Earning NT $50, 000 a M o n t han d S t i l l T ak in g a C a r L o an ? T h e B r u t a l T r u t h A b o u t L os in g N T$ 5 Million in 10 Years

You are standing at the door of a car dealership, looking at the import car you have been dreaming of for three years. The salesman is smiling, his calculator is clicking fast, and he says ‘Monthly payment of NT $25, 000— y o u c ana f f or d i t . O na N T$ 50,000 salary you still have NT$25,000 left to spend.’ That seems doable, right? You stare at the numbers on the contract, fingers trembling — not from fear, but from excitement. The image flashing in your head is driving the new car back to your hometown, parking it in front of the house, neighbors casting envious looks, and finally being able to hold your head up at the class reunion.

But I’m going to tell you a bloody truth right now: the moment you sign that loan contract, your fate of earning NT$5 million less over the next 10 years is already sealed. You think you are buying a car? Wrong — you are buying a black hole that bleeds you every single day. You think you are rewarding yourself for your hard work? Wrong — you are personally signing the death sentence of your own future financial freedom.

Dealership showrooms are always brightly lit, always scented, always staffed with pretty salespeople handing you coffee — because they need to create a dreamlike atmosphere that makes you lose your mind inside that space. They will not tell you that the car drops 20% in value the moment it drives off the lot, they will not calculate that in 10 years the car will only be worth 15% of what you paid, and they will definitely not tell you that if you had invested the NT $1.5 mi l l i o n y o uu se df or t h e l o an, in 10 y e a r s i tw o u l d ha v e b eco m e N T$ 5 million or even NT$7 million.

The Real 5-Year Account for a NT$1.5 Million Import Car

Suppose you take out a NT $1.5 mi l l i o n l o an t o d a y t o b u y anim p or t c a r, w i t ha 4$ 27,600 (the salesman quoted NT $25, 000, b u tt h e a c t u a l 5 - y e a r am or t i z e d p r in c i p a l an d in t er es t i sc l oser t o N T$ 27,600). After 5 years you have paid a total of NT $1.656 mi l l i o n — N T$ 156,000 more in interest than the principal.

Alright, the car loan is paid off, you think you own the car, right? **Wrong. This car will only be worth about NT $600, 000 in 5 y e a r s . * * Y o u s p e n tN T$ 1.656 million on something that is now worth NT $600, 000— N T$ 1.05 million has evaporated.

But the story isn’t over. Here are the hidden costs you have to pay every year for those 5 years:

License tax, fuel tax, and insurance (at least NT $40, 000/ y e a r f or anim p or t c a r) : * * N T$ 200,000 over 5 years**
Parking (if you live in Taipei City, conservatively NT $3, 000/ m o n t h) : * * N T$ 180,000 over 5 years**
Fuel (estimate NT $5, 000/ m o n t h) : * * N T$ 300,000 over 5 years**
Maintenance (import cars are more expensive, estimate NT $30, 000/ y e a r) : * * N T$ 150,000 over 5 years**

Do the math now: NT $1.65 mi l l i o nin c a r l o an p a y m e n t s, pl u s N T$ 830,000 in ownership costs, you spent a total of NT $2.48 mi l l i o n o v er 5 y e a r so na d e p r ec ia t in g a sse t n o w w or t h N T$ 600,000 — a net loss of NT$1.88 million.

But That’s Not Even the Scariest Part

The scariest part is opportunity cost. If you had not bought the car over those 5 years, and instead had invested NT $35, 000 am o n t h t h r o ug h D C A in t o ana sse t e a r nin g 8$ 2.55 million**. Add the NT $300, 000 d o w n p a y m e n t y o u w o u l d ha v e u se d (t h eor i g ina l v i d eos t a t es N T$ 300,000, and we adopt the video’s number), and you have NT $2.85 mi l l i o n t o t a l . T h e n y o uu sec a s h t o b u y a 5 - y e a r - o l d u se d c a r f or N T$ 600,000, and you still have NT$2.25 million in cash left.

But if you had taken out the car loan 5 years ago, all you have now is a car worth NT $600, 000 an d n o t hin g e l se . * * T h e g a p b e tw ee n t h e tw oc h o i ces i s N T$ 2.25 million.** And that is only 5 years.

Let’s stretch the time horizon to 10 years — this number will keep you up at night. Suppose that 5 years in you want to switch cars because the first one is 5 years old, so you take out another NT $1.5 mi l l i o n l o an t o b u y an e w c a r, an d t h es am ecy c l er e p e a t s . O v er 10 y e a r s, y o u ha v es p e n t c l ose t o * * N T$ 5 million** on cars, but the only asset in your hands is a 10-year-old used car worth maybe NT$300,000–400,000.

