well, Sarah's new car 6 years after could be new, without a loan and money left in the bank. For Sam the cycle continues.
Financial graphic comparison of buying a new or used car
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well, Sarah's new car 6 years after could be new, without a loan and money left in the bank. For Sam the cycle continues.
A common expression among doctors is "if I need more money I'll just put in a few more hours." or "income is the most easily adjusted variable" or something similar.
And that my friend is how they end up broke after making big money and spending big for their whole career. If you don't think this is true you don't know many doctors.
Machinists are the same exact way. I do not understand how half these guys are borderline begging for change, I know what they make and how much they work.
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I'm old. My wants and needs have changed over the years. If you're young and have the means then buy what you want. As you age your wants and needs will change and you'll no longer want that Z-28 or that beach house or that weekend with the Swedish bikini team.
Life's not about dying with the most money in the bank. Life is about... life. Live it and enjoy it. It doesn't last forever.
Life's not about dying with the most money in the bank. Life is about... life. Live it and enjoy it. It doesn't last forever.
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I don't buy cars often, every 15 years or so and the 2025 is only my 4th new in my life. That's how I justify losing likely $10k+ driving a new vehicle off the lot.
I have always assumed leasing gets a person more car for their money, helps to get a car they might not otherwise afford.
Just punching it into the GM website, the car we're purchasing is $1,750/mo. to lease. that sounds so stupid I can't even believe it. Again, I assumed leasing allows a person to get a car they might not be able to afford. I can't afford and would never spend $1,750/mo for any car. So for kicks I looked at the Equinox on the website. That's in the $500's to lease. Where is this you get more car by leasing? That's outrageous.
I decided not to pay cash for the vehicle, and we will have a car payment of around $400/mo.
Hey, my wife took over the health care in 2023, that today is about $1,100/mo if from my employer, so I know I can afford $400. What's laughable is I saw what she pays when we went over it since it's not passive enrollment. I said man imagine if that were taken out of my check every 2 weeks, it's a joke how little. Then, I realized that's not bi-weekly, that was a monthly number. That's what happens when an employer pays 89%.
I'm simply hedging on the market. The funds are coming out of the market so we don't have to touch one penny of savings....that's me. I don't use leverage btw.
And, this purchase was not planned, it came out of nowhere (lost the Enclave). I was planning on doing this next year or the year after, but that's fate. But we're lucky to have 3 cars, so we can order the new one and wait.
I have always assumed leasing gets a person more car for their money, helps to get a car they might not otherwise afford.
Just punching it into the GM website, the car we're purchasing is $1,750/mo. to lease. that sounds so stupid I can't even believe it. Again, I assumed leasing allows a person to get a car they might not be able to afford. I can't afford and would never spend $1,750/mo for any car. So for kicks I looked at the Equinox on the website. That's in the $500's to lease. Where is this you get more car by leasing? That's outrageous.
I decided not to pay cash for the vehicle, and we will have a car payment of around $400/mo.
Hey, my wife took over the health care in 2023, that today is about $1,100/mo if from my employer, so I know I can afford $400. What's laughable is I saw what she pays when we went over it since it's not passive enrollment. I said man imagine if that were taken out of my check every 2 weeks, it's a joke how little. Then, I realized that's not bi-weekly, that was a monthly number. That's what happens when an employer pays 89%.
I'm simply hedging on the market. The funds are coming out of the market so we don't have to touch one penny of savings....that's me. I don't use leverage btw.
And, this purchase was not planned, it came out of nowhere (lost the Enclave). I was planning on doing this next year or the year after, but that's fate. But we're lucky to have 3 cars, so we can order the new one and wait.
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I'm starting to realize what you say, and to believe it. Since through no action of our own, we lost a vehicle. What then? Do we do what many would, and say, let's just get that tiny car with a 10k mile/yr lease it's $549/mo and the cheapest I can find? And worry about it 3 years from now?
Or do we say, the new Tahoe has to come early now and we'll have to possibly sell some mutual funds to pay for it. I, myself, would rather sell mutual funds than touch savings, that's me. Savings is only earning 3.6%, but it's savings.
When we pass away, our money goes to heirs, charity, and taxing authorities. So they will get less, if we spend today. Should they? Well, if it's heirs, they need to do something too to help themselves today and tomorrow, as we are trying to help them as well.
