I Lost $40,000 in a Month and Learned a Valuable Lesson

Most of the junk we buy that we think will make us happy is a liability.

Tim Denning
Jan 3 · 6 min read

Some of the best lessons are learned by losing money, not making money. When we lose money, we finally begin to understand how it can work for us and also against us.

A study conducted a few years ago found that only one in three millennials are investing in the stock market and about 61% of them haven’t done so because they are scared.

I have felt this same pain many times in my life. Every guru and their dog wants to tell you about the stock market, or bitcoin, or multi-level marketing, or property investing as though you are stupid for not having got involved already.

Losing $40,000 changed my perspective on money. It happened when the joys of business made me buy a luxury car as a status symbol for the results I had obtained in life. I bought the car and then at one stage needed to sell it because my income changed drastically and the repayments were sky-high.

Upon starting the process of selling the car, it became obvious that I overpaid for it. Then when I managed to get a buyer, the amount of money I got for the car was far less than I owed on the loan and many headaches with the car right before the sale led to me losing even more money. By the end of it all, I was down $40,000

But strangely, I don’t regret it. Why? The reason is because the process of losing so much money taught me a few valuable lessons. Here they are.

You’d think owning a luxury car would make you look good. More people will want to do business with you; your ideal partner might find you more attractive; more people might want to be around you because of what you have accomplished.

There are so many fantasies about what money can buy you and how that will make your life better. The truth is money doesn’t make you look good.

What makes you look good is the sort of person you have become in life. Society is inspired by people, not the nonsense chunks of metal they own or the house they can afford.

When I lost $40,000 in a luxury car and ended up with no car, the shallow people disappeared and the real people stuck around. Eventually, I was given a very old car from a relative and while it didn’t impress people, it didn’t matter.

People still read my writing despite my car. People still wanted to work with me despite my car. And the shallow girls that wanted to date me for money exited my life, and the real women who cared about so much more became visible.

The contract for the car had many hidden bombs.

One of them was a high rate of interest. My credit history at the time of purchase was non-existent so this was compensated for by charging me more than 20% interest, although the detail was broken up and beautifully hidden in the tightly interwoven legal sentences of the contract.

Upon the sale of the car, there was a balloon to pay. (A balloon payment is a lump sum of money you pay at the end of the contract and it’s how your monthly repayments can look really cheap when they are actually just delayed until the end. Before you know it, you’re looking for tens of thousands of dollars on top of what the car is worth to get rid of it.)

It pays to read contracts carefully. Since this event occurred, I have got myself a good lawyer who reads anything for me that I don’t understand.

The dream purchase you make almost always has a maintenance cost.

Owning a luxury car cost me more than the repayments. Each service was thousands of dollars and required the manufacturer of the car to complete the maintenance so that the onboard computer could be accessed.

These hidden costs occurred frequently and over the time I had the car, many extra services were needed to address bugs and unknown problems. Then, right before I sold the car everything went wrong as though it was a sign of the lesson that needed to be learned.

First, the sunroof broke. Then the electric mirrors had issues. Finally, several parts of the engine cracked from extreme heat even though it was winter. The last service bill was more than $5000 to fix all these issues so that the car was roadworthy and could be transferred to the new owner.

During the time I owned this stupid chunk of metal called a car, my stress was at an all-time high. I was battling mental illness and trying to move away from the magical world of startups.

The car added to my stress because people wanted to damage it. After parking the car at the supermarket and disappearing for ten minutes, I came back to the car to find it was keyed all the way around. It cost more than $10,000 to fix the car because of the odd paint selection which was luckily covered mostly by insurance (with me paying a high excess for the privilege).

From that day forward, parking became an issue. There was the constant stress of thinking it might happen again. And it did.

More people opened their doors on the new paint job and scratched it further. Then the bumper was damaged, exiting a driveway because of how low the car was and the silly body kit I insisted on installing to boost my ego.

Everywhere the car went became stressful. Would it break down and cost money? Would another person damage it? What if the rims got gutter scrapped?

Owning a luxury car was nothing but a headache. The joy of the open road was taken away by the stress caused by a chunk of metal that continuously needed money to keep it going and protect it from harm.

The car was a child and I was its estranged daddy.


In simple terms, assets put money in your pocket and liabilities take money out. Clothing, luxury items, the home you own, and the latest technology all take money out of your pocket.

The luxury car I was stupid enough to buy was a liability. All it did for the entire time I owned it was taking money away from me. After selling the car and losing $40,000, I began to learn to invest and the power of owning assets over liabilities. When I recovered from losing the $40,000 and got back on my feet, one of the areas I put the savings from the car into was assets like stocks.

These stocks have gone up in value and paid me a dividend, unlike the liability that was the car that only ever went down in value as the car got older and had an increased maintenance cost over time.

If you buy a liability that takes money out of your pocket, ask yourself, “Is it worth it?”

Invest In Yourself

Other than buying assets, the area of my life I spent the most money in was investing in myself.

Instead of oil changes, I bought tickets to seminars that taught me life skills. Instead of sunroof repairs, I bought books from people who had achieved similar goals to me.

Instead of upgrading cars every few years, I upgraded and rewired my brain consistently and spent money on anything that could help me do this. Here are some examples:

  • A new pillow to sleep better
  • A software tool to edit my writing
  • Organic food to give my brain fuel to think
  • A gym membership to help me release endorphins and get in shape
  • A dating app subscription to find my ideal romantic partner

The money from my money pit luxury car went into areas of my life that actually made me happy, rather than promised to make me happy and then left a hole in my pocket.

Losing $40,000 on a luxury car was a fantastic mistake and it’s one you don’t have to make yourself.

Spend your hard-earned money in areas of your life that help you grow as a person and leave the promises of the advertising world and the dreams of material possessions alone if you can.

No one cares how you look or what you own; they care about who you are as a person and that comes from investing in yourself.

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Tim Denning

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