Editor’s note: Today’s Post is from our PhREI Network founder, Daniel Shin MD, at The Darwinian Doctor.
Dr. Shin shares his personal evolution from Mazda ownership to the Tesla Model 3. He is acutely aware that his Model 3 purchase is out of line with classic financial blogger dogma. Based on the classic teachings he should build his car from scratch for $500 from the local junkyard because financing a car, especially a Tesla is the worst financial move you can make….
So, while I agree with the fundamental financial principles of saving and purchasing assets, not liabilities, sometimes you need to enjoy your journey to financial freedom. In addition, I agree with The Darwinian Doctor that owning a Tesla in a high traffic, long commute region is actually a great investment. Owning a Tesla allows Dr. Shin to free his mind from the task of driving and is worth every penny. He now gets to use his hour drive to focus on mind expanding podcasts, developing his next blog post and evaluating real estate.
This post first appeared on The Darwinian Doctor.
August 21, 2019 by The Darwinian Doctor
Today I go over my complicated rationale for buying a Tesla Model 3, despite being a self-proclaimed finance blogger.
This post may contain affiliate links.
As a self appointed physician finance blogger, it is important to do certain things, like have a financial plan and a budget. I feel it’s also important to live my life in a way that’s a good example to others on the road to financial independence.
Aside from setting a budget and having aggressive savings goals, frugality is often a key tenet of those seeking FIRE. So how could I possibly justify the purchase of a Tesla, which is seen by many as the epitome of luxury?
To be fair, I’m going for a fattier flavor of financial independence: moFIRE(morbidly obese financial independence, retire early). This artery clogging version of FIRE includes room to spend over $200k a year in retirement.
But there’s more to this story than just dollars and cents.
“A colossal waste of money”
The White Coat Investor founder, Dr. Jim Dahle, is famously critical of Tesla owners. It’s become such a flash point of his comments section that he dedicated a blog post to the controversy.
The crux of his argument is that a reliable automobile can be had for $5000, making luxury cars (and especially Teslas) a huge waste of money.
He’s absolutely right that older used cars can provide perfectly fine transportation!
Our other car, and the one I drove for most of my surgery residency, is a 2010 Mazda 3 hatchback. It’s paid off and currently worth about $5000, according to Kelly Blue Book. We recently had to replace a transmission sensor, but otherwise, it’s faithfully plodded along with no major issues. It’s a great car.
So why did I go ahead and purchase this Tesla, which has strapped me with a $900 per month payment for 5 years? Yes, I even financed the purchase!*gasp* *boo* *hiss*
Let’s be real: with annual expenditures of over $300,000, I’m not your typical seeker of financial independence. But I’ve done the math, and I’m acutely aware of the negative drag an expensive car can have on your finances.
At a cost of roughly $55,000 even after the tax credit, the Tesla Model 3 is by far the most expensive car I’ve ever owned.
Life before Tesla
Right before I took the plunge with the Tesla, I had moved up to driving a Mazda CX-5 SUV. In the “Soul Red“ color, this SUV was pretty fantastic. It had a big trunk for our jogging stroller, black leather seats, and a sweet sound system.
But once I accepted a position as a surgeon about 50 miles away from my house, I realized that no car is fantastic when you have to sit in it and manage bumper to bumper traffic for over an hour each way.
After two years of this mind-numbing commute, I was spending an average of over 12 hours a week in traffic! I was gaining weight and feeling irritable and angry. Something had to change.
Either I had to find a new job, or I had to optimize my commute.
How did I choose?
Although my job is far away, I like my colleagues and my employer. I also get overtime opportunities that increase my pay by about 30%. The overtime is really supercharging my journey to moFIRE.
So I decided to optimize my commute as much as possible before I looked for another job.
In 2018, when production of the Tesla Model 3 began in earnest, I seized upon this as an answer to my prayers. I sold my Mazda CX-5 at a loss and bought a long range Tesla Model 3.
These are the ways my Tesla Model 3 has changed my life, in order of increasing importance:
- No more gas stations
- No more oil changes
- HOV lane access
No more gas stations
When I was driving my Mazda SUV about 100 miles a day, I visited the gas station every five days to fill up my gas tank.
Since getting an electric car, I plug it into the charger when I get home and leave it to charge overnight. I wake up to a car with over 270 miles of range, which is more than enough for my needs.
No more oil changes
Since there is no internal combustion engine, I don’t need to get oil changes anymore! This is a great bonus. Previously, I had to sacrifice a morning on the weekends to get my SUV’s oil changed every few months. It was an annoying waste of time.
Electric motors don’t need engine oil. So my maintenance so far has been reduced to just getting the tires rotated every 10-15,000 miles.
HOV lane access
HOV stands for “high occupancy vehicle”. In California, the HOV lane is the carpool lane, and is restricted to cars with two or more people driving together. Clean air vehicles, including electric cars, get a special sticker that allows access to this lane.
This lane is typically much less crowded, especially at rush hour. Since getting my HOV lane sticker, I’ve shaved off at least 10% of my commuting time. This equates to about 1-2 hours a week that I’m not stuck in my car.
Think about what you’d pay to regain 1-2 hours a week of free time.
It it were just the first three benefits, you could rightly argue that I could have gotten a cheaper electric car with the same benefits. A Chevy Bolt, for example, would have been about $15k cheaper than the Tesla Model 3.
But no other electric car has the Autopilot feature.
When I’m on the highway and I activate Autopilot, my Tesla will faithfully stay within its lane, drive at a set speed, and adjust that speed depending on the traffic conditions.
I keep a hand on the wheel for safety, but otherwise my mind is free to ponder deep thoughts and even dictate blog posts into my iPhone.
It’s been a lifesaver on drowsy afternoon drives home after a hard night of call. I’m quite certain it’s saved me from a couple of fender benders, and more importantly, it’s made my commute immeasurably less stressful.
What used to be a poke-my-eye out commute has turned into a low stress time for self development via podcasts and self reflection.
I can’t wait until my car fully takes over most of my driving. This might be here sooner than you might think:https://www.youtube.com/embed/tlThdr3O5Qo?feature=oembedAutopilot today. Full autonomy soon?
After one year of ownership in over 25,000 miles of driving, I love the Model 3 more than ever. It’s a joy to drive, saves me time, and has probably saved me from a couple of fender benders (or worse).
It’s an expensive car, but my commute doesn’t make me almost stroke out from road rage anymore. I’ve been able to continue my job despite the distance. So in the last year alone, the overtime opportunities have more than paid for the cost of the car.
I’ve decided to try to enjoy the journey to moFIRE, as well as the eventual destination. The car is one way I’ve chosen to manifest this decision.
There is a bit of a hard limit to my current situation. My HOV lane sticker expires in January 2022. When that happens, I might have to quit my job immediately. Just kidding. Maybe not kidding. We will see.
Interested in becoming part of the Tesla family? Please consider using my referral link so we both get goodies!
Do you still feel the Tesla is a “colossal waste of money?” Do you have a Tesla of your own? Comment below!