A Beater Truck and a FAT 401k...

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Lee_WSP
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Re: A Beater Truck and a FAT 401k...

Post by Lee_WSP »

Any conclusions need to keep in mind that the article only examines middle savers vs lower savers and IIRC only the middle income earners as the top income earners were skewed towards the high saving cohort.
flyfishers83
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Re: A Beater Truck and a FAT 401k...

Post by flyfishers83 »

The vehicle thing gets me from time to time. Somebody mentioned the cost of new trucks. It seems like just about every week I both regret how much we spent on a new truck and enjoy that same new truck. Granted, when we got the new truck, I was moving up from a 16 year old Jeep Cherokee that had no air conditioning for several years. Going from no AC to not only heated and cooled, but also massaging, seats, was a big jump. We're meeting our savings goals and at the time had a house payment that was less than our truck payment, so this week I think we're doing fine with our obscenely expensive truck.
burritoLover
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Re: A Beater Truck and a FAT 401k...

Post by burritoLover »

The crash safety and technology of newer vehicles vastly eclipses that of older vehicles to the point where you might die in a crash in an older vehicle (even one that is only 10 years old) and walk away without a scratch in a newer one. You aren't going to do much spending of your fat 401k if you are dead and guess what is one of the leading causes of death among accumulators?
"it is always wise to expect the unexpected." - John Bogle
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CyclingDuo
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Re: A Beater Truck and a FAT 401k...

Post by CyclingDuo »

burritoLover wrote: Wed Aug 26, 2020 3:50 pm The crash safety and technology of newer vehicles vastly eclipses that of older vehicles to the point where you might die in a crash in an older vehicle (even one that is only 10 years old) and walk away without a scratch in a newer one. You aren't going to do much spending of your fat 401k if you are dead and guess what is one of the leading causes of death among accumulators?
If that’s your motivating factor, then so be it.

I drive the speed limit as well as defensively and would feel just as safe in a 2010 model as a 2020 model. Rolling over in either at 75mph on the freeway isn’t going to make much difference... :twisted:
"Save like a pessimist, invest like an optimist." - Morgan Housel
Chuck107
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Re: A Beater Truck and a FAT 401k...

Post by Chuck107 »

.....
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Alas, I find moderation of this forum too restrictive for my tastes, farewell.
alfaspider
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Re: A Beater Truck and a FAT 401k...

Post by alfaspider »

I hate to say it, but income is going to be a much bigger factor in savings than a vehicle. The difference between driving a "beater truck" and a luxury vehicle is likely no more than $10,000 a year. So someone going from $80k to $100k annual income will make a bigger difference than keeping that old vehicle.

Which is not to discount the virtues of thrift, but to say that no amount of economy can conjure income out of nothingness. If you want big savings, spend effort on increasing your income (to the extent reasonable)- not just thinking about what you can give up .
stoptothink
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Re: A Beater Truck and a FAT 401k...

Post by stoptothink »

CyclingDuo wrote: Wed Aug 26, 2020 4:29 pm
burritoLover wrote: Wed Aug 26, 2020 3:50 pm The crash safety and technology of newer vehicles vastly eclipses that of older vehicles to the point where you might die in a crash in an older vehicle (even one that is only 10 years old) and walk away without a scratch in a newer one. You aren't going to do much spending of your fat 401k if you are dead and guess what is one of the leading causes of death among accumulators?
If that’s your motivating factor, then so be it.

I drive the speed limit as well as defensively and would feel just as safe in a 2010 model as a 2020 model. Rolling over in either at 75mph on the freeway isn’t going to make much difference... :twisted:
Agree. IMO, when you hear people stating they bought a new car because of the new tech increasing their safety, it's a rationalization for wanting a new car. Much the same with buying a larger car than necessary. There are countless more cost-effective ways to decrease your chances of dying or being seriously injured in a car accident then buying a massive SUV or upgrading your car every 5yrs because of tech. If vehicle safety was truly that much of a concern, you'd think finding a different mode of transportation would be high on the list of priorities.
burritoLover
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Re: A Beater Truck and a FAT 401k...

Post by burritoLover »

stoptothink wrote: Wed Aug 26, 2020 4:51 pm Agree. IMO, when you hear people stating they bought a new car because of the new tech increasing their safety, it's a rationalization for wanting a new car. Much the same with buying a larger car than necessary. There are countless more cost-effective ways to decrease your chances of dying or being seriously injured in a car accident then buying a massive SUV or upgrading your car every 5yrs because of tech. If vehicle safety was truly that much of a concern, you'd think finding a different mode of transportation would be high on the list of priorities.
I never said buy a massive SUV instead of your normal vehicle. Take the same car class you drive now (sedan or whatever) and the 10 year newer model will well outperform the older one in crash tests by far. What are the "countless ways to decrease your chance of dying" when a drunk driver runs a red light and slams into you or crosses the center-line of a 2-way highway at the last moment?
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smitcat
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Re: A Beater Truck and a FAT 401k...

