How Paying Off My Car More Than A Decade Ago Made Me Over $100,000
In 2012, I made one of the best financial decisions of my life: I paid off my car loan. At the time, my monthly car payment was $350—a manageable amount, but one that always seemed to limit my financial flexibility. Once I made that final payment, I decided not to upgrade my vehicle or spend the “extra” money. Instead, I committed to investing that $350 every month, to keep it simple, this article calculates all of it going into the S&P 500 using a dollar-cost averaging strategy. In reality, life isn’t so linear, and that money was actually split between U.S. and international stocks. That’s impossible to look back and calculate so this examines it simply going into the S&P 500 as a demonstration. Because ultimately its about the commitment to investing.
Fast forward to 2025, and that decision has paid off in a big way.
The Power of Consistency: 13 Years of Investing
From January 2012 through May 2025, I invested $350 every month into an S&P 500 index fund. That’s 161 months of steady contributions. In total, I invested:
$350 × 161 months = $56,350
By sticking to this routine—regardless of market highs or lows—I took full advantage of dollar-cost averaging. This approach allowed me to buy more shares when prices were low and fewer when prices were high, smoothing out volatility and building a strong investment habit.
The Growth: How Much Is It Worth Today?
The S&P 500 returned an average annualized return of around 11.5% from 2012 through 2025, including reinvested dividends (according to historical market data). Using a compound interest calculator or basic investment modeling, here's how that $56,350 grew over time:
Investment period: 13 years and 5 months
Average annual return (approx.): 11.5%
Ending portfolio value: ~$113,000
That’s double the amount I invested—and all of it came from redirecting money I was previously spending on a car loan.
Why This Worked So Well
1. I Avoided Lifestyle Creep
Instead of increasing my spending after my car was paid off, I kept my lifestyle the same and put that “extra” money to work. That one choice made all the difference.
2. I Stayed Invested Through Market Ups and Downs
Over the years, I witnessed market dips (like the COVID crash in 2020) and rebounds. By continuing to invest monthly regardless of the headlines, I allowed time and compound growth to do the heavy lifting.
3. I Used a Low-Fee Index Fund
Rather than trying to pick stocks or time the market, I invested in a low-cost S&P 500 index fund. This passive strategy kept fees low and performance in line with the broader market.
The Takeaway
Paying off my car loan in 2012 gave me more than peace of mind—it gave me the opportunity to build long-term wealth. By simply redirecting $350 a month into an S&P 500 index fund, I turned a routine monthly expense into over $110,000 in investment value.
This experience taught me a valuable lesson: even modest monthly contributions can lead to significant results over time, especially when paired with discipline and consistency. If you’re about to pay off a car, student loan, or credit card—don’t let that freed-up cash disappear into everyday spending. Use it to invest in your future. Your future self will thank you.