When I first migrated to the USA, I contemplated buying a Tesla. We wanted an SUV. Too bad that a Tesla Model X is still way more expensive, about 2x the price of a Jaguar F-Pace, Volvo XC90, BMW X5, and similar SUV. So we ended up not getting a Tesla first. I thought maybe I would get one when we upgrade later.
But who knows? We then moved to Taipei. When my wife asked me what could be the one thing I missed? It is about not owning a Tesla.
Early this year, during our vacation in Hawaii, I deliberately rented a new Model Y. Therefore, I got to drive it as if it was my car for seven days there. From that experience, I learned a lot about electric vehicles. And here, let me share my experience, my biggest epiphany, and how it relates to our personal finances.
How Tesla is different from other cars I have driven
Cars are just vehicles. It carries us from one place to another, from point A to point B. That’s it!
I always refrain from buying expensive cars. And I hope you are having the same mindset and not spending your fortune on vehicles.
Over the years, I have owned pretty basic cars, like the dinosaur Datsun 120Y, up to some decent cars like a Harrier, a Subaru Forester, a Ford Mustang convertible, and a hybrid Volvo XC90. But when I drove a Tesla, it was totally different.
Here is what I realised only after I drove it for an extended time:
- My iPhone acts as a car key after installing the Tesla app. This is way better than the usual key fob since we take our phones everywhere nowadays. So I didn’t have to bring an additional car key.
- Since the car has no engine to turn on, the push-start button is obsolete. Once I got into the Tesla, there was one less thing to do so I could drive almost instantly. When I got out, I didn’t even need to shift the gear to “P”. Open the door and walk away. Furthermore, I don’t even need to wait for other passengers to get out because the car will lock automatically when nobody is in there.
- Whenever I passed by a petrol station, I said “goodbye gas station”. However, I still need to charge the car. It was a little inconvenient when there were no chargers at our Airbnb parking lot.
- And there are many other great features such as autopilot, fast acceleration, low maintenance, etc.
To sum up the experience, I would say that it is like the first time you are using a smartphone. It is pretty similar to the occasion when I first used the iPhone — “OMG! Where are all the buttons?”
The lesson I learnt here is that driving a Tesla gives me a whole new experience I’ve never had with other cars. Now I can “see” why Elon Musk’s fans are so gung-ho for Tesla and think it will change the world. Electric vehicles are here to stay and soon will absolutely replace the conventional ICE (Internal Combustion Engine) vehicles, similar to how engines had replaced horses in the past.
I bought Tesla shares when It was $58.91 (split-adjusted)
I was long ago wowed by Tesla. But the company didn’t make any profit for a long time. When it does, the PE (Price per earning ratio) was always at the stratospheric level that is hard for me to stomach.
Nonetheless, instead of buying the car, I purchased the shares. When I bought it at about $59 split-adjusted, I didn’t buy a lot due to the super-high valuation. What happened next is history now. The stocks become a 15-bagger within 3 years. Now the market cap is bigger than all the other car makers in the world, combined.
I recall the time Apple first introduced the iPhone back in 2007. I went through a lot of trouble buying the first generation iPhone through eBay because it was unavailable in Malaysia. Imagine that if I had gone through the trouble to buy Apple company shares instead, it would have been 30 baggers now.
So I learnt my lesson then that when we love a product, we should consider the company’s stocks as an investment.
However, for the case of Tesla, I don’t have a very high conviction to go all in. So I only invest with the “fun money”. Even if I make 15 folds, the amount doesn’t move the needle. I was very rational that I was just betting on Elon Musk successfully pulling it off. That was pure speculation. And I was just lucky, striking the lottery.
The key lesson here is that speculation is really different from investing. If I thought I could have a similar result speculating my way to make my next millions, I could have lost a lot of money investing in stocks like Nikola and Theranos. And I would probably bet on many other cryptocurrencies and NFTs too. But to me, that is not investing. I don’t rely on speculation and luck in wealth accumulation and hope to strike a lottery.
Luxury Car Owners Not Necessarily Live a Comfortable Lifestyle
After staying in the USA for a few years and now residing in Taipei, I observed a huge difference in city design. In the US, the cities are mainly designed for cars. Commuting is the most convenient only when you drive. America has eight parking spaces for every car. You find highways with 10 lanes or more, without tolls. That’s why they call it “freeways”!
On the other side of the world, a small island like Taiwan designs the cities differently. I find it so convenient walking around, riding MRTs, trains, buses, etc. If I could summarise bluntly, Taiwan builds cities for humans. In contrast, the US makes the cities for vehicles, if you know what I mean.
When we returned the Tesla, left Hawaii and flew back to Taipei, did I consider buying a Tesla next? Frankly, I wouldn’t even consider purchasing any car yet. I feel very comfortable living in the city centre now. Everything I need and want is within walking distance. If you’ve visited Taipei before, you will know what I am talking about. Currently, a comfortable lifestyle, in my definition, doesn’t include a luxury car.
The key lesson I learnt here is about the concept of owning versus having. To have the experience of driving a Tesla, I don’t need to own one. I could rent a Tesla, like how I did it during my Hawaii trip. I enjoy a vacation next to the beach. However, I don’t need my own vacation home on an island. I could conveniently stay at countless Airbnb offers. If you love watching a movie, you don’t have to spend a fortune to set up a surround home theatre. You can always buy an affordable movie ticket.
Therefore, next time you consider purchasing a big-ticket item, ask yourself if you really want to own it? You might get better value for your money by renting one, having the experience, rather than purchasing one.