Post by smitcat »

burritoLover wrote: Wed Aug 26, 2020 5:02 pm
stoptothink wrote: Wed Aug 26, 2020 4:51 pm Agree. IMO, when you hear people stating they bought a new car because of the new tech increasing their safety, it's a rationalization for wanting a new car. Much the same with buying a larger car than necessary. There are countless more cost-effective ways to decrease your chances of dying or being seriously injured in a car accident then buying a massive SUV or upgrading your car every 5yrs because of tech. If vehicle safety was truly that much of a concern, you'd think finding a different mode of transportation would be high on the list of priorities.
I never said buy a massive SUV instead of your normal vehicle. Take the same car class you drive now (sedan or whatever) and the 10 year newer model will well outperform the older one in crash tests by far. What are the "countless ways to decrease your chance of dying" when a drunk driver runs a red light and slams into you or crosses the center-line of a 2-way highway at the last moment?
"What are the "countless ways to decrease your chance of dying" when a drunk driver runs a red light and slams into you or crosses the center-line of a 2-way highway at the last moment?"
Yes, it is possible - similar accidents happened to us twice within 5 years or so.
smitcat
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Re: A Beater Truck and a FAT 401k...

Post by smitcat »

alfaspider wrote: Wed Aug 26, 2020 4:50 pm I hate to say it, but income is going to be a much bigger factor in savings than a vehicle. The difference between driving a "beater truck" and a luxury vehicle is likely no more than $10,000 a year. So someone going from $80k to $100k annual income will make a bigger difference than keeping that old vehicle.

Which is not to discount the virtues of thrift, but to say that no amount of economy can conjure income out of nothingness. If you want big savings, spend effort on increasing your income (to the extent reasonable)- not just thinking about what you can give up .
Agreed - and if you are handy with a wrench and like cars you can likely own those 'luxury' vehicles that are a few years old for not much more than the beater truck.
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mrspock
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Re: A Beater Truck and a FAT 401k...

Post by mrspock »

Beater truck? Wow, Mr. Moneybags over there.... I have beater car.
Panky
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Re: A Beater Truck and a FAT 401k...

Post by Panky »

tedgeorge wrote: Tue Aug 25, 2020 1:56 pm My desire for nicer cars dwindled exponentially when life became commuting to/from work and battling the never-ending stream of crushed goldfish and melted gummy bears in the back seat. Especially right now when our cars are just sitting there for days with offices closed.

Super happy with my $3000 beater truck. Scratched it taking stuff to the dump. Don't care. Kids play all over it dragging sticks and who knows what else everywhere. Don't care!
I was jumping a neighbor the other day, and backed the truck into a tree since I was paying too much attention to their car and not my truck.
They were super apologetic about it as if I cared about the beater truck - I was more sorry for their tree!
stoptothink
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Re: A Beater Truck and a FAT 401k...

Post by stoptothink »

burritoLover wrote: Wed Aug 26, 2020 5:02 pm
stoptothink wrote: Wed Aug 26, 2020 4:51 pm Agree. IMO, when you hear people stating they bought a new car because of the new tech increasing their safety, it's a rationalization for wanting a new car. Much the same with buying a larger car than necessary. There are countless more cost-effective ways to decrease your chances of dying or being seriously injured in a car accident then buying a massive SUV or upgrading your car every 5yrs because of tech. If vehicle safety was truly that much of a concern, you'd think finding a different mode of transportation would be high on the list of priorities.
What are the "countless ways to decrease your chance of dying" when a drunk driver runs a red light and slams into you or crosses the center-line of a 2-way highway at the last moment?
Considering you statement has nothing to do with what I said, I'm not quite sure what your point is. You really want to decrease your chances of dying in a car accident, decrease how much you drive. It's not my place to judge anybody's vehicle-purchasing decisions (I'm a gearhead myself), but I enjoy a good laugh when people try to rationalize them saying it's all about safety. Nothing wrong with saying you want a new car.
Last edited by stoptothink on Wed Aug 26, 2020 6:35 pm, edited 1 time in total.
burritoLover
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Re: A Beater Truck and a FAT 401k...

Post by burritoLover »

stoptothink wrote: Wed Aug 26, 2020 6:29 pm
burritoLover wrote: Wed Aug 26, 2020 5:02 pm
stoptothink wrote: Wed Aug 26, 2020 4:51 pm Agree. IMO, when you hear people stating they bought a new car because of the new tech increasing their safety, it's a rationalization for wanting a new car. Much the same with buying a larger car than necessary. There are countless more cost-effective ways to decrease your chances of dying or being seriously injured in a car accident then buying a massive SUV or upgrading your car every 5yrs because of tech. If vehicle safety was truly that much of a concern, you'd think finding a different mode of transportation would be high on the list of priorities.
What are the "countless ways to decrease your chance of dying" when a drunk driver runs a red light and slams into you or crosses the center-line of a 2-way highway at the last moment?
Not sure how that is relevant considering it has nothing to do with what I said. You really want to decrease your chances of dying in a car accident, decrease how much you drive.
Umm OK :oops:
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Re: A Beater Truck and a FAT 401k...

Post by bubbadog »

helloeveryone wrote: Tue Aug 25, 2020 8:21 pm
LivinGood wrote: Tue Aug 25, 2020 7:45 pm I’m driving a 2004 Tundra with 107,000 miles. Actually going in for timing belt/ water pump tomorrow . Trying to get another 100,000 out of her. I live in a very HCOL area, so owning here may never be a option. Driving this Tundra into the ground is gonna free up lots of investing capital for me in the coming years. Makes me feel better about not being able to own in a ski town.
This will be very easy. I see used tundras in that year range for sale with 200k-300k miles all the time.
I have a 2001 Toyota Tundra with 217,000 miles. I purchased it new and commute in it every day. I love the old thing and it sure doesn't look like a "beater" to me. It is the perfect size for my needs. I have thought about replacing it but I really don't want one of the newer full size trucks. They have gotten too big and the mid-size trucks are still smaller than the Tundra.
JS-Elcano
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Re: A Beater Truck and a FAT 401k...