In 1997 I likely would have wanted that Swedish bikini team you mention, but not today. I went there in 1997 (Stockholm and Oslo) and have never been back.
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The graphic is oversimplified, but it's a good point. Be careful about wrapping up your cash flow in a vehicle.
The other point i always say is people throw around $5k-$10k upgrades on cars. Lariat is only $9k more than XLT, sport is just $5k more, etc. The brand new one is only $5k more. Not realizing that your talking about what amounts to YEARS of payments.
I feel like people's view of alot of money can pretty distorted sometimes.
Most people's total lifetime income will be below $2 million. You can't afford to blow 5% of that on a car.
The other point i always say is people throw around $5k-$10k upgrades on cars. Lariat is only $9k more than XLT, sport is just $5k more, etc. The brand new one is only $5k more. Not realizing that your talking about what amounts to YEARS of payments.
I feel like people's view of alot of money can pretty distorted sometimes.
Most people's total lifetime income will be below $2 million. You can't afford to blow 5% of that on a car.
Sam's going to be dating Sarah's hot roommate and riding around in his $80k car. 
and it's not just a one time thing.... it'll happen every few years for a lot of people
This is a little different perspective however I bought a beautiful 69 Corvette when I was 21 and could barely afford the payments. The car was a much larger enjoyment to me than having a used one today or even a brand new one. Sometimes people buy vehicles when they are young and just want the thrill of owning something they believe is really nice. I think moderation is the key to being happy with your finances as well as your personal possessions. I do like the theory of trying to keep people living within their means as well as saving money for the future. All in all a great little comparison you showed us there GON!
Who buys $80k cars? And $10k used cars are abused money pits unless you are able to DIY.
I have done well buying modestly priced new cars and keeping them forever. My kid drives my 2008 xterra I bought new.
I have done well buying modestly priced new cars and keeping them forever. My kid drives my 2008 xterra I bought new.
The only thing that keeps people above poverty line from slowly building wealth is wants not needs.
The steps are not hard just the emotions.
The steps are not hard just the emotions.
Sam had that for a car - so, clearly, she had that for the investment. This is a new car vs. used car comparison. If you have the money for that new car payment, then you have the same money no matter how it’s used.;
What I don’t like about the comparison - it completely ignores the maintenance cost on the used car.
That’s a significant number, particularly if you’re paying somebody else to do the maintenance.
Now, let’s take a person who decides to buy a new car, and it’s X/month.
If they’re putting 5X into mutual funds, then, really, who cares how much the car costs?
It is common among many high paid professionals.
“People don’t plan to fail - but they do fail to plan.” - My Dad, decades ago.
I assure you that the young docs in my family understand money. Both drive used Volvos that Dad gave them, of course, no car payment, but they are already financially savvy and the older one, while still a resident (modest income, servicing med school debt) is already an investor, putting money away for the future, and driving a 23 year old used Volvo.
$10k cars can have carfax history of dealership maintenance first 100k or so miles then show regular maintenance somewhere . I bought a $4500 13 RDX with 159k scuffs on body and had to drop $800 to make inspectable (headlight component, turn signal mirror, leaking lots oil on to drive belts) with that kind of history. Commuted 6k with it and comfortable 50 miles each way 10 days / month .
You need to have $2k -$4k liquid to repair your $10k car. If not buy newer.
"Live within your means"
I will point out that borrowing money to start out can be very helpful if used wisely and not overspending. Obviously, spending 80k on a new vehicle should be for the middle income or higher bracket. Wise to spend like Sarah and get a lower priced vehicle at first & once you reach some good savings milestones you could always trade-in for something a little better while still maintaining a good balance.
But let's be perfectly clear... a 10k vehicle would be quite the minimum in today's dollars for something halfway reliable. One thing I've learned over 35+ vehicles is that typically the more money I spent the better shape & reliable the vehicle was. I don't buy like I used to and try to keep them much longer now. I think most of that decision lies in owning decent shape vehicles & a desire to have money in savings.
I'm not afraid of having to maintain & repair a vehicle like some folks although there is a fine line of shape of vehicle. You see my sig, these are not new, never bought new, & probably will never buy new. I have enough to buy new but why? I don't need to. I like to look at other vehicles but I must have discipline to keep money. I will also point out that savings no matter how small gets harder the lower income you are..I've been there, done that, & that's no revelation for many here.
