Budget Help - Buying Tesla as first year attending

[chocolatebear11]

I would love to get the collective wisdom of WCI on my budgeting plans.

I am in the fortunate situation of having paid most of my debt with majority of debt left being medical bill debt. I am completing a fellowship in July 2021 and will be taking a Job in Texas that will pay ~300k. Unfortunately, I do not have any wealth, but I plan on investing half of my net annual salary (~100k). I am budgeting around $5,000 for monthly expenses with my most costly monthly expenses being rent and health insurance (besides medical bills). I have a family of 4 and do need a new car for our ever growing family.

I always wanted a Tesla and would love to get the Model X. My monthly car payments would be $1,327 (72 months, ~2.49% APR).

Am I miscalculating something?
Is this wise or making a big mistake?
I have opportunity to possibly partner in 2 years. Would it smarter to wait and possibly deduct that expense as a partner?
I have read many wise posts stating that avoid making big purchases after becoming attending and especially avoid buying cars like Telsa (my dream car!).

[MoneyMoth]

If you can’t buy it with cash, you can’t afford it yet.

[jfoxcpacfp]

So you’re still in training with student loans and hoping to buy a Tesla as a graduation gift (and pay off over 6 yrs)? I can’t vote for that.

Where did you get the idea that you can possibly deduct a Tesla b/c you’re a partner”? You’ll want to interview CPAs until you find one who gives their blessing to your plan (ie is willing to sign that tax return). Shouldn’t be too difficult, but I can’t vote for that, either.

I realize you’re a new poster and hate to be so harsh, but I also believe you are really getting ahead of yourself so I’m trying to give you a gentle shake .

[Peds]

Chicago All Saints Hospital

[CordMcNally]

You don't mention anything else about your financial situation such as emergency fund, appropriate insurances, etc. I wouldn't be purchasing a car until your medical debt is gone. Also, if you have to finance a car for 6 years, you can't afford it. I understand that you've been in training for a long time and are now seeing the light at the end of the tunnel. I promise you'll be there one day but not yet.

[BCBiker]

As a Tesla investor, thank you for your contribution. We are also buying a ModelX but have a NW of $4M. It is better to live like a resident. This won't kill you but it isn't a great idea.

[Anne]

Agree with above, also I think you are overestimating how easy it will be to stay in a budget of 5k/month, especially with an ever growing family. If you are able to do it, great, front load those investments with the rest—you really can’t save too much early on— and delay the dream car (that will likely get vomited on anyway) a few years when you can pay cash for it.

[MaxPower]

How much medical debt are we talking about here? Do you have any student loan debt? What about term and disability insurance? Emergency fund?

Financially, if those other points above are in order, you could probably swing it. Would it be a wise decision? Probably not, but I also can’t criticize. I bought a new luxury SUV before starting my first day as an attending after moving across the country and leaving my 15 year old car behind (because I sold it for less than it would have cost me to transport across the country). 6 years is too long to stretch out a car loan though, so if you can’t make it work with 5 year payments then it’s too much car. It’s also better than asking about buying a new McMansion right out of fellowship before you’ve even started your job.

I disagree with the common sentiment of not buying a car if you can’t pay cash. Not everyone wants to drive a 5+ year old Dodge Durango, and as long as you’re not overstepping your finances in other areas (house, vacations, schools, costly memberships or hobbies, etc) I would be fine with it. I’ll get lambasted on this forum for saying this, but not everyone is trying to save as much money as possible as quickly as possible and retire in 10 years. Just realize that this purchase will set you back on retirement or other savings goals since you’ll be paying, per your plan, almost $16k per year for 6 years for a vehicle to get you from point A to B.

[chocolatebear11]

So you’re still in training with student loans and hoping to buy a Tesla as a graduation gift (and pay off over 6 yrs)? I can’t vote for that.

Where did you get the idea that you can possibly deduct a Tesla b/c you’re a partner”? You’ll want to interview CPAs until you find one who gives their blessing to your plan (ie is willing to sign that tax return). Shouldn’t be too difficult, but I can’t vote for that, either.

