Do Rich People Take a Loan to Buy a Car?

Do Rich People Take a Loan to Buy a Car?

Many people think that Rich drive expensive cars. They drive in luxurious cars. But well, this is not true. In reality, these are the Upper Middle class people who fuel their lifestyles with Debt. Whenever, they get a pay raise, they go for Car Leasing / Car Finance Option and buy a new car to look cool and rich.

In reality, these are not the true rich and wealthy people. These are just the High Income / Low Wealth Accumulator people. These are the people who just want to look cool and rich. And that’s why whenever their income rises, they simply go for Car Finance option and buy new car.

True Rich people are those who never take a loan/lease/borrow to buy a New Car.

So Does it mean that, True Rich people don’t drive expensive cars? Well, Nope. This is also not true. They also love to drive expensive cars but they never borrow money. So How they buy a car without borrowing money? Well, they first accumulate wealth. First of all they accumulate assets out of their money. They focus on growing the Asset Column of their Financial Statement first. And when the Asset column of their financial statement grows sufficiently and start throwing Passive Income, they buy a Car from that Money. But Rich never take a loan to Buy a Car.

Some very smart Rich People do another thing. They take a loan to buy a car. They go for Car leasing option but what they do? They do such an arrangement that, their Passive Income from Assets pays those Car Loan EMIs.

Say for Example, one of my friend has recently bought a car. What he did? Well, he just bought a Rental Commercial Property in good locality and out it on the rent. This property generates Rs.1 Lakh of monthly Rental Income for him which is purely a Passive Income. To generate this Income, he does not have to work hard. So he taken a Car loan and now his Passive Income from Rental Property pays his EMIs.

Now, what the Upper Middle Class people do? Well, They pay those Car Loan Payments from their monthly Paychecks. So they have to work hard so that they don’t loose their job. These are the people who pay Car Loan EMIs from their hard earned money. This is the basic difference between Rich and upper middle class.