I do have a small mortgage left over a 10 yr note & payments are only $113.09 a month. I will never get another mortgage again & will die in the house my grandparents bought in the 80's. That $113.09 loan was one of several loans that was helpful to get the house in order but will certainly help lower cost in savings or even spending in the future. I got in at the right time at 2.5% interest so it's not an issue for me to ride out the 10 years. I have 6.5 years left on it though.
It's been really awesome to have enough to feel secure & expenses like car repairs or the washer going out would be covered in full with 0 problems. Speaking of which I spent over $2k for washer/dryer combo this year. Never thought I'd ever do something like that but 5 year warranty & having some nice common appliances was appealing to me. Currently on a family vacation & am having fun I've not really had in a long time. Creating memories is the best money spent.
I will point out that borrowing money to start out can be very helpful if used wisely and not overspending. Obviously, spending 80k on a new vehicle should be for the middle income or higher bracket. Wise to spend like Sarah and get a lower priced vehicle at first & once you reach some good savings milestones you could always trade-in for something a little better while still maintaining a good balance.
But let's be perfectly clear... a 10k vehicle would be quite the minimum in today's dollars for something halfway reliable. One thing I've learned over 35+ vehicles is that typically the more money I spent the better shape & reliable the vehicle was. I don't buy like I used to and try to keep them much longer now. I think most of that decision lies in owning decent shape vehicles & a desire to have money in savings.
I'm not afraid of having to maintain & repair a vehicle like some folks although there is a fine line of shape of vehicle. You see my sig, these are not new, never bought new, & probably will never buy new. I have enough to buy new but why? I don't need to. I like to look at other vehicles but I must have discipline to keep money. I will also point out that savings no matter how small gets harder the lower income you are..I've been there, done that, & that's no revelation for many here.
I do have a small mortgage left over a 10 yr note & payments are only $113.09 a month. I will never get another mortgage again & will die in the house my grandparents bought in the 80's. That $113.09 loan was one of several loans that was helpful to get the house in order but will certainly help lower cost in savings or even spending in the future. I got in at the right time at 2.5% interest so it's not an issue for me to ride out the 10 years. I have 6.5 years left on it though.
It's been really awesome to have enough to feel secure & expenses like car repairs or the washer going out would be covered in full with 0 problems. Speaking of which I spent over $2k for washer/dryer combo this year. Never thought I'd ever do something like that but 5 year warranty & having some nice common appliances was appealing to me. Currently on a family vacation & am having fun I've not really had in a long time. Creating memories is the best money spent.
What’s wrong with an $80,000 car?
I just bought one. Well, $86,000 was the sticker price.
It’s really, and I mean, really, nice.
It is replacing my wife’s 2002 V70XC. She’s earned it.
You can’t determine whether this was an outrageously expensive purchase, or merely another expense, without knowing a person’s income and net worth.
The meme is about people with $10K to their name, so you made my point.
Neighbor to the left has a new X7 and a Porsche. Neighbor 2 doors the other way a M5 and a new Tahoe. I am guessing both paid cash, or if not their arbitraging the money. $10K is rounding error to both.
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And I can state from experience that one can have this dollar-saving/life-quality balance at lower middle income also and still be content with life AND have a decent nest egg. It's just that you do it at lower levels of expectation. My midlife crises was a plastic kayak, not a 22 foot jet boat.
I, too, live life with edyvw's FowVay's attitude* - don't get so deeply caught up in wealth accumulation that life passes you by.
* - excluding Fowvay's comment about the Swedish bikini team (for now).
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Good on you. I've seen young docs who have just completed their residency driving new BMWs. And I've seen old docs (+/- 80 years) who need to work just a little longer because of financial commitments.
Many years ago we were in Ottawa for Canadian Medical Association work and stopped in to see a VP at MD Management (then a branch of the Canadian Medical Association that provided investments and investment advice to physicians and their families). We were a few years into our investment plan and were looking for advice and comments. The VP said we were already in better shape than the "about to retire" surgeon he had just seen who had made big money all his career and not only had no money, he had nothing to sell either (no expensive cars, no farm land, no vacation homes). The money was just gone.
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