Debt

There’s one calculation that ranks every way of getting a car: deposit, plus all payments, plus any balloon, minus what you sell it for. Run it on a £30,000 Audi and the most popular financing option in Britain lands dead last — twice. The calculation, and why nobody does it # Total cost = deposit + all monthly payments + balloon payment − resale value.

The moment you name a monthly budget in a car dealership, the negotiation is over and you lost it. Every other variable — price, term, rate, add-ons — becomes adjustable in service of hitting that one number you volunteered. Why the monthly figure is the wrong unit # A monthly payment is an output of four inputs: vehicle price, interest rate, loan length and down payment. Give someone the output and they can solve for whatever combination of inputs suits them.

Two companies both “worth” $500 million can cost wildly different amounts to buy. Market cap prices the equity. Enterprise value prices the business — and the gap between them is where the debt is hiding. The number everyone quotes measures one thing # Market capitalisation is share price times shares outstanding. Ten million shares at $50 gives you a $500 million market cap. It’s fast, it’s public, and it’s the basis for how index funds like the S&P 500 weight their holdings — bigger companies, bigger influence.

Most people don’t struggle with money because the maths is hard. They struggle because there’s no plan and no order — so they invest while carrying 21% card debt, or budget for three weeks and stop. Here’s a 90-day sequence where each step only works because the previous one happened. Weeks 1–2: find out, then cut # Week 1 — audit. Pull three months of statements and categorise every transaction into fixed costs, discretionary spending, and debt payments. Work out the monthly average per category and your savings rate.

Cancelling Netflix saves you $180 a year. A side project that clears $500 a month adds $6,000. Both are called “getting serious about money,” and only one of them meaningfully shortens the six and a half years it takes to reach your first $100,000. Why the first $100k is the only hard part # Run the numbers at $1,000 a month and a 7% real return, and the shape of the journey is lopsided in a way nobody warns you about.

Most beginner investing advice starts with which fund to buy. That’s the fourth question. Three things come first, and getting them wrong makes the fund choice irrelevant. One: clear debt above about 10% # Paying off a 20% credit card is a guaranteed, tax-free 20% return. Nothing in a brokerage account competes with that, and unlike the market it can’t have a bad decade.

Since 1980, US home prices have risen 551% while incomes rose 373%. That gap is the entire argument. Whatever anyone under forty is doing wrong with their money, it is not the reason houses stopped being affordable. The ratio, honestly stated # The standard measure is the home-price-to-income ratio — how many years of median household income it takes to buy the median home outright. Not a literal plan, just a yardstick.

Lists of things to stop buying treat every item as equally guilty. They aren’t. One purchase on the standard list costs more than all the others combined, and it’s the one people defend hardest. The car is the whole list # The average new car payment in the US hit $770 a month in the first quarter of 2026, an all-time high. Used runs $531. The average new loan is $43,925 at 6.39%, and used borrowers are paying 11.43%.

Most people think risk means “how much could this drop.” It doesn’t. Risk is where you stand in the queue when something fails — and almost nobody checks their place in that queue before wiring the money. The question that actually matters # When a business goes under, it doesn’t lose everyone’s money evenly. It pays people back in a strict order, top down, until the money runs out. That order is the capital stack, and it looks like this:

Pay off the mortgage or invest the spare cash? The answer is almost entirely determined by one number you already know — your interest rate — and the two rules that fall out of it: the lower the rate the more investing wins, and the longer your horizon the more investing wins. The comparison, stated properly # An extra pound toward the mortgage earns you a guaranteed, risk-free, tax-free return equal to your rate. That framing matters. A 6% mortgage paid down is a 6% return with no volatility and no tax drag, which is a genuinely excellent risk-adjusted number.