Don’t be DUMB…
I will be the first to admit it. I have 100% got behind the wheel of a car when I shouldn’t have. Guilty as charged. No, I have never been caught by the police. That doesn’t mean that I didn’t make one of the DUMBEST mistakes one could make. It just means I didn’t have to answer to anybody about it. Looking back at my younger and dumber days, some of the decisions I made still make me wonder how I got so lucky to be in the position I am in.
I am 25 and Amber is 24. We are 100% debt free, invest 35% of our income into our retirement investment accounts, and are well on our way towards financial freedom. This all could have been taken away and set us back years if I was pulled over one of those nights. As I got closer to graduating from college and began my job search, I started to get my s*** together. Gone were the days of being reckless with my life (and potentially others) by jeopardizing myself by getting behind the wheel after drinking. Amber also influenced this by presenting some relationship ultimatums if I were to ever do this again. I got the message LOUD AND CLEAR…
DUI’S cost how much???
Besides the disappointing/awkward/embarrassing cloud that hangs over your head when you get a DUI, did you have any idea that they can absolutely consume your wallet? I have had family members and friends get DUI’s, and I know how much of a pain it caused them in terms of messing up their daily routines. What I didn’t fully grasp at the time is how many types of fees that are attached with a DUI charge. Some of the fees include:
- Minimum Fines
- Penalty Assessments
- State Restitution
- Alcohol Abuse Education
- Blood Breath Testing Fee
- Jail Cite and Release Fee
- Driving Alcohol School
- License Reissue Fee
- Attorney Fee
- Auto Insurance Increase
That list isn’t even including if you got into an accident and caused any serious damage to your car, yourself, or heaven forbid another person!
Using my state (Virginia) as an example, here is how much a DUI could cost:
- Minimum Fines: $250
- Penalty Assessments: $600
- State Restitution: $1,000
- Alcohol Abuse Education: $50
- Blood Breath Testing Fee: $37
- Jail Cite and Release Fee: $10
- Driving Alcohol School: $375
- License Reissue Fee: $160
- Attorney Fee: $2,500
- Auto Insurance Increase: $1,800 – $6,000
This adds up to a total of anywhere from $6,782 – $10,982. OUCH…That hurts my stomach too. Not only is that cloud hanging over you, but you are essentially taking out an auto loan for a used car with those numbers.
Okay COOL…But how did you get that number in your title?
Good question, and I am happy to hear that you read long enough to ask! My favorite subject in personal finance is breaking down compound interest, and how that alone can be used to make anybody wealthy. Compound Interest is essentially interest earned on your money. Over the years as your money continues to earn interest, that interest then earns interest. In even more simple terms, compound interest is your money making money for you.
***If you are still confused or want to know more about compound interest, feel free to shoot me a message through my contact page!
I am going to break down that big number in my title through a small scenario using Ben the Brilliant Investor.
Ben the Brilliant Investor
Ben (25 years old) gets invited to a company New Year’s Eve party. On the invitation it says open bar (WOOOHOO!) and catered 5 star food (more WOOOHOO). Ben knows that he has to drive 20 minutes to the party and has to drive back home. Now Ben has a choice to make (No Uber/Taxi/Hotel in this scenario)…Does he go to the party and drink, or does he go to the party and instead enjoy all the food and company? Did I mention that Ben is a brilliant investor? Ben already understands the power of compound interest AND knows how much a DUI could cost him ($6,782 – $10,982).
This was an easy decision for Ben. He said “no” to the drinking and went to the party and chowed down instead. Not only did he go stuff his face, but he made a brilliant investment that night. Instead of wasting that $10,982 (Yes he had the cash for it) in potential DUI costs, he invested that money into a simple Vanguard Total Stock Market Index Fund. He bought that index fund within a tax-sheltered retirement account (Roth IRA) where it grows tax-free AND withdraws are tax-free. He also knows that he can’t touch that money until he is 59 ½ years old, but he is fine with this because he wants his money to compound over the next 35 years.
I know I haven’t gone over any type of investments yet in my blog, so don’t feel bad if you’re lost on what an Index Fund is. My coming blog posts are going to break down investing, index funds, Roth IRA’s and much more very soon!
Ben did his research and knows that the Vanguard Total Stock Market Index Fund has returned it’s investors around 9.5% annually since it was initially created in 1992. Now to the good stuff…THE MONEY!!! Want to see the beautiful effect of compound interest? Below I have created a table that displays how compound interest works on a $10,982 investment that grows 9.5% annually over 35 years:
|Age||Initial $10,982 Investment|
There you have it. Your potential $263,000 mistake is now your PROFIT!
In all seriousness, I wish everyone a Happy New Year. Go out and have a good time with your friends and family and celebrate everything you have accomplished this year! Be smart about where you go and what you do. Don’t get behind the wheel of a car if you’ve been drinking and start 2018 on a bad note. Take Ben the Brilliant Investors advice and be SMART. Who knows…You could make a fortune off of it!