But if you had invested NT $35, 000 am o n t h f or 10 y e a r s a t 8$ 6.38 million**. After spending NT $600, 000 t o b u y a c a r w i t h c a s h, y o u w o u l d s t i l l ha v e * * N T$ 5.78 million in assets**. Same 10 years, one choice leaves you with a beat-up car, the other gives you nearly NT $6 mi l l i o nina sse t s . * * T h e d i f f er e n ce i s N T$ 5.38 million TWD.**

The Poor Buy a Liability, the Rich Buy an Asset

You absolutely need to understand this sentence. A liability is something that takes money out of your pocket; an asset is something that puts money into your pocket. A car requires monthly loan payments, insurance, fuel, maintenance, and parking. Every single month it is taking money out of your pocket, and its value is dropping every day — that is the textbook definition of a liability.

But why do the rich have cars too? Because the timing and method the rich use to buy cars is completely different. The rich first build assets, and let the cash flow generated by those assets support the liability of the car. The rich’s sequence is: first invest in real estate to collect rent, stocks to receive dividends, businesses to earn profits, and only when the passive income generated by these assets each month is enough to cover all of the car’s expenses, they buy a car — and they buy it with cash generated by assets, not with loans. This way, the car is just a consumer good to them and does not affect their wealth accumulation.

But the poor? The poor use future labor income to take out car loans, and use their salary each month to feed a depreciating liability. The result is that they never save money, never start investing, and spin forever in the cycle of poverty.

The Three Underlying Rules That Decide Whether You Are Rich or Poor

The First: The Depreciation Trap

Everything that depreciates is a wealth black hole, and cars are among the fastest-depreciating consumer goods. A new car drops 10%–20% in value the moment it drives out of the showroom — 20% in year one, 15% in year two, 10% in year three, 8% in year four, 7% in year five. After 5 years, a NT $1.5 mi l l i o n c a r i s w or t h N T$ 600,000, a depreciation rate of 60%. This means that while you sleep, this car is burning your money. If you buy a NT $1.5 mi l l i o n c a r t o d a y, ina y e a r i t i so n l y w or t h N T$ 1.2 million — you have lost NT $300, 000 w i t h o u t d o in g an y t hin g . I f t ha tN T$ 300,000 had been invested at 8% annualized return, after 10 years it would have become NT $640, 000. * * T h e f i r s t y e a r^{'} s d e p r ec ia t i o na l o n ecos t sy o u N T$ 340,000 in future earnings.** And depreciation is irreversible — a car only becomes less valuable over time, it cannot appreciate.

The Second: Opportunity Cost

This is the most important concept in every financial decision. Opportunity cost means: when you choose to do A, you give up the benefits you could have gotten from B. When you choose to take out a car loan, what you pay is not just the loan and ownership costs — you pay all the returns you could have earned by investing that money. I just showed you: NT $35, 000 am o n t hin v es t e d o v er 10 y e a r s a t 8$ 6.38 million — this NT$6.38 million is the opportunity cost of buying a car.

You might say 8% returns aren’t that easy. I’ll tell you: the Taiwan Weighted Index has had a 7.5% annualized return over the past 30 years, and the U.S. S&P 500 has had a 10.5% annualized return over the past 30 years. As long as you DCA into broad-market ETFs and don’t trade in and out, hitting 8% over the long term is not hard at all. But if you put the money into a car, your return is negative 60% (because the car is worth only 40% of the purchase price after 5 years). You choose to pay 60% in returns and give up positive 8% — that is why the poor can never escape. The rich think in opportunity cost every day; the poor never know it exists in their entire lives.

The Third: The Cash Flow Trap

This rule comes from the book Rich Dad Poor Dad, but most people finish the book without knowing how to apply it. Cash flow is the money that actually flows into and out of your pocket every month. You earn NT $50, 000 am o n t h — t ha t i sc a s h f l o w co min g in . Y o u p a y N T$ 25,000 a month for the car loan and NT $10, 000 in c a r o w n er s hi p cos t s, a t o t a l o f N T$ 35,000 flowing out. Your net cash flow is NT$15,000, which has to cover rent, utilities, phone, food, and transportation — you simply cannot save.

But if you don’t buy the car, you can save NT $30, 000 am o n t h . Y o u in v es tN T$ 20,000 through DCA and keep NT$10,000 as a living reserve, and your financial structure is healthy. More importantly, once you accumulate a meaningful investment position, those investments start generating dividends, interest, and rent — these are passive income, money that flows in without you working. When your passive income can cover your liability expenses, you have reached financial freedom.

The Two Choices at Age 25 That Decide Your Fate at Age 45

Suppose you are 25 years old, earning NT$50,000 a month.

Choice A: You take out a car loan, pay NT $35, 000 am o n t h t os u pp or tt h ec a r, an d l i v eo n t h er e mainin g N T$ 15,000 — unable to save. You live like this for 10 years.
Choice B: You don’t buy a car, save NT$30,000 a month to invest, at 8% annualized return. You live like this for 10 years.

At age 35:

The You of Choice A: Has a 10-year-old car worth about NT$300,000, and zero other assets.
The You of Choice B: Has an investment portfolio of NT $5.5 mi l l i o n * * . T ha tN T$ 5.5 million generates 8% a year — NT $440, 000— or N T$ 36,000 a month in passive income. You use that NT $36, 000, a l l oc a t in g N T$ 24,000 to cover the new car loan, NT $14, 000 f or f u e l, main t e nan ce, an d in s u r an ce, * * y o u r N T$ 5.5 million principal is untouched and continues to grow.

