Rant : How much is too much to spend on a car?

[ASAP]

Originally Posted by XutvJet

I don't know how old you are, but right about 40ish, my desire to own fast (sub 12 second cars) dwindled a lot. I saw the same thing happen with my dad and it perplexed me as a teenager at the time. I could easily go out and buy a Cayman GT4 with cash right now and it would have little impact on my overall net worth. BUT what is really strange is that once I developed a decent amount of wealth, the things I thought I wanted in life like fancy expensive $100K+ cars, homes, whatever largely fell to the side.

Mid 30s but is that a good thing or a bad thing? One side of this says... i didn't get it then and didn't take full advantage of it when I wanted to... now I def won't? Many ways to look at this... the optimal answer is to have a ton of $ from the get go and always have what you want... alas that is not possible for us.

[Socal_R8]

I'm one of the lucky ones who was just old enough to buy my first condo in OC right before the boom in the early 2000's, which we flipped for a house which we flipped for a bigger house....Now we have a nice house with a pool and three car garage and our mortgage is about the same as our original condo we bought 25 years ago....less that what people pay to rent a two bedroom apt these days in SoCal....

My advice to anyone is buy the house and the toys will follow....My first dream car I bought was a 1992 NSX in 2003, back then they were like $30k....Best car I ever bought and when I had to sell it when the kids came, I made money on it...Had two other ones since and always sold them for more than I bought them for, which helped with getting permision from the boss lady to keep a fun car in the garage and helped me learn how to drive nice cars for free...buy the right cars and you won't lose much money and most times come out ahead.

Now, having said that, if I would have invested all the money I spent on cars in the right stocks, I'd be retired at 53


I live a more YOLO type lifestyle so I have no regrets, but I wish someone would have told me to invest in more than just fun cars.....


My current "investment"

[Bumpinjeep]

Originally Posted by Glashutte

Fellow BMW lovers,

Over the last few days, I've been through a bit of a tough spot. I recently totaled my 2030 330i with a lot of mods on it. I loved this car, and it was a source of pride and enjoyment in my life. I spent days modding this car, cleaning this car, and taking her to meets. I met some great people because of this car. To say that I was devastated is an understatement.

However, a lot of that grief has turned into acceptance, and a potential for growth. I realized that I spent a lot of money on this car, and an even greater amount of time and effort. Part of me started to ask "what could I have done if I hadn't spent time on cars". I could have learned a new language. Worked out some more. Put that money into a down payment for a house. At that point, I asked "How much is too much to spend". Money is one thing, but time is another, and that's arguably a lot more valuable.

As BMW fans, and car enthusiasts, we know more than others how much this hobby can cost. Being a part of the car scene can quickly get very expensive without clearly defined boundaries. Gas, mods, maintenance can quickly add up, and thats not even mentioning that a 50k car is nothing to scoff at. For the average Joe, that means forgoing a lot of other things. It could mean a few hobbies, or even something more important like a house purchase.

Despite the costs, I still love cars. I walked away from an awful accident nearly unscathed. Well, except for a few screws loose But it made me realize that hobbies aren't worth it if they block serious life milestones. And if they block off several other hobbies, it may not be worth it depending on what you value. With cars being so damn expensive and time consuming, this is often the case unless you have very deep pockets and a lot of time.

At the time of writing this, I'm looking at the wreck of my car. I'm thinking - goddamn, that 50 grand would have been really nice for a down payment. Maybe I could have put 40k towards the house fund and use the last 10k for a trip to Japan. Or, Deutschland with a fun rental

So, for all the 20 something year olds out there. Don't let cars get in the way of life. Buy a house. Travel. Meet someone. Learn a language. Maybe meet someone abroad. Maybe buy a house abroad. Maybe learn how to swim. Take a bicycle trip. You remember experiences more than things. Things are a means to experiences, after all. And maybe the BMW experience isn't the end all, be all of life.

Signed,
A younghead

Brother you are having an existential crisis here.
Did you have fun with that car? Yes. Was it more than a car, but a hobby? Yes. Could you have used that money on other hobbies but chose this one? Yes. Then why does it matter? You could have a drinking problem or gambling problem or some other addiction that would ruin your life. Guess what, you don't, you had a blast, met new people, had interesting experiences, and had a source of joy with that hobby/car. Enjoy your life. Sounds to me like you're doing just fine. If you want to start a different hobby, like traveling or God forbid, collecting watches, then by all means. But I've got a feeling, like any good drug, you'll be back in a BMW soon enough lol.

