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And it’s amazing how many inadvertently do the exact opposite
Financial tip of the day
- Thread starter GON
- Start date
100% agreed.
You cant take it with you.
Some would argue that your stuff could go to your kids, to help them along and make their life easier\better. I see no evidence of that to be the case. Nor do I see the correlation between easier and better.
Enough to survive?
Or enough to live?
They’re not exactly the same…living would imply enjoying life.
So, that’s more in line with my goal - enough to enjoy life.
Not mere survival.
I find the premise implied in the thread title to be questionable.
One might just as well ask whether one's net worth declines when they walk out of the hardware store with a new hammer.
A car is a tool and it's bought to use as a personal transportation appliance to take us to our work as well as to our library, our theater, our shopping and to visit relatives and friends.
One might just as well ask whether one's net worth declines when they walk out of the hardware store with a new hammer.
A car is a tool and it's bought to use as a personal transportation appliance to take us to our work as well as to our library, our theater, our shopping and to visit relatives and friends.
GON
$150 Site Donor 2025
First and foremost, this thread is in the humor section and is meant to be thought provoking that buying a new car may be a losing financial proposition. Of course, buying a new car might be a very good move, regardless of immediate vehicle depreciation.
Thile below linked article, although written for a business, describes capital expenses as generally accepted accounting principle.
A single hammer is generally not identified as a reportable/ accountable asset, in cases such as a bankruptcy, etc. A motor vehicle generally is identified as a reportable asset in a bankruptcy, net worth review, etc.
And exception to a single item being valued is if that single item is in aggregate with other items. A homeowners craftsman tool set likely is not valued as part of assets. A professional automotive technician's snap on tool collection is likely to be part of a net worth assessment, bankruptcy filing, etc.
Further, a single hammer even if used in trades can be written off as a full expense in a single tax year. A new vehicle is typically depreciated over numerous years and is accounted for by the business accordingly.
To simply things, a new car purchased through Costco is valued as part of a person's net worth. A hord of toilet paper purchased at Costco likely is not considered as part of a person's net worth.
https://www.investopedia.com/terms/c/capitalexpenditure.asp
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When you drive out of the dealership lot and you hear "kachunk" and the car touches the road.
That was about $12,000 of loss right there.
You plant Stupid you get a crop of Desperate. New cars are a way to lose a lot of money.
Especially with interest rates where they're at. I have an 800 freaking FICO score and the only way to get much below 4% would be to do manufacturer financing, where they just steal it out of some other pocket, like taking a rebate from you that you don't get now.
Bank loan? 5-7% depending on where I ask. That's not cheap. Most people are getting worse. I see people out there financing new trucks and they've got 17% interest. Oh yeah, someone will give you money, but you'd have to be stupid to sign for it.
My ex who moved to Seattle bought a Prius and it's caused missed rent payments, between that and eating out all the time. I'm like "I told you. I told you. I'm not responsible for you now and I still tried to tell you you'd regret that Prius."
The freaking car insurance people are almost as bad as the loan. You want your car insurance to more than triple, get a new car.
Live below your means, not above them. I'm like Ben Stein. I have a million credit cards and you don't even want to know what my wallet looks like. I opt sort them by rewards structures and I never pay interest.
They told Stein "We hate you people. We call you deadbeats. There's no way to make any money off of you."
I make thousands of credit cards every year just paying my bills. I even have one for rent that Wells Fargo lost a boatload of money on me with. They don't like the BILT card. It attracted too many people like me that went "Cool, free money for paying rent." who don't run deficits. American Express paid for us to stay at the Waldorf Astoria while I was down in Chicago over my spouse's naturalization interview and oath ceremony and we had a killer room with a nice view.
The really cool part about credit card rewards money is you don't pay taxes on it. How many sources of income do you not owe taxes on? They send me like $50 a month just for buying groceries.
When I fill up my gas tank, I get 5% of the cost back immediately.
When I have non-category spending, I get 3%.
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It depends on your State's bankruptcy exemptions.
In Illinois, you can only exempt $4,000 of car equity without dipping into part of your wildcard allotment.
That's not a lot, so basically the only people who are safe are people who drive old cars that aren't worth much more than the exemption.
You might get away with a $6000-8000 car without using anything more than the $4000 exemption because the Trustee has to subtract the exemption and figure out if he'd make significant money after having it towed off, store, prepped, and auctioned.
You're also safe if you owe more on a car loan than the car is worth, or if you owe less than the car is worth but the equity doesn't far exceed $4,000.
You're generally in the most danger of the Trustee if you have to file bankruptcy right after you pay off the car.
Well, now you're getting into what the utility value is.
If you paid significantly more than the utility value of the car, then you didn't get a good deal on the car.
