Opinion: The road to riches is this simple: Drive a crappy car

Buying new cars is like taking $40,000 and setting it on fire.

I was unhappily scrolling through Facebook the other day and saw that one of my smart friends had posted a dumb article about the excellent Toronto Raptors basketball player who, despite making nearly a hundred million dollars, still drives a 20-year-old beater SUV.

He said of the car: “It runs … and it’s paid off.”

The second part of that statement is crucial. There is nothing better than a paid-off car. There is no monthly payment, and most of the depreciation has already occurred. You are driving for free.

I have to say that even I am not as disciplined as Kawhi Leonard. I had my last car for seven years and about 135,000 miles when I started getting a hankering for new-car smell.

Anyway, Leonard’s level of frugality is seldom seen in the NBA — or anywhere in professional sports, for that matter.

I had a friend of a friend who played college hoops and made it to the NBA. He said that the players would buy a new suit for every day they were on the road. Forty-one road games, 41 suits.

They would wear them once, and never wear them again. Given the size of the basketball players, these were bespoke suits and not off the rack. Conservatively, that’s about $100,000 worth of suits. A year. And so it goes.

The Genius of Warren Buffett in 23 Quotes

One of my favorite ways to learn is to remember pithy quotations that wrap a lot of wisdom into relatively few words. Nobody does that better than Warren Buffett.

In some of my favorite quotes, Buffett preaches patience, simplicity, index funds, and understanding the difference between what you know and what you don't. He's in favor of being smart, and against being dumb.

I'll give you some examples, followed by my own comments.

Since this article is about learning, let's start with this:

"What we learn from history is that people don't learn from history." When investors get either too fearful or too greedy, they sometimes hide behind the notion that "This time it's different." Usually they regret it.

On fear and greed

"Two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. ... We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." This is the simple recipe for being a contrarian investor.

How To Use Pocket Money To Teach Your Kids To Be Money-Smart

Teaching your kids about the value and importance of money from a young age may encourage a healthy relationship with their finances when they are adults — and this can start with pocket money.

"As soon as children start wanting or asking for things such as special toys, parents can teach them the idea that they need to have money to pay for it, and that this money doesn't grow on trees," said head of consumer education at FNB Eunice Sibiya.

She is of the opinion that as soon as children understand basic maths principles, normally in the early grades, you can start teaching them about money. This is because one needs basic maths principles to understand the concept of saving and spending.

Some parents and financial advisers agree that you should start as soon as they are able to count — around the age of five or six.