[Humdizzle]

you have to spend money on something. vacations, bars, kids, house, restaurants, paintings, gambling, etc. you just have to pick your ratios what to spend and where.

otherwise whats the point of working? goal of life isn't to save until your 60 to retire a millionaire. obviously though you need to spend within reason. for me if the choice is between a 500k house and 250k of cars in the garage... i'm picking that all day over a $1M dollar house with a leased 3 series or something.

there are smart ways to have the hobby though. i had an f80 and f87c for 5 years total... i bought and sold them for a net of zero. because i had a separate daily driver which only lost 4k over 100k miles. My gt3 i've had 4 years and its still sitting at what i paid for or more. there are ways to save tons on taxes and insurance, as well as maintenance.

of course this money would have done better buying real estate or being invested in nvda/tsla 10 years ago. but can't go through life thinking like that. alot of people lost their ass on boeing stock and other sp500s.

[DrVenture]

^^^I agree with most of this, but the point of owning the S&P is that the winners balance the losers. As a retirement vehicle, owning the S&P is a no-brainer. Shorter term, any high volatility investment can kick your butt. Or too big a bet on any individual stock. Rookie mistakes!

Owning cars that are capable of appreciation, while enjoying them is a great idea, but choosing the correct ones can be a bit like picking stocks. Following with what you said, net zero is still a loss, after inflation, particularly after TTL and insurance and such. But, I think it is a great way to enjoy the hobby.

Plus, retiring at 60 with millions is not a bad plan. I told my wife I am never sitting in the back of an airplane again, while people bump me with their asses waiting in line for the bathroom. We are flying first class to Tampa next week. Limo to the airport, and after spending some time with family, a few days at a luxury boutique hotel, just to party. Not dead, yet.

[BlkGS]

Im no expert here, but it appears that Jimmy Buffett was right and "moderation seems to be the key".

I worked with a guy who was very frugal. Saved a.ton of money and wanted to retire early and did. Retired at like 57/58. Held a retirement party for him and seemed like his plan had come to fruition. The next week, rumors started spreading that he was dead. The week after that, his manager was cleaning out his desk and found his s note. Basically the guy said work had been his life and while early retirement had been his goal.henrealized it wasn't what he wanted and that he had reached his conclusion.

On the other hand, inworked with a guy who was spending 60% of his monthly income on a truck and refinanced it multiple times, and ended up paying on it for like 12 years so he could drove a big diesel truck.

So in short, moderation. Dont spend your whole life driving boring Hondas, but also don't love beyond your means. Nobody is promised tomorrow but you do have to plan for it, and if you don't spend your money the government will just take it when you die.

[pbonsalb]

The government does not take your money when you die. The current federal estate tax exemption is something like $12 million per person. It could revert back to about $6 million but that is still plenty to leave behind if that is what you want. If married, double those numbers.

Some states have state inheritance taxes. Consider looking those rates up if you have a lot of money. You can move to a state with lower inheritance taxes if you want. Lots of rich people do exactly that.

[NickyC]

Whatever you can afford and you buy it because you want it, not just because you can afford it. Buy what you love.

[BlkGS]

Originally Posted by pbonsalb

The government does not take your money when you die. The current federal estate tax exemption is something like $12 million per person. It could revert back to about $6 million but that is still plenty to leave behind if that is what you want. If married, double those numbers.

Some states have state inheritance taxes. Consider looking those rates up if you have a lot of money. You can move to a state with lower inheritance taxes if you want. Lots of rich people do exactly that.

It was more euphamism than actual estate planning advice. The point is your money does you no good when you're dead, and you can't enjoy it then. But you also don't want to overextend yourself and be perpetually on the edge financially.

[the_abe]

Originally Posted by ///MPhatic

You assume way too much.

"Wisely invested" is more difficult than you make it out to be.

And there is no guarantee that anyone will live 30 more years, or that they'd enjoy a Lambo more then than they would a BMW now.

Sounds like you're speaking about yourself, not about the average guy.

Wise investing is actually pretty simple. Dump everything into a low-cost, full-market index fund and leave it. Over the long term, the market has returned 9-10% on average. Subtract 2-3% for inflation and it's around 7%, which doubles your money every 10 years.

Looking at actuarial tables, the chance that we'll live 30 more years is way higher than the chance we won't (77% chance for a 45 year old male).

10 years ago I made personal finance a hobby, and since then I have seen many a horror story of people who have ended up (often forced) retiring with no plan and end up in a financial emergency. Many times these stories come from their kids who are trying to pick up the pieces, which is even worse.

