Just Buy It…
Ok, maybe not this minute, but eventually you should buy your dream car. Please put your pitchforks down and continue reading.
Here are a few of the most annoying sentences I read on financial blogs: “…what a dumb way to spend money on that luxury car”, “If that money was invested in the markets over 20 years instead of that (car/boat/etc…) it would be worth…”, “…I feel sorry for that guy/gal in his/her luxury car..”, etc…pretty much any blanket statement that presumes the person who is driving their $100K+ luxury vehicle is either a dummy, in major debt, has payments they cannot afford, etc…really, really bugs me! Really.
For some reason it is OK to make fun of someone who has purchased an expensive car, boat, house, toy – very common theme in the blogosphere. Think before you write. Yes, I’m being blunt here.
How about this scenario?
That person with the luxury car/RV/boat can afford it and is financially on solid ground or FI. They can easily make those payments without jeopardizing their finances. Or, they paid cash for it. Listen I get it, for me someone who spends a significant amount of money on a motor home offends my mind. But that is me. However, I do not for 1 second believe it was a bad investment for that person. If you highly value something that costs a lot of money, I say go for it.
However, there are some guidelines I would have in place before that BIG purchase:
- Have no bad debt (car loans, student loans, credit card debt, lines of credit) – these should all be paid off first.
- Pay cash. It may take you years to save up for that speedboat you want, part of the fun will be the anticipation.
- Have an account that you save money in each month earmarked for that purchase (keep it separate from every other account).
- Only use money (to save) that is left after your living expenses, taxes, savings (minimum 25% of income), insurance, kids education fund, and family vacation fund. For me, it even comes after “date-night” money…simply it is money that won’t influence your life in anyway if you didn’t have it (FU money).
- Buy it used. 2-3 years old is best bang for your buck…plus your level of happiness will be NO different than if it was new.
- Have no regrets when you buy it – enjoy it knowing that the purchase had no significance on your financial life (if you think you will regret it, you are not ready, please re-read the list above).
- Don’t buy thinking it will increase your overall happiness in life…it likely won’t, BUT it will increase your fun.
I still haven’t yet purchased my dream car – yet. I will someday and I’m not even a ‘car guy’. However it is something I’ve yearned for since I was 10. And, it’s the only material thing on my vision board I don’t yet have. I’m patient and the king of delayed gratification.
The main reasons I haven’t yet purchased this piece of artful engineering is because of these reasons –
- I still have more real estate I want to buy in the next 2 years. I am currently saving for down payments.
- Young kids! I won’t be able to drive it as much as I’d like at this point. But boy will date night be that much more fun when I get it! The location of date night will be chosen by “distance needed to drive.”
- My kids education are still not fully funded yet.
- I haven’t had a mid-life crisis yet.
If you are strictly a numbers guy, head over to Financial Samurai and take a look at this post. While useful, it doesn’t consider your personal circumstances but does provide some good guidelines…and according to the chart, I should never buy a 911 because my income will likely never be close to $1,000,000!
I like this post much better because considers your net worth. I qualify for my dream car and beyond using this formula, but I still fail on my 4 reasons above, so I continue to practice delayed gratification.
Everything you read about purchasing a “toy” in the blogosphere of finance is usually negative. When you are ready…go for it, I know I will be.
What is preventing you from buying your dream “toy”?