Post by JS-Elcano »

I agree with the general gist of the article. My 401k is not "fat" yet, but I hope it's on its way :D since I am doing well on the "reasonable cars" and "reasonable house" front. I bought a house for 60% of what the bank told me "I can afford" on my salary. I am not planning to move. I am in my late 40s and I am only on my third car, all used, all for a total of 32k. (It would have been two cars and 27k had the second one not been totaled by another driver running their car into mine last year.) I love to travel and have a somewhat expensive hobby, so I rather spend my money there than on cars, which I don't particularly care about other than that they are safe and bring me from A to B with good gas milage. I found that I can get very good 3-year old cars that come off a lease and still have 2 year warrantees. My house will be paid off in 4 years, maybe a bit earlier. This coincides very nicely with me being able to pour that :moneybag into catch-up contributions in my pre- and after-tax retirement plans that start at 50 :beer
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Re: A Beater Truck and a FAT 401k...

Post by JS-Elcano »

alfaspider wrote: Wed Aug 26, 2020 4:50 pm I hate to say it, but income is going to be a much bigger factor in savings than a vehicle. The difference between driving a "beater truck" and a luxury vehicle is likely no more than $10,000 a year. So someone going from $80k to $100k annual income will make a bigger difference than keeping that old vehicle.

Which is not to discount the virtues of thrift, but to say that no amount of economy can conjure income out of nothingness. If you want big savings, spend effort on increasing your income (to the extent reasonable)- not just thinking about what you can give up .
But often it is easier to save 10k on a car than change jobs and make 10 k more. While I was happy to change jobs and move from one side of the country to the other in my 20s and 30s there comes a time when you settle down, when you realize (feel?) that the downsides of starting all over at a new job, with new colleagues, new hierarchy, new city, leaving friends, is not worth the 10, 20, 50k in extra income. I think I am at that stage as I have found a great spot to live, great job, wonderful colleagues, and friends. I am not sure if there's any amount of additional salary that would make me move at this point. I rather save by buying used cars and stay in the perfectly fine house that's almost paid off than chase the next job with the (somewhat) higher salary :mrgreen:
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Re: A Beater Truck and a FAT 401k...

Post by Chuck107 »

.....
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stoptothink
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Re: A Beater Truck and a FAT 401k...

Post by stoptothink »

JS-Elcano wrote: Wed Aug 26, 2020 7:04 pm
alfaspider wrote: Wed Aug 26, 2020 4:50 pm I hate to say it, but income is going to be a much bigger factor in savings than a vehicle. The difference between driving a "beater truck" and a luxury vehicle is likely no more than $10,000 a year. So someone going from $80k to $100k annual income will make a bigger difference than keeping that old vehicle.

Which is not to discount the virtues of thrift, but to say that no amount of economy can conjure income out of nothingness. If you want big savings, spend effort on increasing your income (to the extent reasonable)- not just thinking about what you can give up .
But often it is easier to save 10k on a car than change jobs and make 10 k more. While I was happy to change jobs and move from one side of the country to the other in my 20s and 30s there comes a time when you settle down, when you realize (feel?) that the downsides of starting all over at a new job, with new colleagues, new hierarchy, new city, leaving friends, is not worth the 10, 20, 50k in extra income. I think I am at that stage as I have found a great spot to live, great job, wonderful colleagues, and friends. I am not sure if there's any amount of additional salary that would make me move at this point. I rather save by buying used cars and stay in the perfectly fine house that's almost paid off than chase the next job with the (somewhat) higher salary :mrgreen:
In a similar position and I've put my mouth where my money is by turning down two opportunities offering 25%+ more in the last year. Going to take A LOT of money to give up my walking commute (well, no commute for the time being). Fascinating how little I have worried about the latest vehicle safety tech over the last 5.5yrs as I have had no need to drive.
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Re: A Beater Truck and a FAT 401k...

Post by JS-Elcano »

stoptothink wrote: Wed Aug 26, 2020 7:27 pm
JS-Elcano wrote: Wed Aug 26, 2020 7:04 pm
alfaspider wrote: Wed Aug 26, 2020 4:50 pm I hate to say it, but income is going to be a much bigger factor in savings than a vehicle. The difference between driving a "beater truck" and a luxury vehicle is likely no more than $10,000 a year. So someone going from $80k to $100k annual income will make a bigger difference than keeping that old vehicle.

