Car Loan vs Index Fund

If you finance a car every five years at $395/mo, you’re always carrying a debt and never getting ahead.

If you took $395/mo and invested it in a low-fee index fund (with an average return of 8%) the account would grow to:

  • 10 years: $72,263
  • 20 years: $232,662
  • 30 years: $588,691

Financing a car prevents wealth, but investing creates it; because (compound) interest is either working for you or against you.