All Articles Entrepreneurship

Car Culture of America

Experiencing The Car Culture In Phoenix, AZ

I’ve been here in Phoenix, Arizona for the past few days, representing the car culture of America with pride. It’s a beautiful State with stunning scenery, clean air, and wide open planes. The people are in the top 5 friendliest group of people I have interacted with if I can so generalize.

The car culture in Phoenix and the surrounding cities is an epidemic. The weather certainly doesn’t lend itself well to being a bipedal and the vast empty spaces between civilization make a car that much more necessary.


Thank God For Uber

With this much open space and streets as wide as a river, it blows my mind that there is no functional public transportation. It would seem obvious to put down some rails and help cut back on traffic and get people less dependent on their cars.

Where is the public transportation?

Well, it would make sense if the State had its civilization’s well-being in mind. Then again, spending stimulates an economy, not in the long-term but in the short-term – the amount of term that a politician stays in office.

But after getting to this giant strip mall early in the day, before customers started arriving, I got a chance to take a look at the cars that the employees were driving.

It was a sea of cars. Nice ones, very few were older than 5-7 years, and I know my cars. Mustang’s, Audi’s, SUV’s, F150’s, Camaro’s. These are the cars of the supposed minimum-wage earners.


Learning More About Uber

I have been really fortunate to get around by way of Uber. It’s been a while since I’ve used it but the app has come a long way. I have met wonderful drivers and have had awesome conversations about the Uber business model, the compensation of the drivers etc.

I could have rented a car for around $280 for this trip but I would rather spend the money on a sharing-based service. Uber gets to keep 25% of my ride cost and the driver gets to put their car to good use.

There are all sorts of numbers out there regarding the hourly take-home for an Uby. It’s somewhere around $2-10/hour. One guy broke it down for me really nicely, focusing on how important it is to do the taxes correctly.


The Auto Debt Crisis In America

Brand new Camaro’s, Mustang’s, large SUV’s and trucks with no visible wear of the truck-body or truck-bed. These are the vehicles of the minimum-wage workers, the assistant managers, and managers parked in the strip mall parking lot.

I try to not criticize the individuals for owning such cars. I have absolutely no insight into their lifestyle, their dreams, their aspirations, nor their stresses. My ideas and posts address the popular sentiments.

Yet, simple choices that can be made in a matter of minutes, followed by a few signatures, can have lasting consequences. And when one is dealing with financial wiggle room of $100-150/month, a vehicle can be the pinhole in the balloon.


US Households & Automobiles

There are approximately 120 million households in the USA.

There is a $1 trillion auto debt balance as of this writing in the US (2017). Or $10k per household.

The average US household earns $50k/year.

The problem is that a lot of subprime debt is being issued in the auto industry. Also, consumers are using their credit card balances more and more to purchase cars. Remember the last time the media got its teeth into subprime debt?…

With 0% interest and 0-down financing/leases, the auto industry is setting itself up for what the housing industry experienced in 2008.


The Camaro Phenomenon

The average Camaro owner is a male, owns a home and has a household income of $70k. Remember, the average US household income is $50k/year which means that $70k/year isn’t all that much.

A Camaro starts at around $25k, which means a monthly car payment of $455. With rates still quite low, ~3%, people are flocking to the new-car market.

My example of the Camaro is only to demonstrate what cars have become in the US. They are serving as the status symbols that the automakers intended.

There is a massive difference between a person who spends 2x their salary on their car when they earn $300k/year than the person who spends the same ratio but earns only $50k/year.

Yet, the financial industry is riddled with ratios and percentages. Taken out of context, these values become incredible sales techniques and mislead the public.

Fuck the rules and fuck the ratios. There is no way to responsibly claim that a person should save 80% of their working income for retirement spending. There is no logical way to say that it’s okay for a household to spend 20-30% of their income on housing.


Debt Balances Are Increasing

Take a look at this chart below. Notice how the US household debt balance is creeping up quite steeply ever since 2010-2011.

Also notice, in 2008 most debt balances started dropping off. Probably due to being written off or families realizing that carrying debt is detrimental due to potential future layoffs.

All the talk now is about upcoming layoffs. I am not sure how to comment on that. It’s one of those doomsday prophecies, no doubt. However, there is a lot of truth to it, too.

Our economy has been due for a correction, an overhaul or recharacterization – whatever you want to call it.

The next wave of layoffs won’t be replaced with beating hearts but with circuit boards and hydraulic arms. That will make economic recovery harder and will make debt an even bigger problem.


Obesity And The Car Culture

Walking from my hotel to the strip mall was quite scary. I stepped on pavement that likely hasn’t felt the soles of a shoe in a long time. I passed in front of cars which didn’t know how to react to a slow-moving hunk of flesh.

