Corolla Time

The following is a guest post from William at DropDeadMoney.com

Dave walked into work one morning, dropped his keys and sunglasses on the desk, and slumped into his seat with a huge sigh.  “Dang! What am I going to do about this ticket?” Dave was a gentle soul and this is the foulest language I ever heard from him.

This was serious. He worked for me right after the turn of the century (you know, the one in our lifetime) and he got a ticket for driving on bald tires on the way to work that morning.

I knew the reason he got the ticket. He had worried aloud a few times in the preceding weeks that he couldn’t afford new tires for his Lincoln Navigator, to which he had added flashy rims when he bought it. The car looked really great, but those rims meant the tires were several hundred dollars. Each. To replace them all would be well north of a thousand dollars. Money he just didn’t have.

lifestyle inflation

Just a fancy car…

Dave and his wife owned a huge mansion in one of the tony suburbs of South Orange County. We’re talking like 5,000 square feet for two people kind of mansion. They bought it in the early days of the dot com boom, when they each had a job paying six figures, so they figured they could buy anything. And they did.

But we all know what happened to the dot com thing. Dave and his wife both lost their lucrative positions and had to take what jobs they could, at significantly lower pay scales. Which is why Dave found himself working for me as a staff accountant.

With their incomes cut by more than half, they were behind in their mortgage payments, and falling behind further every month. Every nickel they had went into the house, and it didn’t seem like it made any difference.

That is why he kept putting off getting new tires… and why he got the ticket.

An hour later, he still sat there, staring at a blank computer screen. Figuring he wasn’t going to get anything done that day, I suggested we go downstairs and get a cup of coffee.

It was a tough exchange. I already knew the story from prior conversations, and I really felt for the guy. But what could I say? I told him to sell everything and scale down. What else? Of course, they would lose their shirts because they would be selling low after buying high. After talking through the gut wrench it would take to do that, we eventually made our way back to the office.

The following week Dave and his wife went for it and sold the house and both (nice) cars.

A few weeks later he arrived at work and took me down to the parking garage to show me something. It was his new car: a used Corolla. It cost him only a little more than those tires would have!

But here’s what I remember most: the huge smile on his face as he showed me that simple little car. I asked him about it, because that reaction is definitely not what I would have expected. Didn’t he kinda feel down after trading his fancy Navigator for the humble little Corolla?

“Oh no,” he said, “I traded a millstone for freedom!”

I never forgot that.

We All Do “Corolla Time”

And as I thought about Dave’s situation some more, it struck me that in the long run, we’re all going to do “Corolla time,” one way or the other. Let’s be honest, we all like to drive a nice car. But oftentimes we become impatient. Rather than save up for it while driving a humble little beater, we go into debt to get that nice set of wheels. But debt is a presumption on the future, which (as we know) is promised to no-one.

Sometimes it’s not just impatience, it’s peer pressure. When all the others arrive in their shiny Beemers and Benzes at a party or wherever, we don’t want to pull up in a beater.

Dave didn’t either. And that’s why he got the Navigator. But here’s the funny thing: after this little episode, Dave had to arrive at those parties with his little Corolla. It didn’t matter what others thought — he had no choice.

Dave didn’t realize he could do “Corolla time” by choice on the way up, or involuntarily on the way down. He was going to do Corolla time either way; his only choice was when.

It’s the same for all of us. We can do our Corolla time while we’re saving up to do things right (i.e. not with debt). Or we can do it when we’re humiliated in a recession and forced to sell everything at a loss. Because there is always a recession. That’s a given. We just never know exactly when.

So you have a choice. When do you want to do your Corolla time?

17 Responses to Corolla Time

  1. Paul Roberts says:

    Great Post William. Candid talk is what we all need sometimes and your friend needed a dose of it. We’ve been having our own “Corolla” moments these past three years. Being frugal is working though. We are almost debt free now and living within our much smaller incomes.

  2. It was “Tercel Time” for me, and proud of it. Great post!

  3. Great post. We’ve chosen to do it on the way up. We’d much rather drive or have something more modest in order to enable us to put more money away. I think it’s much easier to have choices and pick what I want now as opposed to living way out of our means and end up with no choices later in life.

  4. My wife and I both drive beaters, but they’ve become part of the family. Nice cars really baffle me, though i would like to own one someday. I mean, why spend that much money on something that you beat up everyday? It’s like gold-plating a shovel.

  5. I agree, but my wife was tested a few weeks ago. A friend bought a Lincoln MKX with all the doodads and after my wife took a ride in it I had to wipe the drool off her face when she came home. Several times.

    And I guess that’s really the point, isn’t it? Security in the future requires us to say no to things in the short term that are nice (let’s be honest about that) but not necessary.

  6. Fiona Prince says:

    Great post, William. I actually had a Corolla in high school and my first two years of University.

    The way I feel about cars is if they get me from A to B without stalling that’s all I need. I drive a 2005 SmartCar now, but…

    My Corolla fell off the front axles on a tight turn one day and I sent it to the wrecking yard. I bought a 1957 VWBug for $250 to help my friend fly home to Toronto at Christmas time. I sold that car two years later for $150 (it needed a new floor and seats!) Next, a 1966 VWBug to help a friend move; followed by a Ventura my sister gave me with serious hail damaged (dimpled by Calgary’s golf-ball sized hail and written off by insurance). I traded that car in for $100 after a couple of years and got a new Sprint in 1987. I bought a home in 1992, sold that car and started walking and taking the bus to save on fuel costs.

    The SmartCar I drive now costs me approximately $23 to fill the tank.

  7. I understand why people want sexy cars but I went with my civic instead. Should be a great car for the next 8 or more year! I am doing my time now with hopes I can get ahead of the game or at least stay on pace to relax a bit later.

  8. When I was ready for my first car, my dad casually told me that what smart people do is to make sure that each car they own is just a little bit nicer than the last one. Being an early 20s “strategic genius,” I immediately reasoned that I should scrape the bottom of the barrel with my first car, in order to ensure plenty of room for future improvement. In other words – I took the bait. My “Corolla” was a well-aged Mercury Capri, which I nicknamed the “Crappi.” 35 years and several cars later, each successive car has been an upgrade, while total automotive expense has been a declining percentage. Thanks, dad!

  9. t.o. girl says:

    Why do you have to do ‘Corolla time’ on the way up or on the way down? Why not do it ALL THE TIME?

    PS-I can think of many cars that are more embarrassing to drive than a Corolla…

  10. Jamie says:

    Cars are a tricky cost. It is hard to find balance between expense and value. I think nice cars can be good if you buy them new and you do not ever trade them in. The longer you drive a car the better investment they become.

  11. I like the guy’s reaction. This story is great, William. Thanks for sharing!

  12. Slackerjo says:

    I am just shocked that your friend took your advice.

  13. So I actually own a Toyota Echo, which is a step DOWN from a Corolla. But I love it! I don’t know how much I’ll upgrade even later in life.

    Now is definitely our metaphorical Corolla time and I’m glad to have it at the beginning of our professional life.

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