Another 10 years later you are 45. If that NT $5.5 mi l l i o n co n t in u es t o g r o w a t 8$ 11.87 million**, generating NT $950, 000 a y e a r in p a ss i v e in co m e — c l ose t o N T$ 80,000 a month. At this point you can not only easily afford the car, you can also use part of the passive income for travel, continuing education, supporting your parents — your quality of life is completely different.

But the You of Choice A at 45? Still paying off a car loan, may have switched cars and taken another loan in between, savings still zero, every month still handing over the salary to feed the car — no way out. Same 20 years, one choice gives you financial freedom at 45, the other leaves you as a car slave at 45. That is the brutal truth of compound interest and opportunity cost.

4 Non-Negotiable Iron Rules

Your passive income must cover the car’s ownership costs: If supporting a car costs you NT $15, 000 am o n t h, y o u r p a ss i v e in co m e f r o m d i v i d e n d s, r e n t, an d in t er es t m u s t b e a tl e a s tN T$ 15,000 before you have any business buying a car. If your passive income is zero, you should not buy a car, because you are using future labor income to feed a depreciating liability.
Your emergency fund must hold at least 6 months of living expenses: Before buying a car you need to have 6 months of living expenses saved as an emergency fund. This money exists to handle sudden situations like job loss, illness, or family emergencies. If you don’t even have an emergency fund and you take out a car loan, and you lose your job and cannot make the payments, the car gets repossessed, your credit is destroyed, and your life is over.
Your total debt cannot exceed 3 times your annual income: If your annual income is NT $600, 000, y o u r t o t a l d e b t — in c l u d in g c a r l o an s, p er so na l l o an s, an d cr e d i t c a r dd e b t — c ann o t e x cee d N T$ 1.8 million combined. If buying a car pushes your total debt past this ratio, your financial structure has already collapsed.
Your car budget cannot exceed half your annual income: If your annual income is NT $600, 000, y o u r c a r b u d g e t c ann o t e x cee d N T$ 300,000, and ideally you pay in cash, not on loan. If you earn NT $600, 000 a y e a r an d w an tt o t ak eo u t a l o an f or a N T$ 1.5 million car, that is financial suicide.

I know at this point some of you will say: ‘I get the logic, but I just want a car, I don’t want to squeeze onto the MRT and buses every day — what should I do?’

First, if you live in Taipei and commute by MRT every day, your monthly transport is NT $2, 000, pl u s an occ a s i o na l t a x i or r e n t a l c a r o n w ee k e n d s — t o t a l t r an s p or t a r o u n d N T$ 5,000 a month. But supporting a car costs you at least NT $15, 000 am o n t hj u s t in p a r k in g, f u e l, an d in s u r an ce, pl u s N T$ 25,000 in loan payments — you are spending an extra NT $35, 000 am o n t h f or co n v e ni e n ce . I s t ha t co n v e ni e n ce w or t hi t ? * * I f p u b l i c t r an s p or tw h er ey o u l i v e i s in co n v e ni e n t, co n s i d er a scoo t er or e l ec t r i cscoo t er in s t e a d * * — an e l ec t r i cscoo t er cos t s N T$ 100,000, a few hundred a month in electricity, a few thousand a year in insurance, NT$1,000 a month for parking. The total cost is one-tenth of a car, but the commute is no worse than a car.

Second, how many times a year do you really need to drive the whole family out? 10 times? 20 times? Fine, NT $2, 000 p er r e n t a l, 20 t im es i s N T$ 40,000, but supporting a car for a year costs you more than NT $150, 000. * * Y o u a r es p e n d in g an e x t r a N T$ 110,000 for 20 uses a year — is that rational?**

Third, and this is the most toxic trap of all: you feel cool driving a loan-financed import car to the class reunion, but can you sleep at night looking at the number in your savings account? The real status symbol is hitting your first million in 10 years, starting to live off investment income, and never having to look at your boss’s face again — that is the real status symbol.

Disclaimer: The car loan calculations, opportunity cost figures, and investment returns described in this article are scenario simulations provided for conceptual illustration only. Actual car loan rates, ownership costs, and depreciation rates vary by car model, brand, region, and loan terms. Historical investment returns are no guarantee of future performance. For major financial decisions, please make a comprehensive assessment based on your own income, assets, and family situation, and consult a licensed financial advisor when necessary.

Earning NT$50,000 a Month and Still Taking a Car Loan? The Brutal Truth About Losing NT$5 Million in 10 Years

Earning NT $50, 000 a M o n t han d S t i l l T ak in g a C a r L o an ? T h e B r u t a l T r u t h A b o u t L os in g N T$ 5 Million in 10 Years

The Real 5-Year Account for a NT$1.5 Million Import Car

But That’s Not Even the Scariest Part

The Poor Buy a Liability, the Rich Buy an Asset

The Three Underlying Rules That Decide Whether You Are Rich or Poor

The Two Choices at Age 25 That Decide Your Fate at Age 45

4 Non-Negotiable Iron Rules

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