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If you have read the book: "The Millionaire Next Door", you may remember the terms: PAW and UAW. A PAW is a prodigious accumulator of wealth. The UAW is an under accumulator of wealth.
An easy way to determine if your neighbors are PAW's or UAW's is to simply look in their driveway to see if they drive an SUV.
Sports Utilities Vehicles cost more every step of the way. The initial purchase is very expensive. They often cost tens of thousands more than cars.
They get terrible gas mileage, so their monthly gasoline cost is astronomical. Their annual insurance premiums are also a lot more expensive than cars. Their complex 4 wheel drive systems add to vehicle weight and contribute to poor gas mileage and high maintenance costs. Their transmissions are huge and complex, and cost twice as much as a car's transmission to rebuild. Their huge tires are very expensive to replace.
Every part on an SUV is expensive to repair/replace, because everything part needs to be bigger and stronger than a regular car. What I'm trying to get at is that anyone who owns an SUV does not care about frugality. This means the rest of their life is likely to be a life of consumption. And although their salary is high, their wealth is low.
On the other hand, the neighbors who own older 4 Cylinder Japanese cars like Toyota Corolla/Camry are likely to be very frugal. These cars have the best reliability ratings in Consumer Reports. Their life expectancy is often 150,000 to 200,000 miles. Their frugal 4 cylinder engines get excellent gas mileage. They were probably purchased from a private seller from a newspaper when they were 3 years old or older. This way, the frugal buyer of the used car let the consumption based consumer of the new car suffer all of the depreciation losses.
By simply looking at your neighbors car, you can determine if your neighbor is an Under Accumulator of Wealth.
What do you think?
editor's note: just to avoid hard feelings let me make it clear that we believe that SUVs do have a place for some families. For them it's the most affordable way to carry lots of people or cargo. But, I think that we'd all have to agree, that some people who own SUVs could make do with a less expensive alternative. So maybe the test we'd use is to look in your neighbor's driveway and ask how often do they use the extra capabilities of an SUV. If the answer is 'not often' then perhaps they are an UAW.
My Story is a regular feature of The Dollar Stretcher. If you have a story to share please send it to gary@stretcher.com with "My Story" as the subject. You don't need to be a writer. Just someone who's learned about saving money and is willing to share the information with others.
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