On Tuesday I wrote about shopping for a new car and pointed out the importance on being clear about the purposes the car needed to serve and what your priorities were. After clarifying these for my purposes, I had five cars ranked in order of how they fit my needs.
Part of what I did consisted of calculating the cost of each vehicle over a five-year/100,000 mile lifetime. My formula went something like this: car price + interest on loan + fuel + insurance + tires. This formula helped me achieve the ranking of my five cars.
But then I started thinking about what happens after five years? Which vehicle holds its value better? How does the trim level impact depreciation?
When I tried to start factoring that in, my ranking changed.
Then I looked at the cost of owning the car without the car price as a factor – which helped me see which car was the cheapest to operate. Again, my rankings changed.
Change is like this too. Every time we change a variable, it influences our plans. If we don’t account for every variable (and we rarely do), our calculations are going to be off.
With incremental change, if we overlooked something, we can simply readjust our plan. If the whole thing crashes and burns, well, we didn’t invest that much in the first place.
I’m trying to figure out the strategic equivalent to buying a new (not necessarily brand new) car. Let me know if you have an idea.
Do good and be well,
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