We didn’t all love math when we were 15, but most of us probably liked buying stuff.
In a comment Wednesday evening on our post about how much money bikes can save a city, reader Gutterbunnybikes shared a story about helping his teenage son understand how big a difference bikes can make to one’s personal finances.
Funny you say this, but the average income in Portland is around 45k a year. Lifetime earning potential of 1.8 million dollars. If the automobile was eliminated from your budget, you’d save roughly 400k over your life time. Which puts you 800 k over your car driving friends – if you do nothing else but ride the bike..
If you invested the money that would normally go towards automobile expenses every month and got a 4% average interest rate (Many AAA bonds give you this much, it could be much more money if you invested it more aggressively), you’d have almost another million dollars added to your lifetime earnings.
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Sorry I’d get more specific, but I’ve done this same post about a dozen times (I should just make a cut/paste doc. on it). All the numbers are based on AAA yearly automobile cost estimates -not perfect I know but it’s a base, and the automobile costs are assumed to remain the same for 40 years which doesn’t happen (it goes up every year and will probably top 10k this year).
And yes I’m aware there are ways to make driving less expensive, the first being never ever buying a new car and avoiding financing the purchase.
I ran these numbers as my son was turning 15 about a year ago to show him how what seems to be relatively small decisions like driving can have on your long term well being. Needless to say he seemed pretty shocked that driving for him is potentially a million dollar decision, and now nearly a year later and he’s yet to show any interest in a trip to the DMV.
I’ve been a cheapskate as long as I can remember, but it was actually a college professor who told me once, in an email of advice for happy young-adult life, that one of his most satisfying financial decisions had been to avoid car ownership as long as possible. Thank goodness that stuck with me, or I might never have discovered all the other ways that low-car living could enhance my life, too.
Thanks for reading.
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And this estimate doesn’t even take into account the savings from your improved health from biking.
And from a public health standpoint, given the new article from the WSJ reporting a reported cost of $2 TRILLION globally from the obesity epidemic (http://blogs.wsj.com/economics/2014/11/19/obesity-epidemic-costing-world-2-trillion-a-year-study-says/), you’d think the US would be throwing money at bike/ped infrastructure hand-over-fist!
Not to mention the costs of continued carbon emissions.
Has anyone else noticed the recent uptick in CAR ads flashing around here on bikeportland? I thought this was something we fault the Oregonian for…!
try clearing your personal computer cache. I have a huge influx of shutterfly ads because I use chrome and am logged in. Chrome does personalized ad experience. (I also apparently use shutterfly alot. I admit nothing!!)
I think we must be talking about slightly different things. I’m talking about animated banner ads that scroll and change and exhort me to consider this or that car or car-related flim-flam on the bikeportland site.
I’ve noticed them!
9watts, I have started displaying Google ads in spaces that we don’t have sold to individual advertisers. It’s a way for us to make a little revenue until we fill the spaces with the types of advertisements you’re more used to seeing around here.
I don’t love the Google ads either, but it’s a business decision. If they continue to annoy you and others (and me), I will turn them off.
As for the car-related ads specifically… I should be able to selectively turn ads off from car manufacturers in my Google Adsense settings. I’ll look into that. I’ve done it before with a few brands and I’ll see what I can do.
Remember, this is a business, and advertising is how we survive. I hope you understand.
Of course, I fully understand the role that ads play in keeping bikeportland’s team fed and clothed. No quibble at all. It was the fact that they were, you know, cheesy car ads that seemed incongruous. I don’t know or understand the algorithms behind them so figured I’d ask.
Thank you very much for your reply.
9watts, those banner ads are re-targeted specifically for you, they are targeted based on your habits online i.e. what websites you visit frequently, articles you read etc…
You can opt out by hovering over the top right of the banner where it says “adchoice” click on that banner (not the X) and you can set your personal settings for what you want to see or click on the “X” on ads you do not want to see and eventually you will only see ads that you have not X-out.
“are re-targeted specifically for you, ”
haha. Right. Dick Hannah Jeep?
My only car-related searches, pretty much since the internet began, have had to do with the end of the automobile and fuel economy studies. Someone needs to update their algorithms.
…Or perhaps there’s nothing to sell based on those two search categories so they default to something more lucrative?
Jonathan, if we “opt out” of the Google ads, does that impact your revenue from the ads? This question relates to other beloved ad-supported sites as well.
No, you’ll still see ads just not ones that are targeted based on you personally. Your IP gets dumped into a general classification based on age, race, sex etc which is why 9watts is probably seeing a lot of car ads because they have the most money to target blindly at the general classified web users.
if you want to support Jonathan by getting him paid from those banners then click on them every chance you get (when they are ads you would have any interest in)
They pay more based on “clicks”
Probably the smartest thing I ever accidentally did was not buying my first car till I was 35. I had no clear math to back me up, just the feeling that I couldn’t afford one of those things. While not the only contributor to my financial well-being, it was certainly a major one. Thanks to Gutterbunny, I’ve got the math now!
