up on Sundays watching all the off-road shows, all the rebuilding of the car shows, and then my dad and my brother, we always had cars at the house because my dad was repairing them for all the neighbors or they – my brother and him – were restoring classic cars. But can I be honest, that’s a cop-out because you have to do exactly what Beau was saying. Don’t skip leg day. You gotta actually do the hard work of getting to step seven and eight before you can buy the fancy car because otherwise, you’re just faking it till you make it. Yep, and you know what? Faking it till you make it usually doesn’t work out. No, you know, you can justify it in a lot of ways, but really, you’re cutting steps so that you can look cool, show off, and flex. But I’m telling you, if you really want to be wealthy and do this the right way, do it in the right time, and that means you’ve got to make it to step seven and eight of the financial order of operations. Go to moneyguy.com/resources. I can make the sound, so, oh my God. I should have known I was getting too fancy with it. I’m a walking cartoon, but in all seriousness, make sure you don’t skip the steps, Austin, and you will be much better. Hopefully, it’s so good. If I start bleeding because it felt like there might be something there, I was like, “No, thank God, no, I’m clean, I’m clean. Carry on. I’m cut Mick, I’m cutting. Maybe I have the microphone too close.” But Austin, actually, have success. Don’t fake it until you make it. It’s okay to be a car – you’re saying it’s okay to be a car guy in the right time. It’s okay to do that, but that doesn’t give you an excuse. I mean, you just can’t say, I mean, because you could do that thing, ‘I’m a food guy.’ Does that mean I go out to eat every night and forfeit doing my Roth IRA or something else? No, you don’t get to just yell that out to people. You don’t get to just make up, “So, I’m a TV guy.” I mean, no, that doesn’t work. You gotta do it in the right time, but that doesn’t – okay, wait, next time we see a comment, it says, “I’m a car guy.” Everybody is out there to remember this discussion.



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