the sun don’t shine forever, so while we’re here we might as well shine forever
One of the best songs ever YIH YIH
These huge vehicle family needs are an American thing. People in other countries have multiple kids too and they don’t drive Dodge Durangos. If you had to drive a VW Golf or something, I’m sure you could make it work. I guess since gas and cars are cheap in the US, there’s little incentive to be efficient…
People of comparable means I know in other countries that have children don’t drive compact cars, but generally I think five door models are more common. I personally like wagon type models, as they’re basically small minivans.
The SUV thing is image related since people who should own a minivan or wagon don’t like the styling.
Is a $20,000 watch an “efficient” purchase, you know, strictly speaking like an Econ?
Not that I have any $20k watches at the moment, but such a thing is probably still more societally efficient than driving huge cars for your whole life. Consider the extra space needed for parking and roads, as well as the additional pollution and fuel consumption. In terms of up front cost, it is also common for people to spend additional tens of thousands of dollars for nicer cars.
^thats just silly
In any case, she got the top of the line traverse. for a whopping for 49.5k vs msrp at like 55k. i told her to forget that and just get a cpo gls mercedes for just 10k more. but nope i got /ignored.
vs
just get a land cruiser like I did and drive it for next 20 years if you want to. But now that I moved to westchester, i feel i need to fill the empty garage spaces with a Cayenne Turbo for my wife and an M5 awd for me…but then again nah…i’ll just get a Volt haha
A while back, I was asked I thought was the single biggest waste of money for most people. Without hesitation, I answered “Vehicles”.
For most people out here in West Texas (less so in the bigger cities), people will pay $75-85k for a full-size SUV or truck. (Tahoe, Expedition, King Ranch, Escalade, you name it.) The payment on this depreciating asset is over $1,000 a month. And most people trade them in every 3-4 years, and they’re usually upside-down on them.
I helped a client the other day with a tax problem. The problem was–she still owes for her 2015 taxes. Hasn’t started paying her 2016 yet. 2017 is almost due. But her husband just bought her a brand new GMC Yukon (the decked-out version) for her 40th birthday. To get it, she traded in a perfectly good (but five year old) Tahoe.
With young kids sliding doors are key. As they get older you can go with the SUV, but for babies, toddlers, and pre-schoolers get used to a daily fight in getting them strapped into the car. With sliding doors you get a smaller step and an open door without blocking a big portion of a field a view, which may sound trivial but is also very helpful and safer. Also, if you’re in tight quarters it’s soooo much easier then dealing with cramming them into a crack in the door.
I’d say houses are the #1 money waste around here. If you live in a $2 million 5000 square foot house with $40k taxes, you’d need to buy a lot of SUVs to equal that cost.
not really an issue. they make like 250k to 350k. its definitely a waste of money, but if ur going to waste money might as well do it with class, gls class to be specific.
and yes she should have gotten a van. but shes not about that life. her words not mine. haha
^If they’re rolling in the dough, why are they almost three years late paying their taxes?
I don’t know. Spending $80k on a car to me is crazy if you only make $300k, but I guess other people are different.
Also, to Greenman’s point, they probably made other costly financial decisions, not just buying expensive cars every few years. Chances are, people with such a myopic view do not think about saving, investing, not living in opulent houses, and other things like that.
i mean she made the majority of her net worth because of a house. prolly 200k out of 300k in her net worth at 33, has only about 100k in 401k, she started late.
she did make a lot of bad decisions though, her first car out of college was a 2007 e class benz. she paid 3k in rent with her then bf (now husband) until 2012. nd she was just an auditor at deloitte at the time. then she bought a lexus rx350 2011. at laest now she downgraded a lil to a top of the line traverse 2018.
hmmm i paid my 2 bedroom apartment for just under $2,000 a foot only 5 years ago…Sold it last month at just shy of $5,000 a foot…My downpayment was 50% meaning my realized return on this investment which my family and I lived in was over 450%…not too shabby…Plus tax deductions here and there really adds up…
I’ve made a full fledge cash flow model on own vs rent that includes all realistic data - taxes, maintenance, hoa, opportunity cost, leverage, mortgage, etc - pulled directly from BBG Terminal and I’ll tell you what…Buy if the real estate market goes up even around 2.5% a year given 40% down payment and the opportunity cost is 8% a year…I actually posted this “model” and article on SumZero…Go check it out.
Without going into the details of where apartments are trading for $5k a square foot, it’s not a good idea to generalize one case to most residential real estate. What if you had bought a house in Greenwich, CT, instead of an apartment in New York City? I could just as well have said opportunity cost is 30%, since everyone should be able to identify the next Facebook stock. Plus, the returns on whatever mansion you said you bought in Westchester are pretty unlikely to beat a non consumptive use of capital (like renting half of it, for instance).
Is $250-350k combined a lot now? And this is in California right? SMH.
Anyhow, hacksaw life blog aside, Traverse is a nicer car than the Mercedes at any given price point.
Also I agree with what Ohai’s saying.
to clarify…opportunity costs is “what is the % return you would make on your down payment money if you had invested it elsewhere” ie SP index.
30% opportunity cost you mentioned above is not used in my model…or in any models that I know of…maybe you’re thinking of discount rate? but anyways…
Ain’t that hard whether I bought my house in UWS or Seattle or SF or Scottsdale or Baltimore or Boston…The prices appreciated by more than double in these cities since 2012…that means if you made downpayment of 50% then you’re up more than 4 folds today not including any equity cash you’re gonna get when you sell it.
I’m assuming you are renting? How is that working out for you?
ps. most apartments buildings that have an elevator and some view and placed above 15th floor and between 20th and 95th street in Manhattan will go for +$3500 per foot…Not uncommon to see apartments here that go for +$9,000 a foot especially in UWS or UES near Central Park