Rule #25: The Bike On Top Of Your Car Should Be Worth More Than The Car

My good friend, Sallie, is passionate about cycling. She’s already ridden her bike 1,977 miles this year and she’ll probably ride over 2,000 more before we ring in the new year. A few weeks ago, I went for a ride with her on the Durham Tobacco Trail. While we were having coffee after our ride (see Rule #56) she showed me her favorite coffee mug. On it were several truths about bicycling etiquette that were sampled from a humorous list of 95 others known as The Rules. Whether you consider yourself a cyclist or not, you might enjoy checking out the complete list here (pardon a bit of language.)

I think Rule #25 may be my favorite; the bikes on top of your car should be worth more than the car. It stuck out to me at first because I thought it was funny. But then I realized that it’s more than a humorous cycling adage, it’s a statement about priorities. You’d have to really love bikes and go out of your way to be able to adhere to such a strict rule, right? Well, the financial advisor/cyclist in me started wondering what it might look like for me to adhere to Rule #25. I figured I could approach it with either an expensive bike or an inexpensive car strategy. In the end, I decided that a combination of the two would be most practical for me. With my objective and strategy in mind, I set off to find out just how much bike I’d have to buy and how little car I’d need to drive to be able to arrive at the trailhead in compliance with this arguably restrictive rule.

To be “reasonable,” I wanted to see if it could be done without having to drive a total beater so I went shopping for a pretty expensive bike. I’m sure I’ll get emails from some of you with links to examples of more expensive options but here’s one that I think is pretty pricy. It’s a Specialized S-Works Stumpjumber EVO and it rings in at a cool $11,000. I had my bike.

But what about the car? If you read my Brief a couple weeks ago you know that I’m a Honda Accord guy. So here’s the question: What type of Honda Accord could I drive if I owned one of the more expensive bikes around and still stay within the bounds of Rule #25. Drumroll please. Turns out I could drive a 2013 Accord LX with 157,359 miles on it. It’s total price $10,995  (let’s hope the roof liner isn’t sagging yet.) Ok, I could handle that. After all, it would be an upgrade since the 2013 Accord is 5 years newer than my 08 Accord! It’s the perfect plan. I get to buy a brand new $11,000 mountain bike and upgrade my Accord all in the name of adhering to Rule #25. Crystal’s gonna love it!

In reality, Crystal wouldn’t love it (more on that next time) and besides that, I would never buy an $11,000 bike. Nor would I make a car or bike buying decision based on a list of humorous but over the top cycling etiquette. Even if I did buy a super expensive bike and, for some strange reason, felt I needed to comply with Rule #25, I still wouldn’t upgrade my Accord at this point. Why not? In my family, we have lots of things competing for our dollars. We want to be able to give generously while also being able to save enough to retire someday, help our kids pay for college, pay down our mortgage, go on family adventures together, etc, etc. A few weeks ago I wrote about how there’s only “a dollar-in-a-dollar”. Another way of saying that is you can’t spend the same dollar twice. Therefore, a dollar spent on a new car can’t also be spent all the other things that are important to my family and me. Don’t get me wrong, I love that new car smell as much as anybody, it’s just that I have other things I’d rather spend my money on.

Ok, enough preaching. The decision to wait to buy a new car was relatively easy for me. As I mentioned in my last Brief, I’m not a car guy. And, to be honest, my family and I don’t always make perfectly practical or altruistic spending decisions. In fact, this spring, I really did buy a new mountain bike. Not the $11,000 gem I mentioned above but a less tricked out version of the same bike for $3,600. That’s still a lot of money for a bike, but my decision to keep my Accord allowed me to feel comfortable spending a bit more money on something that has already brought me more joy than any car ever will.

At Beacon, we’re not in the business of telling people how to spend their money (although we often talk about ways that intentional spending can increase happiness.) We are in the business of offering meaningful advice so our clients can have more freedom and confidence to spend their money on things that are important to them. Of course, we hope that it’s on things that bring peace, joy and freedom to their lives and to the lives of others.

Oh, and in case you were wondering…

2008 Honda Accord trade in value according to Kelly Blue Book – $3,693

Specialized Stumpjumper Comp mountain bike price – $3,500

I’m pretty darn close to accomplishing my “goal!”

As always, let us know if we can help.

 

 

Geoff Hall, CFP®
[email protected]

My wife, Crystal, and I have been married for nine years and have two kids, Cooper (7) and Rhodes (5.) When I’m not spending time with them you might find me downtown serving at our church, pushing my limits during a mountain bike ride or having coffee with a friend in the Five Points area. I've been practicing wealth management for 25 years and I'm thankful for the privilege of shepherding my family of clients through the ups and down of the markets and of life for that matter.