Which is not to discount the virtues of thrift, but to say that no amount of economy can conjure income out of nothingness. If you want big savings, spend effort on increasing your income (to the extent reasonable)- not just thinking about what you can give up .
But often it is easier to save 10k on a car than change jobs and make 10 k more. While I was happy to change jobs and move from one side of the country to the other in my 20s and 30s there comes a time when you settle down, when you realize (feel?) that the downsides of starting all over at a new job, with new colleagues, new hierarchy, new city, leaving friends, is not worth the 10, 20, 50k in extra income. I think I am at that stage as I have found a great spot to live, great job, wonderful colleagues, and friends. I am not sure if there's any amount of additional salary that would make me move at this point. I rather save by buying used cars and stay in the perfectly fine house that's almost paid off than chase the next job with the (somewhat) higher salary :mrgreen:
In a similar position and I've put my mouth where my money is by turning down two opportunities offering 25%+ more in the last year. Going to take A LOT of money to give up my walking commute (well, no commute for the time being). Fascinating how little I have worried about the latest vehicle safety tech over the last 5.5yrs as I have had no need to drive.
:sharebeer You know, it's almost like with a portfolio, "stop playing when you have won the game". Once you have a great job that works at multiple levels (including your walking commute) -- are the risks that come with moving for a few extra $$ really worth it? My answer is more and more a resounding "no". Happy for you that you can walk to your job; I used to be able to do this at my previous job, but now it's a little too far. Still, I can't remember having been in traffic during my 20 min commute in the last 10+ years. So, all is good.
Last edited by JS-Elcano on Wed Aug 26, 2020 8:09 pm, edited 1 time in total.
JS-Elcano
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Re: A Beater Truck and a FAT 401k...

Post by JS-Elcano »

Chuck107 wrote: Wed Aug 26, 2020 7:19 pm
JS-Elcano wrote: Wed Aug 26, 2020 7:04 pm

But often it is easier to save 10k on a car than change jobs and make 10 k more. While I was happy to change jobs and move from one side of the country to the other in my 20s and 30s there comes a time when you settle down, when you realize (feel?) that the downsides of starting all over at a new job, with new colleagues, new hierarchy, new city, leaving friends, is not worth the 10, 20, 50k in extra income. I think I am at that stage as I have found a great spot to live, great job, wonderful colleagues, and friends. I am not sure if there's any amount of additional salary that would make me move at this point. I rather save by buying used cars and stay in the perfectly fine house that's almost paid off than chase the next job with the (somewhat) higher salary :mrgreen:
Careful there JS-Elcano, you are putting personal life preferences above monetary advancements/achievements. :beer
:mrgreen: and I couldn't be happier about it.

I have ventured far in my live, much further than I ever thought possible, and I have recognized the law of diminishing returns, where the benefits of pursuing monetary advancement/achievements are less than what I would have to give up. What I have learned here by reading this forum has enabled me, given me the tools, to chart my course to a save, early retirement that works for my needs without sacrificing the present, without postponing (within reason) my bucket list to some distant future that may never come, or where I am not able to pursue my dreams because of physical or mental impairment. I am not someone who sacrifices to achieve an extreme (financially or professionally) when all I need to live happily and securely is to achieve *enough*. This realization only came with age, but I am glad it came :beer
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Re: A Beater Truck and a FAT 401k...

Post by columbia »

Mrs. columbia already worked from home and I have since March, so having one 10 year old Toyota has worked out fine. Me fending off requests to get some non-essential body work done might or might not be successful, however. 🙂
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Re: A Beater Truck and a FAT 401k...

Post by phil11 »

I have to get to work, to make the money, to contribute to the 401K. While I have an older vehicle, it is not a beater. Everyone saves in different areas.
Also, working shift work, there is a person waiting to go home after 12 hours, and having a POS car is no excuse for not making it in.
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Re: A Beater Truck and a FAT 401k...

Post by sailaway »

phil11 wrote: Thu Aug 27, 2020 10:20 am I have to get to work, to make the money, to contribute to the 401K. While I have an older vehicle, it is not a beater. Everyone saves in different areas.
Also, working shift work, there is a person waiting to go home after 12 hours, and having a POS car is no excuse for not making it in.
To me, a beater is a car that requires a lot of maintenance, which isn't worth the time and hassle, much less the money. My reliable car with bird poop burns and sun damage and worn cloth seats is a workhorse, not a beater.

I think some here are using the term to mean just mean an older car, perhaps with some cosmetic damage.
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Re: A Beater Truck and a FAT 401k...

Post by meowcat »

Wanderingwheelz wrote: Tue Aug 25, 2020 6:25 pm I’m a true Boglehead, with a paid for home and maxed retirement accounts always, but here’s an unpopular opinion.

Buying nice new cars, carefully, IS NOT as harmful to your financial health as many would have you believe. If you are a good negotiator and you’re patient, you can own new cars for not much more than good used ones- often less. I’m FI at 49 and I’ve owned 11 brand new cars (Counting an RV) in the last 10 years. Three were Porsches and one was a BMW. Only one was kept longer than the manufacturers warranty period and that’s the one we bought my daughter when she was 16, she’s now 22.
It depends. Buying new luxury cars and big houses is not the problem. The problem arises when one sacrifices their future financial security to do so. If you can buy a million dollar house, park a couple of Mercedes Benz's in the driveway, send 4 kids to private school and still sock away 40% of your income, go for it.
More people should learn to tell their dollars where to go instead of asking them where they went. | -Roger Babson
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Re: A Beater Truck and a FAT 401k...

Post by Wanderingwheelz »

meowcat wrote: Thu Aug 27, 2020 12:47 pm
Wanderingwheelz wrote: Tue Aug 25, 2020 6:25 pm I’m a true Boglehead, with a paid for home and maxed retirement accounts always, but here’s an unpopular opinion.

