Yahoo Finance FIFO worker reveals common $70,000 mistake that’s left him without a house
The former tradie said this common purchase is “simply not worth it”.
A FIFO worker is warning young tradies and other FIFO workers against making the same costly mistake he did.
Brodie White, who previously worked as a tradie and currently works in the mines in Western Australia, has explained the one piece of advice he wished he could give his younger self.
“Do not f**king buy a ute on finance for goodness sake,” the 26-year-old said in a video posted online.
“I’ve spent roughly $70,000 in the last three years on ute payments and accessories for my ute.”
Do you have a story to share? Contact tamika.seeto@yahooinc.com
In the comments, White explained he bought a Toyota Hilux for around $52,000 and had spent a “good chunk” doing it up. While he “loved” the ute, he said it was “simply not worth it”.
“That same $70,000 could have bought me one or even two investment properties,” he said. “Now, a few years have gone by, if I were to sell my ute I’d probably only get $50,000 for it out of my $70,000 investment.”
RELATED
FIFO worker earning $3.5k a week reveals why he still sleeps in his car
Tradies reveal huge wages as expert tells Aussies this is how to ‘retire by 50’
Tradie earning $1,200 a week living pay to pay: 'Not worth it'
While White said it was “tempting” to buy a flashy new ute, he urged others to “do yourself a favour and get a house first”.
The miner added the purchase had ultimately set him back four or five years on his property-buying journey.
‘Very easy to get caught up’
Financial adviser Helen Baker said it was understandable FIFO workers earning high salaries would want to buy flashy new things.
“They’ve got a surplus of income, they do have a lot of money to burn so it is very easy to get caught up in the extravagant things - like [cars], jet skis and boats,” Baker told Yahoo Finance.
Baker said the biggest risk of buying a car on finance was that it was a depreciating asset - meaning it declines in value over time.
“You’re paying for [the car], then you’re paying interest payments on top of it. So, you’re paying way more than what it was originally worth but it is also a depreciating asset,” Baker said.
“So, if and when you have to sell it, it is going to be worth way less than what you originally paid for it and what you paid back in interest repayments.”
If you need to buy a car for your work, Baker said it was important to ask: “Do you really need the flashiest and most expensive?”
“If interest rates continue to rise, or things change around employment or politically, you could be left high and dry and with a big debt to pay off and no assets to go with it,” she said.
Baker agreed with White that it would have been a better idea to borrow money for “good debt”, like buying a property or something else that would grow in capital value or provide an income stream - something cars don’t do.
“Interest rates are so high right now so you’re paying back a significant amount of money,” she said. “Another alternative is instead putting money into superannuation and getting a tax deduction for it and growing his wealth in a tax-effective environment as well.”
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to our free daily newsletter.