You lose so much money over the first 5 years of owning a new car that you could have just driven a beater that didn't look too good that you picked up for a tenth that price and got the same utility value out of, and you'll be money ahead.
I've known a lot of everyday rich people, and some people who have a good head on their shoulders. Millionaires almost never drive new cars. It's usually a something like a 4-5 year old Honda that they picked up used. Why is that? They don't like losing money. They didn't become a millionaire by taking $50,000 and turning it into $15,000 every five years or so.
They go get something that's not exciting, but is reliable, that has the latest safety features and such, that someone else already lost most of the money with.
On the flip side, you have broke posers like my sister in law and her husband, who have a BMW, a Jeep, and a Ford Mustang. They bought all of them new, there's usually something wrong with all of them, and they have at least 9 maxed out credit cards and almost lost their house because of this circus they have going on over there. But they go on $8,000 trips sometimes.
Then they can't figure out why they're poorer than me despite working 70 hour weeks each.
I don't have any debts, baby.
We don't even go to the movies or have streaming apps. There's a library a block down the street. The entire county is on one system and they have almost all the stuff I want to see on disc. I have prepaid cell phones with 5 GB data plans and we run for the nearest wifi.
I loved "The Millionaire Next Door". Anyway, I think my favorite part of personal finance is that you start buying things to compete with whoever the neighbors are. If you live in a crappy neighborhood, you don't mind driving a beater car, but once you move into a subdivision, you're going to feel inadequate and you'll run out and get a car payment. Things like that.
If people around you are wearing designer clothes, suddenly you may not feel dressed up enough in your $50 jeans.
One of my former associates had over $6 million in net worth. Between real estate, bank balances, everything. He told me that years back. He'd pull up wearing jeans and driving a 1995 Ford pickup that was almost 20 years old then.
He leased a Cadillac using his business, but he never drove it except for business. I said, "Why do you have it?" He said, "If I show up to try to sell someone a house driving my truck they're not going to buy anything from me.
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I had to get 2 dozen brown organic yesterday (regular white all gone) and it was over $8.49. I spent at least $2 more than if I had gotten them 1 week ago. I'm so upset I'm not even going to watch the Super Bowl. I know I'm taking it to the extreme but it's all about net worth
Interesting.
It's like this-there is new car envy on this Forum by some-not all guys who post have this disease. They can't afford one-so Nobody else needs one either. Nobody, nobody buys a new car because it's a good financial decision. IF you do-you have been under a rock for the last 100plus years.
BTW-prior to the "C" thing-trucks were pretty much exempt from any major depreciation.
Me personally-if you can afford otherwise life is far too short to drive a beater Crown Vic or an Accord with 300,000 plus miles.
BTW-the "new car thing" is a perpetual thread on this forum. It's as stale today as it was 5 years ago.
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Last pair of cars I bought were $28k and $21k respectively. What $3k car am I going to buy that I can drive 25k/yr and be ahead in?
I did that about 10 years ago. It was great. Would love to do that again. But it's not that easy. Heck I'll lose like $1k just on a flight and hotel rooms flying to someplace where I can find a rustfree car.
All depends on your definition. I'm not talking about ham sandwiches living in a tent. I do mean comfortable, I sort of thought that was implied if you also had a savings. Vacations/travel is a must for a good life. I would like to have a yacht but it's not really a life goal is more what I was getting at.
A corollary is do not get tax advice off BITOG.com.A stock broker and financial advisor years ago told me,, the best tip is to not take a tip from anyone!
Especially car dealerships
The problem with tax advice, investing advice, and, yeah, oil advice, is that we don’t moderate content.
So, folks are free to espouse their erroneous opinions, stupid ideas, crackpot theories and demonstrate to the world their actual ignorance without restriction, but it is up to the reader to sift through that noise and find the informed opinions, good ideas, and helpful explanation.
My financial tip of the day is to marry up.
I think my FIL said that with disdain to my wife.
While I was standing there
Great motivation!
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I don't think that has ever been mentioned on a "anti new car" thread!
At least that comment is new and not an old one or combo rehash of comments made before.
That works, if both partners cooperate and they're good with money.
More often you end up bailing the water out as fast as the other one is bringing it on, rowing in opposite directions, fighting about everything, and watching the other one cheat on you.
I didn't fail 6 times, I I learned 6 different lessons about how to do better eventually. The secret is never ever settling for someone who is not your equal. And frankly, one of my exes shot a person, and another seems to get caught with meth about 4-6 months later, again, every time they let them out of prison. I have never shot a person, or used drugs. So I was not thinking clearly at the time, obviously. But I'm a big enough guy to admit my mistakes.
It was Indiana though. I lost a lot of good years in Indiana. Now I'm just some guy from Chicago. Gave up on Americans. Too many are like that. Everyone I know from the Philippines has been super nice.