Buying nice new cars, carefully, IS NOT as harmful to your financial health as many would have you believe. If you are a good negotiator and you’re patient, you can own new cars for not much more than good used ones- often less. I’m FI at 49 and I’ve owned 11 brand new cars (Counting an RV) in the last 10 years. Three were Porsches and one was a BMW. Only one was kept longer than the manufacturers warranty period and that’s the one we bought my daughter when she was 16, she’s now 22.
It depends. Buying new luxury cars and big houses is not the problem. The problem arises when one sacrifices their future financial security to do so. If you can buy a million dollar house, park a couple of Mercedes Benz's in the driveway, send 4 kids to private school and still sock away 40% of your income, go for it.
There are a lot of Bogleheads driving old cars who can easily afford to drive newer cars.

Once you favor in not having to pay for repairs and maintenance, owning newer cars that are bought right is a wider decision than many people believe.
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meowcat
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Re: A Beater Truck and a FAT 401k...

Post by meowcat »

Wanderingwheelz wrote: Thu Aug 27, 2020 1:28 pm
meowcat wrote: Thu Aug 27, 2020 12:47 pm
Wanderingwheelz wrote: Tue Aug 25, 2020 6:25 pm I’m a true Boglehead, with a paid for home and maxed retirement accounts always, but here’s an unpopular opinion.

Buying nice new cars, carefully, IS NOT as harmful to your financial health as many would have you believe. If you are a good negotiator and you’re patient, you can own new cars for not much more than good used ones- often less. I’m FI at 49 and I’ve owned 11 brand new cars (Counting an RV) in the last 10 years. Three were Porsches and one was a BMW. Only one was kept longer than the manufacturers warranty period and that’s the one we bought my daughter when she was 16, she’s now 22.
It depends. Buying new luxury cars and big houses is not the problem. The problem arises when one sacrifices their future financial security to do so. If you can buy a million dollar house, park a couple of Mercedes Benz's in the driveway, send 4 kids to private school and still sock away 40% of your income, go for it.
There are a lot of Bogleheads driving old cars who can easily afford to drive newer cars.

Once you favor in not having to pay for repairs and maintenance, owning newer cars that are bought right is a wider decision than many people believe.
Sure. Like I said, it depends. If I decide to buy a car and finance it at $500/month, not a problem, right? But if I have to reduce my savings by $500/month to do it, now it's a problem. Obviously, if I'm saving 40% of my income, I'm more likely to pay cash. That's the problem with society, today; over consumerism. We are doing well, financially, but nearly everyone we know is sacrificing their future financial security for the material things they have, today. I have no desire to tell them what they're doing isn't in their best interest, but at the same time, I'm overly fascinated by what goes on in their head.
More people should learn to tell their dollars where to go instead of asking them where they went. | -Roger Babson
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Re: A Beater Truck and a FAT 401k...

Post by surfstar »

sailaway wrote: Thu Aug 27, 2020 10:25 am
phil11 wrote: Thu Aug 27, 2020 10:20 am I have to get to work, to make the money, to contribute to the 401K. While I have an older vehicle, it is not a beater. Everyone saves in different areas.
Also, working shift work, there is a person waiting to go home after 12 hours, and having a POS car is no excuse for not making it in.
To me, a beater is a car that requires a lot of maintenance, which isn't worth the time and hassle, much less the money. My reliable car with bird poop burns and sun damage and worn cloth seats is a workhorse, not a beater.

I think some here are using the term to mean just mean an older car, perhaps with some cosmetic damage.
Agreed. It was freeing when my vehicle would get to the cosmetic point where I no longer cared to wash it. I'd just clean the windows as needed.
When the ac went out though, that relegated it to beater status as it didn't warrant repair, so it's lifetime finally became limited. ('93 Mazda that I got to 345k miles, original clutch, bought in 2001 w/ 82k)
One of the worst things about a new(-er) vehicle, is the you feel obligated to care for it cosmetically. More so if you plan on selling it at some point and care about resale.
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Re: A Beater Truck and a FAT 401k...

Post by White Coat Investor »

Callisto wrote: Tue Aug 25, 2020 3:14 pm Agree with the sentiment, but I worry if people sometimes take the whole junker thing too far. I picked up my dream car and got hit by a reckless driver literally a week into it. Was kicking myself, wishing I had kept my 20 yr old Corolla, right up until I got a phone call to come back to the hospital asap because the xrays came back and my hand was broken in a way which might have ended my career just months after I had finished school.

Doubt I'll be buying a new car any time soon, but I sure as hell am never driving a car that doesn't have the latest safety features.
Then you'll need to buy a new one every year. Every year there is some new safety feature. Your two statements can't go together.
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winterfan
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Re: A Beater Truck and a FAT 401k...

Post by winterfan »

My husband drives beaters (his preference) since he is a mechanic and is often hauling things or has dirty clothes. I usually drive a newer used or new car and keep it for about 11 or 12 years.

If I could do it all over again, I would have bought a nicer house that had the features I wanted, especially if I knew we would be here as long as we have (almost 20 years). We wouldn't have been house poor either. We were just trying to maximize savings at the time. We like our area, and the thought of moving to a different house in the same neighborhood doesn't make much sense now.
TNWoods
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Re: A Beater Truck and a FAT 401k...

Post by TNWoods »

sailaway wrote: Thu Aug 27, 2020 10:25 am To me, a beater is a car that requires a lot of maintenance, which isn't worth the time and hassle, much less the money. My reliable car with bird poop burns and sun damage and worn cloth seats is a workhorse, not a beater.