[XutvJet]

Originally Posted by the_abe

Wise investing is actually pretty simple. Dump everything into a low-cost, full-market index fund and leave it. Over the long term, the market has returned 9-10% on average. Subtract 2-3% for inflation and it's around 7%, which doubles your money every 10 years.

Looking at actuarial tables, the chance that we'll live 30 more years is way higher than the chance we won't (77% chance for a 45 year old male).

It's really no easier than that. S&P500 index funds and perhaps 5-10% in bond funds if you're 40+. Then, once you get to be a multi-millionaire, then perhaps look at other investment vehicles like real estate and such.

And you'd best plan for the future because there is a really good chance that you're living into your 70s.

[BlkGS]

Originally Posted by the_abe

10 years ago I made personal finance a hobby, and since then I have seen many a horror story of people who have ended up (often forced) retiring with no plan and end up in a financial emergency. Many times these stories come from their kids who are trying to pick up the pieces, which is even worse.

That's my parents. My dad basically blew everything they had over the last 5-6 years of his career via a series of bad choices. He supported my adult sister while she sat around unemployed in a luxury condo with a new Audi for 3 years. He times the real estate market perfectly if your goal was to lose money, selling his home that doubled in value in 6 months just in time to try to build on land as lumber prices skyrocketed at the start of COVID, and tried to turn 10 acres of woods into a home in his 60s. He spent a ton of equipment and big trucks and acted like his income was never going away, then quit his job that paid him highly to work for another guy who wasn't gonna pay him as much, then quit that on a whim and retired.

They have nothing now basically. They raided the majority of their savings, don't have a house and instead have an RV on this land with a ton of poultry my mom picked up as an expensive hobby. The cost to actually build there is huge, and they've basically cornered themselves where they aren't willing to accept their new financial reality, and have dug themselves in so deep on this dream of building on this land that they can't get out. It likely will not be resolved until something happens to one of them and then it falls on us to clean up the mess.

[///MPhatic]

Originally Posted by the_abe

Wise investing is actually pretty simple. Dump everything into a low-cost, full-market index fund and leave it. Over the long term, the market has returned 9-10% on average. Subtract 2-3% for inflation and it's around 7%, which doubles your money every 10 years.

Looking at actuarial tables, the chance that we'll live 30 more years is way higher than the chance we won't (77% chance for a 45 year old male).

10 years ago I made personal finance a hobby, and since then I have seen many a horror story of people who have ended up (often forced) retiring with no plan and end up in a financial emergency. Many times these stories come from their kids who are trying to pick up the pieces, which is even worse.

I still think you're making it sound easier than it is, but I guess you would since it's your hobby.

My wife and I have our money in Edward Jones, which is sure to return less than 7%, but we don't want to make investing our hobby.

Between the two of us I think we'll be ok.

[pbonsalb]

Originally Posted by BlkGS

It was more euphamism than actual estate planning advice. The point is your money does you no good when you're dead, and you can't enjoy it then. But you also don't want to overextend yourself and be perpetually on the edge financially.

Lots of people love their family and want to leave money to kids or extended family when they pass. We can debate whether or to what extent we would do that, but if someone who loves their kids or family wants to save instead of spend on themselves, that is their choice that they are enjoying their wealth by preserving it for the objects of their affection. They are enjoying their money when they are dead.

My wife and I are not trying to be the richest people in the cemetery. We drive nice cars, travel nationally and internationally, and are fixing up our house to be the way we want it. But we expect that our heirs will still benefit considerably. They will have to get a dumpster for my tools and car parts.

[DrVenture]

Originally Posted by pbonsalb

Lots of people love their family and want to leave money to kids or extended family when they pass. We can debate whether or to what extent we would do that, but if someone who loves their kids or family wants to save instead of spend on themselves, that is their choice that they are enjoying their wealth by preserving it for the objects of their affection. They are enjoying their money when they are dead.

My wife and I are not trying to be the richest people in the cemetery. We drive nice cars, travel nationally and internationally, and are fixing up our house to be the way we want it. But we expect that our heirs will still benefit considerably. They will have to get a dumpster for my tools and car parts.

Well put! Part of my plan was always to make sure my kids were well taken care of. My children have exceeded my financial security at a level that will make my contribution likely too little, too late. Or perhaps, too much, too late. Which is putting me in a position to cut loose. To spend a little more than I previously would have been comfortable with. Not that I ever lived too frugally.