I realize you’re a new poster and hate to be so harsh, but I also believe you are really getting ahead of yourself so I’m trying to give you a gentle shake .

Thank you for being gentle. I don't have any more student loans to pay.
With a monthly budget of $5,000 with future salary, I would effectively be saving about 75% of my salary (granted life always throws you curve balls so it's always nice to save more).

[chocolatebear11]

How much medical debt are we talking about here? Do you have any student loan debt? What about term and disability insurance? Emergency fund?

Financially, if those other points above are in order, you could probably swing it. Would it be a wise decision? Probably not, but I also can’t criticize. I bought a new luxury SUV before starting my first day as an attending after moving across the country and leaving my 15 year old car behind (because I sold it for less than it would have cost me to transport across the country). 6 years is too long to stretch out a car loan though, so if you can’t make it work with 5 year payments then it’s too much car. It’s also better than asking about buying a new McMansion right out of fellowship before you’ve even started your job.

I disagree with the common sentiment of not buying a car if you can’t pay cash. Not everyone wants to drive a 5+ year old Dodge Durango, and as long as you’re not overstepping your finances in other areas (house, vacations, schools, costly memberships or hobbies, etc) I would be fine with it. I’ll get lambasted on this forum for saying this, but not everyone is trying to save as much money as possible as quickly as possible and retire in 10 years. Just realize that this purchase will set you back on retirement or other savings goals since you’ll be paying, per your plan, almost $16k per year for 6 years for a vehicle to get you from point A to B.

I have had disability insurance since my intern year and was able to lock at a pretty reasonable price. Less than 10k in medical debt. Paid off all student loans. About 1-2 months worth of emergency funds.

This would be my most expensive purchase ever, which is why I am looking to those who are more experienced. Thank you for those who took the time! I do really appreciate it. I've worked since after middle school, but have really limited my expenses to only things I really need.

I should be able to pay it in less than 6 years, but maybe my thinking maybe backwards, but I was going to invest instead of paying all of this debt all at once.

[CordMcNally]

Thank you for being gentle. I don't have any more student loans to pay.
With a monthly budget of $5,000 with future salary, I would effectively be saving about 75% of my salary (granted life always throws you curve balls so it's always nice to save more).

I don't know about you but I don't consider taxes being in the 'money saved' category.

[Timparsons952]

Thank you for being gentle. I don't have any more student loans to pay.
With a monthly budget of $5,000 with future salary, I would effectively be saving about 75% of my salary (granted life always throws you curve balls so it's always nice to save more).

If on 300k gross salary you max a 401k and HSA your take home is going to be like 10-12k monthly. So then ur saving 50% after tax income— that is great but doesn’t leave a lot of wiggle room for a big family, one time expenses etc.

And family of 6 living on 5k / mo while certainly doable does not seem in line with having a top of the line speciality luxury car in the garage, no? Why not let your wife / kids live a little and drive a brand new Ford instead?

[CordMcNally]

i don’t buy the math. If on 300k gross salary you max a 401k and HSA your take home is going to be like 6-7k monthly.

You think he/she is going to owe close to $200k in taxes in a state with no state income tax?

[Nysoz]

As a Tesla shareholder I want as many Tesla’s on the road as possible, but I can’t in good conscience say that your situation allows a model x purchase quite yet.

Save for a couple years and by then the model x will likely have a refresh and the new batteries. Best of both worlds.

[chocolatebear11]

If on 300k gross salary you max a 401k and HSA your take home is going to be like 10-12k monthly. So then ur saving 50% after tax income— that is great but doesn’t leave a lot of wiggle room for a big family, one time expenses etc.

And family of 6 living on 5k / mo while certainly doable does not seem in line with having a top of the line speciality luxury car in the garage, no? Why not let your wife / kids live a little and drive a brand new Ford instead?

Thank you for thoughts. This is why I think I am missing something from my budgeting. I have been budgeting my last year and as family of 4, I feel like we live pretty comfortably on a monthly income of 5k. The main thing I'm missing in the last year of budgeting is that I have not been saving/investing. But with a monthly income of 10k after investing 50% of after tax income, I am entering a space where I've never been before.