I think this is great, and that getting into cycling as an automobile alternative is an excellent way to save money. But… I have to say that my personal experience has been more of a mixed bag.
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After starting out as a penny pinching commuter, I got bit by the racing bug, the mountain biking bug, and the gravel-grinding bug. So, I’ve ended up plowing some thousands of dollars into bikes for these applications. Along the way, I bought a car, too, because how else can I get to those awesome trails out in the mountains? So now I pay insurance all the time and drive places occasionally.
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Also, I’ve had several crashes on training rides: some spills on slick surfaces, and a few more serious collisions with other vehicles. Even though those collisions weren’t my fault, and several insurance companies have paid for a lot of my medical treatment, I’ve spent a lot of money over the years to restore myself back to as much health as possible. I have great cardio-pulmonary health, and troublesome back, shoulder, and neck pains.
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In conclusion: those Kaiser Permanente ads about how cycling is good for your health are true in a general, public-health sense, but can become very *untrue* for an individual in one split second. The same goes for personal finances. By all means, give up the car! I just recommend doing so with clear eyes.
Funny that: after I broke my arm this year, all the kaiser permanente health care professionals (esp. Orthopedics) told me I was crazy to ride a bicycle – anywhere. Of course, this was at the Sunnyside crack-of-my-ass location. I also heard from them that many of the N. Portland KP orthopedics dept. are cyclists. Shows you the cycling attitude and divide even within KP across metro care providers.
I have such a hard time: 1) driving somewhere to bike; 2) paying someone to bike in their event. It’s just me…
Health care professionals – especially orthopods – have a very skewed perception of the world. Nobody goes to an orthopod to have their improved overall fitness confirmed!
Injuries can be expensive and debilitating either way. Personally, I’ve had more negative impact to my life from injuries sustained while driving than I have from injuries sustained while cycling.
an anecdote does not a statistic make. i’ve crashed at speed over a dozen times without significant impact on my long-term health, my finances, or my ability to bike for transport.
So you counter an argument against an n=1 with an n=1?
The point remains that crash-related health costs can be a significant factor on the financial bottom line of cycling (and the titanium rod in my collarbone would agree).
“So you counter an argument against an n=1 with an n=1?”
My argument was that anecdotes are irrelevant.
Mentioning the risk of trauma from cycling is only relevant if one considers the risk associated with other transportation modes. I would not be surprised to learn than cycling for transportation in PDX reduces the risk of medical trauma from a collision (for the average commuter).
“what a big difference bikes can make in ones personal finance…”
Umm yeah….
In high school I worked every summer…. to get money for bikes and parts. 20 years later, I am still spending obscene amounts of money on my fleet of bikes. I couldnt be happier…. (buy my wife probably could)…..
We became car free just as the Great Recession was beginning. Although fortuitous, it really was a coincidence. However, being unemployed for a bit (a couple of years later) without having a car made it MUCH easier to cope. Math doesn’t lie: being car free is awesome.
I will point out that living in places suited to cycling, walking and transit can cost more than places where things are difficult without a car. That may offset some of the million-dollar savings.
So true (esp. in this city).
I just read this story to my boys (age 9 & 11) to reinforce their funding of Pokemon & Magic cards. I’m car-free as is their mom so this just drives (ha punny) the point home even more.
Before we condemned the kid to a chump change job, one should read “Grinding it Out” by Ray Kroc. Mr. Kroc didn’t plan to go into the restaurant business when he did he open a few, you might have heard of them. Mc Donald’s
So…for any bike blog nerds out there. Did anyone notice that Johnathan’s lead in picture is Tim (and Daughter) of the blog Carfreedays! Subtle, but well played for an article about being car free!
This guy has a great breakdown of the financial advantages over time of cycling vs. driving:
http://www.mrmoneymustache.com/2011/04/18/get-rich-with-bikes/
Wealth is the ratio of what you have to what you need and want.
I sold my car in 1990 because I could no longer afford to repair or insure it. Not owning a car was not a way to keep more money in my wallet; on the contrary, it was a response to the fact that my wages could not keep pace with the cost of owning a car. They still don’t. Today, I earn just barely enough to pay my bills WITHOUT owning a car. And I would guess tht this is the case for many who live car-free.
The economic paradigm has shifted and more people than ever simply cannot afford to own a car today. So the idea that one is saving money by selling the car is a little inaccurate; to save money, you have tp be earning that much in the first place. And that is just not the story anymore for a lot of Portlanders.