I think some here are using the term to mean just mean an older car, perhaps with some cosmetic damage.
Your definition is wrong, and their definition is right. A beater car is an older car, probably high mileage, probably doesn't look good, you don't care when it gets dinged in the parking lot because it isn't a nice, shiny, new car. The whole point of a beater instead of a nice, new car is that it DOESN'T require a lot of repairs, so it is cheap to continue to drive because the goal is saving money, not to just drive a lousy looking car.

THAT is a beater car.

Google "beater car definition" for a myriad of sources on that, it's a pretty well established term.

TNWoods
sailaway
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Re: A Beater Truck and a FAT 401k...

Post by sailaway »

TNWoods wrote: Fri Aug 28, 2020 9:56 am
sailaway wrote: Thu Aug 27, 2020 10:25 am To me, a beater is a car that requires a lot of maintenance, which isn't worth the time and hassle, much less the money. My reliable car with bird poop burns and sun damage and worn cloth seats is a workhorse, not a beater.

I think some here are using the term to mean just mean an older car, perhaps with some cosmetic damage.
Your definition is wrong, and their definition is right. A beater car is an older car, probably high mileage, probably doesn't look good, you don't care when it gets dinged in the parking lot because it isn't a nice, shiny, new car. The whole point of a beater instead of a nice, new car is that it DOESN'T require a lot of repairs, so it is cheap to continue to drive because the goal is saving money, not to just drive a lousy looking car.

THAT is a beater car.

Google "beater car definition" for a myriad of sources on that, it's a pretty well established term.

TNWoods
The first four definitions all included "drive into the ground." They went on about being a workhorse, but the drive into the ground means that at some point that ceases. I have less and less tolerance for that point.
TNWoods
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Re: A Beater Truck and a FAT 401k...

Post by TNWoods »

sailaway wrote: Fri Aug 28, 2020 10:08 am
TNWoods wrote: Fri Aug 28, 2020 9:56 am
sailaway wrote: Thu Aug 27, 2020 10:25 am To me, a beater is a car that requires a lot of maintenance, which isn't worth the time and hassle, much less the money. My reliable car with bird poop burns and sun damage and worn cloth seats is a workhorse, not a beater.

I think some here are using the term to mean just mean an older car, perhaps with some cosmetic damage.
Your definition is wrong, and their definition is right. A beater car is an older car, probably high mileage, probably doesn't look good, you don't care when it gets dinged in the parking lot because it isn't a nice, shiny, new car. The whole point of a beater instead of a nice, new car is that it DOESN'T require a lot of repairs, so it is cheap to continue to drive because the goal is saving money, not to just drive a lousy looking car.

THAT is a beater car.

Google "beater car definition" for a myriad of sources on that, it's a pretty well established term.

TNWoods
The first four definitions all included "drive into the ground." They went on about being a workhorse, but the drive into the ground means that at some point that ceases. I have less and less tolerance for that point.
Yeah, that's the point. Not a single one says "Drive it into the ground and keep pouring money into the hole it makes." Every one of them says it is a reliable, well running car. When it becomes a money pit, of course you get rid of it, since the idea is to have a car that doesn't suck money from your wallet.

TNWoods
Chuck107
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Re: A Beater Truck and a FAT 401k...

Post by Chuck107 »

.....
Last edited by Chuck107 on Mon Oct 05, 2020 8:28 am, edited 1 time in total.
Alas, I find moderation of this forum too restrictive for my tastes, farewell.
alluringreality
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Re: A Beater Truck and a FAT 401k...

Post by alluringreality »

White Coat Investor wrote: Fri Aug 28, 2020 9:41 am
Callisto wrote: Tue Aug 25, 2020 3:14 pm Doubt I'll be buying a new car any time soon, but I sure as hell am never driving a car that doesn't have the latest safety features.
Then you'll need to buy a new one every year. Every year there is some new safety feature. Your two statements can't go together.
I might interpret the comment as meaning buying instead of driving. When I last bought in 2011 the used car market seemed overpriced and I questioned if I ended up saving anything on my prior used car due to maintenance issues, so I bought a redesigned top safety pick. Of course safety features have advanced since that time, so any used car I'd buy today would outclass my current car, yet there probably wasn't anything in the segment safer when I purchased.
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Independent George
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Re: A Beater Truck and a FAT 401k...

Post by Independent George »

I think there's a bit of a Bogleheads disconnect here - the main reason cars are a drain on most Americans finances is less about the purchase price, and more about financing and negative equity. A typical BH who splurges an extra $10k on a car will also pay it off in 0-3 years instead of carrying the debt for a decade. Nor would they just roll negative equity into a new 7-year car loan every three years, but that is an increasingly common scenario for the average American. I'd guess everyone in this thread knows how to read an amortization table; the average consumer - which includes many educated, six-figure earners - cares only about their monthly payment. Expensive cars are the symptom - the fundamental problem is debt and behavior.
dknightd
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Re: A Beater Truck and a FAT 401k...

Post by dknightd »

I have a friend that really likes to ride bicycles. I suspect he has spent more on bicycles than on cars/trucks. It would not surprise me if he spent more on bicycles than I did on cars/trucks/bicycles combined. We do not have Fat 401k, but both have enough :)

edit: is Liz Weston the one who retired, then came out of retirement to make more money?
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds.
kayli69
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Re: A Beater Truck and a FAT 401k...

