Lessons from The Two Million Dollar Car

One of the first things we did after “winning the stock option lottery” was to exercise some of those options, sell some of the resulting stock, and then invest some of the proceeds and spend the rest.

I think we invested more than we spent. (I know we lost more than we spent, since this was also just before the stock market crash of 1987, but that’s a story for another day.)

One of the things we spent money on was a new car for my wife. It was sorely needed, her previous car having been nearly totaled the year before.

Naturally we were in a position to get a “nice” car, and we did. This was 1987, and the car, a new Pontiac Bonneville, cost something like $20,000. To the car’s credit, and to my wife’s, it lasted nearly 10 years, so we feel like we truly got our moneys worth out of it.

Or did we?

Consider: $20,000 of company stock, adjusted for all the growth in the company’s stock price since then would today be worth over $2,000,000.

Two. Million. Dollars.

Sometimes hindsight sucks.

And that’s really part of the point of this essay.

Hindsight is great, when you can learn from it. But if you use it to fill your life with “oh, we should have done X”, when there was no way to know at the time that X was the thing to do, you’ll just drive yourself nuts.

Perhaps $2,000,000 worth of nuts.

In reality, there was no way we could have predicted what was going to happen to our company’s stock over the next 20 years. In fact it could just as easily have gone the other way. So, we hedged our bets. But we did it what we hoped would be a sensible fashion.

We spent some. We saved some.

We grew wealthy anyway.

Perhaps not as wealthy as we could have been, had we been able to predict the future, but wealthy enough.

And in the mean time, my wife had a very good car that lasted her for a long time. And loans got paid off. Yes, perhaps a few toys were purchased. And some philanthropy was enabled.

So what are you doing?

Are you avoiding your wealth for fear of purchasing what’ll turn out to be a two million dollar car?

Are you spending right and left because you don’t think it’ll last?

Or are you somewhere in-between?

Think about it.

I believe strongly that there is value in the here-and-now, just as there is value in preparing for the future. The trick, of course, is balance.

In hindsight, I don’t regret our decisions. Even after having done the math.

5 thoughts on “Lessons from The Two Million Dollar Car”

  1. At any moment in time when faced with a decision to buy something, (usually expensive) people have to decide if they would rather have the money or the thing. By purchasing the Bonneville, you decided you needed/wanted the car. You could have bought a Mercedes thereby reducing your money more substantially, or a smaller, cheaper car, you probably picked right in the middle.

  2. I, too, found this site through Randy Cassingham’s This is True.

    While I’ve lost enough in my life so as to probably never be rich, I still know the value of money; I understand that paying $30,000 for a car means not having a lot more money a few years later. I always consider the future value of money in my purchases, and I happily find nice $3,000 cars that last me a few years.

  3. Another True subscriber here 😉
    Hindsight on the ‘would-be’ value of something had we made other choices can be painful if you just look at the stark figures.
    However, is that all there is ?
    The way I look upon these things is sort of like this – imaginary conversation with self:
    Me: Oh men, look at that, if I wouldn’t have sold those 15K worth of options 12 years ago, they would now be worth 800K !
    Other me: yeah, so ?
    Me: that’s a loss of 785K !?!?!
    Other me: is it really ? why did you sell them back then ?
    Me: to buy a car
    Other me: ok, so how long did you have that car ?
    Me: ten years
    Other me: did you enjoy having that car ?
    Me: oh hell yeah ! I made such fantastic trips in it. I went to x in it and to y. My grandma who died 7 years ago even drove in it at some point. And don’t forget: it’s the car I had when I got together with A. And remember that dent I got when I…. ? And the time my friend’s kid got all sick in it ? and the time when I spend the night on the hood of that car with A just watching the stars ?
    Men, if that car could have talked it would have some tales to tell !
    Other me: so you enjoyed having it then ?
    Me: I sure did !
    Other me: if you would have to put a value to the experiences you had with that car, the joy it brought into your life, what would that value be ?
    Me: I couldn’t, the experiences I had are invaluable, I wouldn’t have wanted to miss them for the world.
    Other me: and when you bought it, did you consider other – maybe cheaper – cars ? did you consider other financing options ?
    Me: of course I did, I thought it all through at the time and at that point in my life, selling those options and buying this car was all together a good choice which is why I did it.
    Other me: so, at the time it was the best choice and having that car brought you experiences which you find invaluable, so why are you whining ?
    Me: was I whining ?
    Other me: eh.. yes you were
    Me: nah, just thinking of what could have been, but I’m way to happy with the choices I made to have any regrets at all !
    And that’s normally where it ends 😉
    (unless I didn’t think well about the choices at the time and then the other me just goes like: ‘well, you should have, no use whining now if you didn’t think things through at the time. Hope you enjoyed the choice you made even so !’)

  4. I’m like Juliette (both in being a TRUE subscriber and in my attitude): I think things through at length with hindsight but without regrets. Where I really surprise myself, however, is when I start telling myself “Actually, that was the wrong decision given the facts I had available to me, but hindsight shows that it was for the best.” That happens far more than it really should.

  5. I also found this site through This is True. It’s always interesting to look back and see how things could have been done differently and learn from past successes and mistakes. New cars are generally not a good place to put money IMHO. I find it better to save up a few grand and buy a good used car than to touch any investments to buy one. Especially since new cars go down in value so quickly.
    Being an accidental millionaire is an interesting concept but I plan to be a very intentional millionaire 🙂 Through paying attention to my money, not going into debt and investing wisely.

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