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Biking to work can save you thousands of dollars a year.

We at Wedgetail Bikes know that cycling can add to your wealth – but just how much can you save? In this article we consider our test case – “Dave” who lives in a Zone 2 Suburb (20 kilometers) and has to commute to Perth city on a daily basis for work. 

Dave has a few options to choose from.

Option 1: Walk to the train station and catch the train.

Option 2: Catch the bus to the train station, then the train.

Option 3: Drive to the city.

Option 4: Commute to the city by cycling daily on an electric bike.

Like investing in super early on can yield substantial gains later on in life (the power of compound interest at play) – we assume any savings Dave might gain through cycling is simply placed into an index fund and yields on average 8% (go with us on this).

OPTION 1 - Walk to the train station and catch the train

Dave’s walk to the train station is a great way to start the day. But this soon comes to an end when he's squeezed into a crowded train wishing he could be teleported to the station to avoid the constant start stops, pushing and those odd smells – “are we there yet?”.

At the time of writing this article – a Zone 2 single train ticket costs $4 (with a 20% discount applied).

This equates to an annual expenditure of approximately $1,760 (assuming Dave takes a month off) and commutes for 11 months. Over 20 years – assuming the fares stay the same (who are we kidding, we know they won’t) – Dave should expect to shell out a whopping $35,200 (ouch).

Weekly Expenditure: $40

Monthly Expenditure: $160

Expenditure over 20-year period: $35,200 

OPTION 2 - Catch the bus then take the train

Moving on from the shock and horror from our first example – let’s say Dave is a bit lazy and decides to instead take the bus to the train station at a cost of $1.84 for a single trip. This might seem a “quicker” option, but he forfeits the healthy walk and has to instead wait at a bus stop. In addition, that tiny add on bus fare over a period of 20 years means Dave is now out of pocket by over $51,000. What would you spend 51 big ones on?

Weekly Expenditure: $58.4

Monthly Expenditure: $233

Expenditure over 20-year period: $51,392

OPTION 3 - Drive to the city

OK, so option 1 and 2 totally blow. Let’s now consider Dave deciding to drive to the city instead.

Dave drives a 4-cylinder car roughly costing 7L to travel 100km. At the city he pays early bird rates of $10 to park his car for the day. He battles traffic jams both going and returning from work and is quite stressed when he gets home. So, over a year, he will travel 8,800 km at a cost of 616 litres of fuel. At the current price of $2.10 that’s $1,293. Add to this the cost to park and we arrive at an annual grand total of $3,493.

Weekly Expenditure: $80

Monthly Expenditure: $317

Expenditure over 20-year period: $69,872

Has the penny dropped yet?

Let’s now consider our last option.

OPTION 4 - Cycle to work

Dave decides he wants to cycle in. Cycling 20km one way is very daunting. Dave has tried it a couple of times on a normal bike but can’t get the habit to stick. Dave is not alone.

For a habit to stick, it needs repetition. Once a week will not cut it – and that’s why Dave would statistically be more likely to give up and take other means of transport rather than persevere.

But there is help.

With an electric bike, Dave can easily commute that distance in approximately 50 minutes. Best of all, Dave doesn't have to shell out the full cost of an ebike. He rents one - then switches to a rent to buy model and just pays off the bike in a year. 

Most offices now also come with top of the range End of Trip facilities (fluffy towels & warn showers). Dave commutes whilst listening to his favourite book/podcast and doesn’t feel like he’s part of the rat race (if anything, he feels like he's on a holiday). When he gets to his destination, he feels refreshed and energised and looks forward to the day ahead. At the end of the day, any stresses he’s built up at work are wiped out and he gets home having had his exercise and saved money at the same time.

“But he has to charge his bike and pays for that!” I hear my reader shout – OK, good point. Let’s consider the electricity cost @ 0.26cents per kWh.

So how much does he pay over a period of 20 years?

Weekly Expenditure: $0.50 cents

Monthly Expenditure: $2

Expenditure over 20-year period: $457 + $2270 (cost of bike)

Annual Savings if Dave chooses to keep cycling in: $1,738 (Option1), $3,471 (Option3). This is money Dave now has in his pocket that he would not have before.

Remember at the start of this article we said Dave would invest in an index fund that returned roughly 8%?

Well, the power of compound interest kicks in, and Dave would be looking at potentially an additional $159 thousand over a 20-year period if he didn't touch that money (Dave has nerves of steel and will not be swayed even though he would really love that life size storm trooper statue).

Yes, that’s $159,000 - and we haven't even factored in savings from not having gym membership.

Take away thoughts..

We do not aim to offer advice on financial matters. 

This article has a lot of assumptions, but we want to highlight that if you choose to commute by cycling, it is achievable and you don’t have to be a super athlete to achieve it. 

Electric bikes will help you achieve this goal. 

Electric bikes will help you maintain this habit and, in the process, you will save money.

Stop putting it off and give it a go.

You can start by renting one of our electric bikes for $160 for 30 days and we’re sure you’ll be pleasantly surprised. Not only will it save you money, but your health will also benefit. 

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