Post by kayli69 »

Bought a 2019 Tundra for 20% off MSRP in Nov 2019 for $34,000. Still wasnt good enough so I had them include a spray in bedliner. And then negotiated trade in for my my 2008 Toyota for $12,000 ( paid $24,000 cash in 2008), and thus paid $22,000 cash for a new truck that will last me at least 12 years. Thats how you buy a new vehicle.

And still remain incognito, with a >7 million net worth
JD2775
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Re: A Beater Truck and a FAT 401k...

Post by JD2775 »

Digging the love for all the trucks in this thread :)

2013 Tacoma owner here. Paid off since 2015. No “FAT 401k” quite yet but Getting there. Plan to keep this truck for many years to come as I only average 5-10k miles a year these days
pascalwager
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Re: A Beater Truck and a FAT 401k...

Post by pascalwager »

Other than using my credit card for convenience, I've always paid cash for everything--cars, homes, etc. But I did buy three new cars over the last four years for my sister and myself. Her first SUV was totaled by a driver running a red light. She mentioned being satisfied with a lesser car this time, but I knew she really wanted the new version of the same SUV for work and outdoor recreation, so that's what I bought. (Our replaced cars had been 23 and 25 years old and my exasperated mechanic finally told me that "everyone finally buys a new car".)

But I'm retired now with a surprisingly large portfolio whereas when I was still working and accumulating, I only bought one new car, the one that was driveable for 23 years and 265,000 miles. My other cars weren't beaters, and were well-maintained--but all were used.
novemberrain
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Re: A Beater Truck and a FAT 401k...

Post by novemberrain »

LittleMaggieMae wrote: Tue Aug 25, 2020 3:18 pm I don't worry about getting "car jacked" - it seems really popular in my area (if you are driving a big expensive SUV). I don't have a car alarm on my car.
I am not sure that is true. Many new luxury cars come with location tracking via satellite built in. Thieves know it. And even if it gets carjacked by a thief unaware of the satellite tracking, it can be retrieved since the location can be tracked on an app :D For example I read somewhere that in the entire history of Tesla, there have been like 10 of them stolen.

On the other hand, certain older model vehicles are magnets for car jacking since there is a big market for either the stolen car itself or it's parts. I doubt there is a big market for stolen Teslas :D
Ari
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Re: A Beater Truck and a FAT 401k...

Post by Ari »

surfstar wrote: Tue Aug 25, 2020 5:31 pm Its the Bogleheads "I'm more frugal than you" -off!

This time it was a trick question - Trucks get too low of gas mileage and can have higher registration and insurance rates. Whomever didn't say "20 year old Corolla" lost - good luck next time.
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Helo80
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Re: A Beater Truck and a FAT 401k...

Post by Helo80 »

Independent George wrote: Fri Aug 28, 2020 11:18 am I think there's a bit of a Bogleheads disconnect here - the main reason cars are a drain on most Americans finances is less about the purchase price, and more about financing and negative equity. A typical BH who splurges an extra $10k on a car will also pay it off in 0-3 years instead of carrying the debt for a decade. Nor would they just roll negative equity into a new 7-year car loan every three years, but that is an increasingly common scenario for the average American. I'd guess everyone in this thread knows how to read an amortization table; the average consumer - which includes many educated, six-figure earners - cares only about their monthly payment. Expensive cars are the symptom - the fundamental problem is debt and behavior.

There is definitely a presence of humblebragging on this site and, "This is how I did it, and this is how you must do it.". If you push back, people start getting snippy with you.

Also, I think some on here take a vow of poverty for transportation needs. I get it if you live in NYC or somewhere where you maybe hit 30-40 mph max 29 out of the 30 days of a month. But, others on here do a lot of commuting, travel, or have functional needs for a car.

I used to have the philosophy of driving cars into the ground to save money. I do not anymore. I don't see the point of having a high savings rate and then not being able to enjoy anything in life. I'm sure there are some on here that drive really old cars to be frugal, but then have a huge wine budget. I don't jump on them for being alcoholics. You like wine over cars. Okay!
Dandy
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Re: A Beater Truck and a FAT 401k...

Post by Dandy »

Car/truck expenses can be harmful to your investment success. I was one of those who prided myself on driving older cars to keep expenses low. It does make some sense. I think the advancements in safety have called doing this to the extreme may be less wise for those who can afford a newer vehicle.

The advancements in safety features like back up cameras, blind spot monitoring, automatic braking, cross traffic warning, etc. can help you avoid expensive accidents and possible injury to you or others. Even minor fender benders can cause expenses, inconvenience and injury and raise future insurance premiums. Avoiding a serious accident would be extremely valuable especially if you are the sole breadwinner.

It isn't necessary to buy a new vehicle since many newer used cars have these safety features. Over 50 plus lifetime driving years these safety features would surely have prevented some accidents. Just something to consider especially if you can afford to get these features but still are overly focused on squeezing the last dollar by driving a really old car.

I haven't yet followed this advice yet but will going forward. :oops:
smitcat
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Re: A Beater Truck and a FAT 401k...