No doubt, the heat and the vast empty spaces between destination makes Phoenix a tough place to live without a car. In regards to biking as means of transportation, that would be suicide in a city where drivers aren’t used to bicyclist out and about.

As with poverty, obesity is combated a few tiny calories at a time and not the caloric windfalls expended on a treadmill, a handful of times a month.

It’s the walking to your destination, venturing around your neighborhood, braving the stairs, cleaning your floors with a rag, using hand tools instead of electronic gadgetry in the kitchen and yard.

Banks and financial advisors bless the $1.99 incremental spending which lands them their broke customers. Sadly, I too, get to enjoy a mind-blowing salary because of caloric choices my patients make.

In the restaurant, it’s the sauce on that pathetically tiny salad and the creamer in the coffee that tilts the scale. Out on the streets, it’s taking the car for the 2-mile trip or parking lip-to-tit close to the Walmart entrance.


Doctors & Cars

The average US household supposedly spends $750/month on cars. Remember, cars break down and require gasoline. They must be registered and insurance is now mandatory in order to operate a vehicle.

The more expensive the car is, the more costly its insurance, registration, and maintenance. Brake jobs and transmission rebuilds cost more. Cosmetic replacement, too, will cost more on the fancy cars.

We docs do love our fancy cars. Even my ghetto ass loves to see a beautiful Chevelle with a 6 layer paint job flying down the road, sitting on after-market suspension.

However, it isn’t the all-metal muscle cars from the 60’s that doctors love, but the fancy imports. These cars are now the staple in the hospital basement parking lots.

Cars, laptops, and furniture are probably the best examples to give when trying to explain depreciation. Some cars depreciate much faster than others.

One of the best decisions a physician household can make is to research the best cars to buy used. There is a massive list of such cars. These are vehicles that can be bought cash for an affordable sum, have great safety records, lend themselves well to having their parts rebuilt and will maintain their cost-effective operation.

The ratio of automobile expense to income in a physician household is often way skewed compared to their wealthier counterparts. Few successful entrepreneurs who clear $300k a year will spend their hard-earned money on $120k big-bodies.


Splitting The Difference With Uber & Our Cars

I don’t own a car, going on 2 years. It’s not easy, fuck no! If I do ever own one again, I would do what my buddy V. does with her car. I would park it most days of the month and use it for longer distances.

To prevent the seals from drying out and the battery from draining, I would rent it out on Turo and use it to make a little side-cash on Uber or Lyft.


Dear Industrial Age,

Thank you for your awesome technological advances. Holy shit, I had no idea I could have my anus heated by my car. A thermostat that syncs with my phone, unreal! I am amazed by every little new thing that my next generation phone can accomplish.

But seriously, let’s both admit that you’ve sort of run out of tricks. I know you’ll help make things cheaper and faster at an exponential rate. 

But I think it’s time that I get a clue. I know you can make new jumbo jets every 13 months. But listen, I am realizing that my ass no longer fits between the 2 arm rests on my 777 airline seat.

I have run out of people, groups, and governments to blame for my obesity. So, I think I’ll start with my car and use it for really long distances. Maybe I’ll even move my home closer to work. 

I’m gonna forgo the app that lets me find my car in a sea of other cars, all parked in the giant gym parking lot. Instead, I’ll bike there or fuck, maybe I won’t even go to the gym, I’ll just walk there – by the time I get there I’ll have gotten all the exercise I need.

And you know, that calorie measuring thing on my wrist… I dunno, maybe it’s broken but the most calories I spent recently was when I had to walk my ass out of the car 4x just to find the store that carried the exact model I was looking for. 

2 replies on “Car Culture of America”

Paying respects to AZ! It’s madness here dude. 5million people reside in the Valley. We are almost as big as Boston. It’s a great place to earn an income due to low cost of living (unless you buy too much house like my ass) and low taxes. I see a small mountain town in my future. Colorado or Park City, Utah come to mind. Great seeing you dude.

PS- I can’t afford your fee to read your entire blog. Cutting back dude!

I just had a great discussion with a colleague about the option of moving to a lower cost town.
The issues remains that physicians often will move to more affluent neighborhoods in any city.
Moving to a new city, growing roots, building up a social network, renting/buying and furnishing a new place can eat into a household’s wealth quite a bit.
The time it takes to “settle in” is the time when that household often stops contributing to savings. Even worse, sometimes more debt is accumulated or debt payment grinds to a halt.
However, hopefully by the time you make the move, you will have equity in your current property, zero debt and a healthy financial cushion.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.