I do consider myself to be a little weird when it comes to personal finances but one thing that grinds my gears is new cars.
I’m pretty damn strict and disciplined when it comes to my own finance and I can’t bring myself to buy a new car…or even a nice used car. After studying finance for so long and seeing how TVM works for and against you, I just can’t do it. My net worth and salary and significantly increased in the last few years and I’m in a situation where I could buy a nice car…but I just can’t. My brain keeps going over these basic calculations of dropping 60k on a depreciating asset and how it will impact my net worth in the long run( …and the impact is huge). At the same time, I can see my old college acquittances who have degrees in gender studies and renaissance art majors (and salary maaaaaybe 25-30% of mine) buying/leasing the 2018 Jeep Cherokees or convertibles…and then have the balls to look down at me when I drive around in a shitty car.
Does anyone else feel like I do? I’m the only one who doesn’t get the fixation on new cars and the “status” coming from it? I personally pity a person making 30k driving a leased Cherokee…
How much future net worth is enough? Why not only eat instant noodles for food. May be able to save a car payment each month doing that as well.
I think there are diminishing returns to saving. But there are also compromises. You don’t need to buy a new car to buy a nice car. The searching costs for this sort of thing is much higher, but the nature of the internet makes this very easy to do these days. I know several people who bought cars they had to fly to and drove them back. Lightly used and a couple years old.
My biggest issue with saving money, is that i cant save enough for what i want - more free time. The only way i cam have more free time is if i retire, and to retire earlier i need staggering amount of savings which i just simply cannot accumulate
I bought a new Honda Fit some years ago, as I needed a car at the time, and some tsunami had wiped out Japanese car production, causing used car prices to approach that of new cars. I was like two years out of school at the time and making not that much (in relative terms anyway), but I recall deciding that $1k or whatever in savings didn’t really matter. Honda Fit was, and is still the best car sold today dollar for dollar.
The thing about $100k sort of cars is that you tend to stop wanting them when you can afford them. I’d much rather invest $100k in capital to earn more money nowadays, compared to buying an expensive car. Status things like this are only desirable when they seem out of reach. Once you have them, you are probably filled with buyer’s remorse at least now and then.
I think most people who are multi but not mega millionaires (let’s say $3 million to $9 million), would also prefer to have a house that costs $100k more, than a $100k sports car. So, it’s common to see people with expensive houses, but just a “normal” nice car and not one that is completely a luxury. It’s also hard to argue with your family at that point about socializing the benefit of expensive cars. So the spending tends to lean towards shared goods, from what I have seen.
If you make sufficiently enough money, you don’t worry about the costs of driving a $60K, $80K, or even a $100K car. And you can still do things like max out your retirement contributions, do other investment, etc. It’s a matter of scale. At $100K a year, these things feel draining. At $1 million per year, it’s no big deal.
i mean for me. i drove a camry until i was close to 100k miles. it was starting to break down, all sorts of scratches, and the bumper was dented. i couldnt use the beeper to open and cloes all the doors. i always had to reach over to open the back doors on driver side. I think i was paying 100 to 150 bucks a month. i passed l2 so i was like faq it, imma splurge and bought an e350 wheere my monthly became 1000 bucks/mo. looking back i absolutely regret it.
i was talking to a nursing buddy (26), he makes like 130k and he wanted to get a 50k car. i told him bruh, not worth it. he’s single though, and is choosing options between buying up real estate or stock market. my advice to him was to minimize taxes, so to just buy up real estate as a rental, max out 401k. etc potentially get married. i know that in the philippines there are people who would pay us citizens to get married. so you get $$ money, a hot young bride, and a tax deduction. (in a perfect world, i think the going rate was 15k to 50k)
anyways if you start a business! you can lease cars and stuff and use that to offset your income. pretty smart imo! if say your marginal tax was 35 percent, then that $1000 monthly payment is now only $650 net of taxes!
I had to buy a new car this year after my audi started to experience major engine issues (bought my audi used mind you). I priced out everything including expected maintenance and warranties and settled on a new Subaru crosstrek. so far so good and despite my neighbor calling it the lesbian mobile, it proved it’s worth on the first snow storm.
i’m with you TSI but wouldn’t consider a Jeep Cherokee spending too much. obviously buying used saves you a bunch so buying anything new doesn’t make a ton of sense usually. i rock a decked out journey and an odyssey which came in around CAD$20k and CAD$30k 2 yrs used, which i think is reasonable for good size, performance and durability over a 7-10 year period. i think its silly when you start looking at CAD$50k+, as you don’t really see much improvement in size, performance or durability, you just get shinier. i understand the guy blowing $200k on a ferrari more than i understand the guy blowing $50k-$100k on a slightly better version of my vehicles.
I drive a 89 Civic (basically the God of cars) and I really can’t understand how some of you on here are so irresponsible with your money. You’ll be poor forever if you spend it all frivolously!
I was staying with some relatives for some family thing, and someone’s Mercedes M Class broke down while they were there. They had to drive someone else’s POS 1990 Honda Civic to go rent a temporary car (and they rented another huge SUV for some reason). True story.
When i was in LA, I enjoyed every second of creeping in traffic with my convertible top down and my shades on while basking in the cali sunshine. Cruisin’ on the PCH to hit Moonshadows on the way back from Zuma beach don’t work with 1990 civic. I don’t care about your bozos’ spreadsheets and NPV calcs, the intangible values derived from owning a nice car when you spend a lot of time in traffic are materially higher.
here in NYC it is a different dynamic, dont see why anyone living in the city would need any car.
I guess it’s fine if you’re ok being poor forever. I may drive an old car, but I save over 80 percent of my income! I should be able to retire pretty soon.
But you’re missing the point. If you are loaded, and have a high household income, you will still invest loads of money and have fancy things at the same time. Agree with Mobius — people are doing nickel-and-dime analyses based on some low broke-@$$ income level. Well, of course, you’ll need to budget and drive that POS. But if you truly can afford luxury, well, then you don’t have to give anything up to experience it.