Post by smitcat »

Helo80 wrote: Sat Aug 29, 2020 7:55 am
Independent George wrote: Fri Aug 28, 2020 11:18 am I think there's a bit of a Bogleheads disconnect here - the main reason cars are a drain on most Americans finances is less about the purchase price, and more about financing and negative equity. A typical BH who splurges an extra $10k on a car will also pay it off in 0-3 years instead of carrying the debt for a decade. Nor would they just roll negative equity into a new 7-year car loan every three years, but that is an increasingly common scenario for the average American. I'd guess everyone in this thread knows how to read an amortization table; the average consumer - which includes many educated, six-figure earners - cares only about their monthly payment. Expensive cars are the symptom - the fundamental problem is debt and behavior.

There is definitely a presence of humblebragging on this site and, "This is how I did it, and this is how you must do it.". If you push back, people start getting snippy with you.

Also, I think some on here take a vow of poverty for transportation needs. I get it if you live in NYC or somewhere where you maybe hit 30-40 mph max 29 out of the 30 days of a month. But, others on here do a lot of commuting, travel, or have functional needs for a car.

I used to have the philosophy of driving cars into the ground to save money. I do not anymore. I don't see the point of having a high savings rate and then not being able to enjoy anything in life. I'm sure there are some on here that drive really old cars to be frugal, but then have a huge wine budget. I don't jump on them for being alcoholics. You like wine over cars. Okay!
I don't see the point of having a high savings rate and then not being able to enjoy anything in life."
Yes agreed - balance in life is the key.
Helo80
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Re: A Beater Truck and a FAT 401k...

Post by Helo80 »

Dandy wrote: Sat Aug 29, 2020 8:39 am It isn't necessary to buy a new vehicle since many newer used cars have these safety features. Over 50 plus lifetime driving years these safety features would surely have prevented some accidents. Just something to consider especially if you can afford to get these features but still are overly focused on squeezing the last dollar by driving a really old car.

If you look at overall accident and mortality rates, things are trending downward. There are more cars than ever on the road, and accidents are going down. In a perfect world, driving the speed limit and driving defensively would prevent 100% of all accidents.

But, we don't live in a perfect world, and nobody knows when their number will be called.
JackoC
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Re: A Beater Truck and a FAT 401k...

Post by JackoC »

Hmm, a car thread under 'Investing-Theory'. :happy But as to thread title and article 'FAT 401k', if you're not maxing out tax deferred retirement contributions because you buy nicer cars than you need that's a spending problem, with rare exceptions.

At the other end of spectrum, pride in driving crummy cars by people with loads of money already is eccentric IMO. We're all entitled to our eccentricities, and our view of what is eccentric or not, but that is IMHO. And it can be annoying when some of those people pretend it's some kind of moral virtue to drive crappy cars, especially when cars are singled out (spend on expensive vacations instead, 'studies show' you'll get more enjoyment!...I don't rely on 'studies' or disembodied voices on the internet to tell me what I like, and 'instead' assumes I can't afford both).

Buy whatever car you like that fits into a reasonable saving/spending plan. And 'like' can include safety and lower likelihood of car trouble, not just 'it's a cool car', though the latter is also valid, if affordable. But reasonable savings/spending plans almost always start with maxing tax deferred retirement contributions in working years so a car purchase should not be competing with 401k contributions other than in exceptional cases.
Last edited by JackoC on Sat Aug 29, 2020 10:01 am, edited 1 time in total.
Helo80
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Re: A Beater Truck and a FAT 401k...

Post by Helo80 »

Dandy wrote: Sat Aug 29, 2020 8:39 am Car/truck expenses can be harmful to your investment success. I was one of those who prided myself on driving older cars to keep expenses low. It does make some sense. I think the advancements in safety have called doing this to the extreme may be less wise for those who can afford a newer vehicle.

I'm pulling this out of my you know what, but I'd say 75% of this site would be fine leasing a Rav4/Camry/etc in perpetuity and it would have no real downrange effect on their retirement. The financial porn industry that profits off of "car buying advice" is not going targeting BHs that tend to buy fairly reliable vehicles and keep them for 10+ years. The people that are hurting their long-term financial success and wealth accumulation are generally those taking out 7+ year loans and rolling neggy eggy into their new car purchase. Of course, I'm sure you can find millionaires with healthy EFs taking 7 year loans today, because the terms were right. But... in general... just like in general, BHs are not buying cars that depreciate like bricks and then wash, rinse, repeat in 3 years.
Bobby206
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Re: A Beater Truck and a FAT 401k...

Post by Bobby206 »

I think sometimes the obsessiveness to live below one's means causes people to forget about living. Don't get me wrong as I do commend people who live below their means and do scoff a bit at my neighbors with Range Rovers and other unreliable and overpriced cars. However, sometimes people, many here on BH, seem to forget to live life. I have heard rumors we only live once and don't know how long the ride will last. With that in mind I try to live within my means but not significantly below. I alternate between new cars and used cars, we live in a nice house but not nearly as nice as we could afford (in fact we probably bought more than we could afford 20 years ago but haven't moved), etc....
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JoMoney
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Re: A Beater Truck and a FAT 401k...

Post by JoMoney »

It's a relative situation. Different people, at different relative income levels/net worth, with different goals, will be in a different situation with regard to what sort of car meshes with their goals.
If your goal is to accumulate wealth (or get out of debt) I like Dave Ramsey's 'rule of thumb', that the total value of all your vehicles should not be more than half your income. For some people this may be nothing more than a beater truck, for others maybe something more, the big issue is that these are depreciating assets acting like a boat anchor to your net worth, the higher the value of the vehicles the more it's handicapping your potential net worth growth (or ability to get out of debt).
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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