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  • Too Frugal? - New Car

    Hi all,

    I've always wanted a sports car (70-80k MSRP) and thought of making it a treat to myself when I would be able to afford it.
    I'm struggling to justify getting the car because of 0 need for it. I'm 1 year out of residency working in major northeast city with plenty of public transportation/walkability.
    Work is a 20 min walk and in bad weather ride sharing is available typically in less than 5 minutes for a short commute.
    Added benefits = 0 stress of parking/accidents/repairs/insurance/parking ($350/month).

    Lease - $800-900/mo + parking $350/mo + Gas + Insurance = ~ $1500
    Ride share daily RT $12x2x30 = $720

    Annual - ~400k and no loans.
    I'm in my early 30's and no dependents.
    The question is - just splurge and enjoy it or continue to aggressively save and follow the math/numbers

  • #2
    General rule of thumb is save 20% towards retirement then spend the rest on whatever you want.

    Do you want to fire? Save more and invest

    Do you not mind working? Run the numbers to see if you can afford to splurge and enjoy it. Even if you didn’t like it, you could just get rid of it and consider it an expensive lesson learned.

    Another option is to just rent or turo the car whenever you felt the urge to drive it. Possibly cheaper to just scratch that itch from time to time.

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    • #3
      Originally posted by Nysoz View Post
      General rule of thumb is save 20% towards retirement then spend the rest on whatever you want.

      Another option is to just rent or turo the car whenever you felt the urge to drive it. Possibly cheaper to just scratch that itch from time to time.
      This. Turo/Rent - no need to 'own' since what's the point of eye candy if you're not using/seeing it 98% of the time?

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      • #4
        no

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        • #5
          No student loans? Then as long as 20% goes to retirement and you’ve saved up enough to buy it outright you can go ahead. But especially if you’re in a northeast city with good public trans then I think this is a big waste. Might you possibly move within the next 5 years out of the city? Might be better to wait until then

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          • #6
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            Meh. Changed my mind. Since my colleague passed of Covid today I, I figured you only live once. Do whatever you want.

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            • #7
              Originally posted by burritos View Post
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              Meh. Changed my mind. Since my colleague passed of Covid today I, I figured you only live once. Do whatever you want.
              I'm very sorry for your loss. The psychological strain healthcare providers are and will continue to experience is under appreciated in my opinion.

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              • #8
                I mean, you can afford it, for sure.

                Don’t know why you’d lease though.

                Im in a somewhat similar situation. A couple years out of training, make less. In a city where you have to have a car. I have a reliable sedan with 50k miles on it. Being a couple years out, I certainly can afford to upgrade to a luxury car or nice truck. I just keep coming back to “am I really going to spend 80k on a vehicle???”

                I don’t think it would make me 80k happier than my current car. I don’t know that I’m going to FIRE, but that would likely delay me by a year if I am going to.

                I think I’ll probably reconsider when the house is paid off, i’ll get something nice. (I know, I know - paying off the house is the “wrong” decision, but it would make me feel better and lowers our FI number drastically).

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                • #9
                  In most major northeast cities you can’t really enjoy driving the sports car the way it is meant to perform anyway. Spend the money on a trip to Germany and rent one to drive on the Autobahn. If you continue to really want one to drive around in traffic you can buy one in a decade or so when dropping 100k on a car doesn’t make any difference for you.

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                  • #10
                    Do you have an adequate emergency fund? A good start on retirement savings? Disability insurance? A habit of putting adequate money away every month?

                    If savings and investing are all on track, do whatever you want with the rest. Buy a Porsche, travel the world, donate to charity, whatever….

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                    • #11
                      Originally posted by Confused View Post
                      Hi all,

                      I've always wanted a sports car (70-80k MSRP)

                      I'm 1 year out of residency
                      Developing expensive taste 1 year out of residency does not bode well, even if you have no loans. Do you have a house or planning to get one?


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                      • #12
                        Originally posted by burritos View Post
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                        Meh. Changed my mind. Since my colleague passed of Covid today I, I figured you only live once. Do whatever you want.
                        Oh, me. Io am so so sorry to hear that - my condolences to you, the family, and all others who knew him/her. Puts these things in perspective a bit.
                        Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                        • #13
                          Rent one for a month and see if it’s something you still enjoy. I’ve got a sports car that I drove less than 30 miles in the last 12 months. I still enjoy it but life can sometimes make it difficult. It mainly sits in the garage under a cover and on a battery tender.

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                          • #14
                            Originally posted by Kamban View Post

                            Developing expensive taste 1 year out of residency does not bode well, even if you have no loans. Do you have a house or planning to get one?

                            very good take.

                            build the muscles of frugality before you start justifying splurges.

                            400k is a lot of money but 80k is still a lot of car.

                            you can probably get 90% of what you want here for half the money.

                            we are older, make more money, and have less money tied up in cars. and we are not particularly frugal.

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                            • #15
                              Sure but only if and when you can pay for it in cash and after putting away the requisite amount towards wealth building, getting an e fund, disability, etc. WCI recommends this as well.

                              Don’t take out a large loan on a new, depreciating asset one year after training. Aside from making sense financially, saving up the cash will make you appreciate the purchase and help you answer your own question as to whether or not it’s literally “worth it.

                              For myself, I’m a car person. A few years after starting practice, and after we had a solid financial footing with the above, and after I saw we could meet our savings goals for the year, I paid for a sports car in cash. No regrets.

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