The Path to Early Retirement: Cars and Bikes
AAA estimates that it costs 60 cents to drive a midsize sedan for a mile. That's not just accounting for gas, but maintenance, insurance and all manner of upkeep -- even non-essentials. When you look at it that way, it makes you think twice before driving across town to the grocery store. If you live in an area with high traffic, you can tack on a few more cents to every mile. If we assume an average annual driving distance of 15,000 miles, you can total the annual cost of owning and operating a car at $9,000.
Maybe you're made of money, but I'm not. $9,000 is no mean sum. That's just about exactly as much as the average American paid for health care in 2012. That's about as much as it costs to go to an American public college for a whole year. Clearly, it's a lot of money. And for the typical car owner, it's money that is thrown away without thinking twice about it. Because you have to have a car. Right?
Well, nobody tells me what I have to do. A year ago, I stopped driving very much at all. My used 23-year-old Jeep was on its last legs. I wasn't going to pay for its high cost of maintenance. So when it died, I sold it for scrap and bought a bicycle instead. Now, let's compare the cost of riding a bike to the cost of driving a car. Some sources estimate that the cost of a good bicycle, accessories, and maintenance will set you back about 5 to 15 cents a mile. When I think of how much healthier I am as a result of riding a bicycle, I think this has to be cutting down on future medical costs, making bike-riding either free or possibly even profitable. Who has to have a car now?
I know some of you have a commute. But consider the alternative. By finding a job closer to your house (or working from home), you can sell your car or drive it a lot less. By relying entirely on a bicycle and public transportation, you will save approximately $90,000 over 10 years. That's more than my house costs me during that same amount of time, folks. It's numbers like these that made me seriously reconsider my gas-guzzler. Simply giving up my car and traveling on two wheels isn't going to be enough to allow me an early retirement. But it's the kind of habit which is going to help. I'm going to be writing a series of the ways I'm cutting down in certain areas to beef up savings, investments and all-around frugality. In the end, it'll give me something resembling early retirement. And I hope you can join me there.