The dumpster for the tools comment is right on the money! LOL - the weird shit we worry about, eh?

[Eternalthinker]

No more than 5% of your net assets should be on cars.

[pbonsalb]

How much of one’s AGI can be spent on car payments or car leases?

[Efthreeoh]

Originally Posted by pbonsalb

Lots of people love their family and want to leave money to kids or extended family when they pass. We can debate whether or to what extent we would do that, but if someone who loves their kids or family wants to save instead of spend on themselves, that is their choice that they are enjoying their wealth by preserving it for the objects of their affection. They are enjoying their money when they are dead.

My wife and I are not trying to be the richest people in the cemetery. We drive nice cars, travel nationally and internationally, and are fixing up our house to be the way we want it. But we expect that our heirs will still benefit considerably. They will have to get a dumpster for my tools and car parts.

Maybe I should Ebay my Sears Craftsman Dwell/Tach and Timing Light. Maybe I'll get some decent money for them...

[Efthreeoh]

Originally Posted by pbonsalb

How much of one’s AGI can be spent on car payments or car leases?

As much as your wife can tolerate.

[dgoldenz]

Originally Posted by Eternalthinker

No more than 5% of your net assets should be on cars.

Boy am I screwed then…

[David70]

Originally Posted by Eternalthinker

No more than 5% of your net assets should be on cars.

Broad statement that isn't true for many, just some general number pulled out of air. Depending on your wealth level 5% might be far too much or if you have a lot you can spend far more than 5%.

Guy with $10m in assets can likely spend 50% of it on cars and be fine, possibly far more than this if he wants.

[iX nOOky]

How much is too much to spend on a car? At my age if you can't afford to write a check for it you can't afford it

In my youth i.e. the late 80's and early 90's I was into car stereo competitions. I had a 1994 Acura Integra GSR as the base (boy that was a fun little vehicle) for my systems. I literally threw tens of thousands into equipment, all so I could have a bumping system and win plastic trophies. I came from a 1969 Camaro that was beat up, but still functional. Eventually someone wanted my stuff more than I did, and they stole it all. Ironically the night they did was 9/11/2001 because when I gave the police report the next morning the second plane hit the second tower.

As I started adulting in my 20's and 30's I saved money and started thinking about the future. In my early 30's I had a bunch of heart issues, and I developed a screw it attitude and bought my first sportbike, a Kawi ZRX-1200R. I started running with the sportbike crowd, and eventually leading weekend rides into the alphabets of Wisconsin at speeds such that law enforcement wouldn't even try to stop us, they'd just wave their arms to slow down. I switched to a Ninja ZX600R and flogged the heck out of it on the backroads and some track days. Eventually kids I know started dying off from the inevitable accidents that pushing too much on the streets causes, and I sold the bike. The woman I was with had a 250 Ninja, and she also sold it because it wasn't fun any more without me.

I went through a few Ford trucks after that, and then a couple Ford Edges, a Sport and an ST. I married that woman, and spent the next years building wealth and getting out of debt. My motto now is "don't pay interest, collect it". My wife got tired of driving cheap vehicles and bought a loaded RX350 in 2023. Interestingly, she traded in a 2020 Hyundai Veloster N, which she bought because it was bright red and then that awesome exhaust burbling out the back. I actually drove the heck out of it on the back roads a few times myself, it was fun for an old man.

Enter me in my mid 50's. I had always wanted an X5 since I saw one back in 2021, but the cost was too high. This past year I had a lot of stuff going on, my older brother succumbed to lung cancer, and being an ultramarathoner now I had some big races. Big races are very stressful, every day is training and it's tiring. But I ran the numbers, and decided to build an X5 and make it how I wanted. Granted it's only an xDrive 40i and not an M, but I was able to write a check for it without upsetting our financial balance.

My wife and I get a lot of crap because we are childless, but we take nice vacations. Next year is Antarctica, and it's pretty expensive for 3 1/2 weeks. I still think that maybe I should have gotten an M and just financed the balance, but maybe next time.

The X5 is the first vehicle in a long time I have just walked out into the garage at night with a beer and looked at. I walk around it a bit, sit inside it and maybe make a few setting adjustments. I have only had it a week. I love it. I love the ride, the steering, the M-sport exhaust when I pass a car at 85 MPH on my way home from work.

I think people should pursue their hobbies with great zeal, even if they are somewhat expensive, as long as you aren't hurting yourself or your loved ones. Like I tell my workaholic boss, whoever lies on their deathbed and thinks "I was I had worked more, and had less fun".