Dear Financial Samurai,
This was a particularly difficult week for me due to stubborn car issues. Imagine taking your car to two auto mechanics, spending $1,900 to fix an oxygen sensor, replace an oil gasket, and install a new auxiliary battery, only to still see a “Low Battery” warning. Now imagine going back to the first mechanic who installed a new main battery in Q1 2024, having them replace it under warranty, and the “Low Battery” light still comes on even after a 70 minute highway drive.
Out of this frustration, I felt compelled to make some lemonade and write a new post, Overcoming Hopelessness When Life Feels Impossible. My hope is to help those of you who have experienced bouts of hopelessness as well, while also helping myself climb out of a psychological funk.
What’s interesting to note is the fewer than expected number of readers who shared situations in which they felt financially hopeless. That provides another piece of anecdotal evidence that many of you are doing quite well. And if you are doing well, given the sample set, I continue to feel good about buying the dip, which I did again last week.
I’m now on day eight of cold starts after replacing my main battery and resetting the Battery Management System (BMS). Seven out of eight mornings, when starting my car after it’s been off overnight, I’ve seen the “Low battery, please start engine” warning. Supposedly, however, it can take between 10 and 14 cold starts for the BMS to fully relearn that a new battery has been installed.
At this point, it feels like I’m playing the lottery every morning, just hoping the warning message finally goes away. On the bright side, I learned that a car doesn’t simply shut down on the highway due to a weak battery. Once the engine is running, the alternator takes over, which is a relief.
Be Careful With FIRE
Not being able to fix a problem after spending both money and time stinks. But as I thought more deeply about my situation, I realized my biggest fear wasn’t the car itself. It was the prospect of having to spend even more money.
While some people feel excited to have an excuse to buy a new car once it turns 10 years old, I dread it.
I dread feeling foolish ponying up $50,000 for the cheapest car I’d actually want that still fits our family of four. And I would feel even worse spending $115,000 YOLOing into a new Range Rover Sport, even though a part of me really wants to.
I’m not sure how so many Americans convince themselves to spend that much money on a depreciating asset. If you don’t pay cash, you’re looking at $600 to $1,500 a month in car payments even after putting $8,000 to $13,000 down.
If I still had a job and tremendous cash flow, maybe I wouldn’t feel so bad. But I don’t. And that’s why, for those of you who want to retire early and live free, I urge caution. I’m 100% certain you will one day face an uncomfortable cash crunch that puts your financial habits to the test.
One of the biggest risks is putting your financial future in jeopardy by co mingling funds. See: Investment Gains Shouldn’t Cancel Out Cash Flow Problems.
The Way Around Cash Flow Problems
If you do say goodbye to your day job, you may occasionally need to sell Treasury bonds to pay for life. That’s exactly what I did, to the tune of about $110,000, to cover a surprise $20,000 capital call, property taxes, and to buy stocks when the market dipped in November.
What I didn’t fully think through at the time, however, were the tax implications of selling Treasury bonds. To help you better plan before doing the same, it’s worth reading this post: Selling Treasury Bonds Is Easy, But Consider The Tax Implications.
Another Fed Rate Cut
The stock market is currently treading water after another Fed rate cut to 3.5 to 3.75 percent. Your credit card interest rate should see a slight decline, though that’s largely irrelevant since I know none of you carry revolving credit card debt. Meanwhile, the 10 year bond yield jumped back up to 4.2 percent from 4.1 percent, pushing mortgage rates higher once again.
Although the market currently expects only one rate cut in 2026, I suspect there will be at least two given how much the labor market is weakening. Ironically, a weaker labor market makes me more constructive on stocks because it tends to boost liquidity. At this point, I wouldn’t mind the market taking another breather so I can rebuild my cash and invest at lower prices starting in 2026.
A Fun Video About Money And Children
Finally, I agreed to be interviewed by Business Insider on a topic that’s very close to my heart: saving money while raising a family, and the financial lessons we can teach our children.
The full interview lasted about one hour and forty minutes and was ultimately edited down to roughly five minutes alongside two other families. Although I wasn’t paid and it took an afternoon of my time, I felt it was important to share what I could about the immense financial responsibility parents take on. Children will test everything to the max.
I was also surprised by the overwhelming number of positive comments. YouTube is often filled with negativity around financial topics, so the response was especially refreshing after the bummer of a week I’d had. If you enjoyed the video, feel free to leave some positivity as well.
To your financial freedom,
Sam
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