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  1. #1
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    More Financial Advice: Skimp or Splurge - Millionaire's Car

    The Dave Ramsey thread reminded me of this article a read a few weeks back that really hits home. It was a good reminder to me whenever I start thinking about selling my ’99 Ford Ranger (which is often) for something nicer and newer.

    Really appreciate the bolded sentence...

    Skimp or Splurge - Millionaire's Car

    We live in a very nice neighborhood where the houses and yards are well-tended, and new, shiny luxury cars are parked in most of the garages. I'm proud to say that in our garage are two of the least impressive cars in the neighborhood - an eight year old Pontiac and 11 year old Ford. Why do we skimp? Because doing so pays handsomely, and by handsomely I mean to the tune of $1.9 million dollars.

    …if you are concerned about your financial well-being, skimping on a car is the single most important thing you can do to cut expenditures without giving up a single economic good since you can still go anywhere you'd like. You need only give up the psychological value of status and, if you can reframe your view of psychological value, you may be even better off there too
    .
    Read more:
    http://www.cbsnews.com/8301-505123_162-37741705/skimp-or-splurge---millionaires-car/


    CCG

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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    Amen....one of the worst hings we've done to ourselves, collectively, as a country, is to buy into the notion that a vehicle is something more than a tool for travelling. Model years didn't always exist. They were created when the market was close to saturation (most people who wanted/could afford a car had one) in order to drive more demand from people feeling like their car was out of date.



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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    yeah...when my wife and I were first married, student loans, renting apartment, we were carrying two car loans on two new cars.

    Kids.

    live and learn.


    CCG

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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    My dad always said vehicles are not good investments. :-)

    One of the wealthiest men I've ever known drives a Buick. 1 in 10 millionaires drive a ford truck. Many of the wealthy people I know, don't like to draw attention to themselves, and often opt for the infiniti, acura, lexus brands because of that.



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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    Quote Originally Posted by twistedredbird View Post
    My dad always said vehicles are not good investments. :-)

    One of the wealthiest men I've ever known drives a Buick. 1 in 10 millionaires drive a ford truck. Many of the wealthy people I know, don't like to draw attention to themselves, and often opt for the infiniti, acura, lexus brands because of that.
    Confused by this sentence. Do you mean "opt out of getting"?


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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    The cool part about my marriage is that both my wife and I are simple people. Don't need the fanciest anything. It makes it easy to save money, as a lot of times we have extra, and just plain don't have anything we want.



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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    Quote Originally Posted by capitalcityguy View Post
    Confused by this sentence. Do you mean "opt out of getting"?

    As opposed to BMW, Mercedes, Maybach, Rolls Royce. The 3 mentioned aren't truly luxury brands, but are marketed as such.



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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    Quote Originally Posted by 00clone View Post
    As opposed to BMW, Mercedes, Maybach, Rolls Royce. The 3 mentioned aren't truly luxury brands, but are marketed as such.
    OK...thanks. Just shows that I can't afford to run with that crowd. I can't even tell when they're being modest! ;)


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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    Quote Originally Posted by capitalcityguy View Post
    OK...thanks. Just shows that I can't afford to run with that crowd. I can't even tell when they're being modest! ;)

    Me either, but I've heard that before.



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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    Quote Originally Posted by twistedredbird View Post
    My dad always said vehicles are not good investments. :-)

    One of the wealthiest men I've ever known drives a Buick. 1 in 10 millionaires drive a ford truck. Many of the wealthy people I know, don't like to draw attention to themselves, and often opt for the infiniti, acura, lexus brands because of that.

    I wonder how many of those 10% are farmers or ranchers. There are a lot of farmers who are aren't doing much more than getting by but are millionaires on paper because of their assets that are tied up in land and machinery or livestock facilities and livestock.

    Be that as it may, one of the first things my dad told me about new cars when I was nothing but a little kid was that the most expensive drive you will ever take is off the dealer's lot.


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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    luxury is different for everyone based on their social circles and expectations. that's why starbucks is so popular. everyone knows is super expensive to buy coffee like that but their customers feel like that daily coffee is a form of luxury in their lives they can afford. Some cousins of mine go to Adventureland for their annual family vacation because that's nice to them. For my wife and I, going to Vegas once per year (while staying in a cheap hotel and not going to clubs) is one of our luxuries. For others Vegas is dumb and they go to Europe each summer, etc.

    My dad told me one of the greatest benefits he ever got while working was a company car for his 41(?) years there. He added up all those years of no insurance, no maintenance costs, no gas, and it was insane how much it allowed him to save. One time he bought my mom a minivan without a CD player. I asked him why no CD player and he said "we don't listen to music so it's $300 wasted". This is a man who can afford his dream car of a 1967 Corvette but is turned off paying extra monthly insurance. He says "I can just look at it online for cheaper".

    Unfortunately I didn't get my money mentality from him - I want a new car for the hell of it.



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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    Some people like fine dining, expensive vacations, kids, fancy houses, fancy clothes,etc

    I like cars. I usually buy used and I tend to buy cars that hold their value. If I break it down, I probably loose $3k-$5k/year for the love of cars. I feel a lot worse that I spend $1,600/year on a freaking cell phone plan for my wife and myself. If I thought I wasn't saving enough for retirement or putting myself in a bad spot then I would buy cheaper cars.



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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    Quote Originally Posted by dmclone View Post
    Some people like fine dining, expensive vacations, kids, fancy houses, fancy clothes,etc

    I like cars. I usually buy used and I tend to buy cars that hold their value. If I break it down, I probably loose $3k-$5k/year for the love of cars. I feel a lot worse that I spend $1,600/year on a freaking cell phone plan for my wife and myself. If I thought I wasn't saving enough for retirement or putting myself in a bad spot then I would buy cheaper cars.
    This.

    Everyone has different tastes and things that make them happy. What is important to one person is waste to another, and vice versa. It can cost a lot, but value is not only be measured by dollars and cents. If you are in massive debt, and struggling to make it paycheck to paycheck, then owning a brand new car might be an unnecessary extravagance, but if you're sitting well financially, and you buy that BMW, not because you see it as a tool to get from point A to point B, but because you enjoy it and like driving it, why is that such horrible thing?


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  14. #14
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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    Quote Originally Posted by dmclone View Post
    Some people like fine dining, expensive vacations, kids, fancy houses, fancy clothes,etc

    I like cars. I usually buy used and I tend to buy cars that hold their value. If I break it down, I probably loose $3k-$5k/year for the love of cars. I feel a lot worse that I spend $1,600/year on a freaking cell phone plan for my wife and myself. If I thought I wasn't saving enough for retirement or putting myself in a bad spot then I would buy cheaper cars.
    I think we all like cars, but I think you're somwhat missing the point of the article by putting them on the same level asr some of the other things (e.g...kids) you seemed to list as equavalents. A car can be substituted much easier than some of the other things you listed. Again:

    skimping on a car is the single most important thing you can do to cut expenditures without giving up a single economic good since you can still go anywhere you'd like. You need only give up the psychological value of status and, if you can reframe your view of psychological value, you may be even better off there too


    CCG

  15. #15
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    Re: More Financial Advice: Skimp or Splurge - Millionaire's Car

    ^^ you can make the same mistake with a house, but traditionally at least those tend to go up in value.


    CCG

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