30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

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Topic Author
sjl333
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30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by sjl333 » Wed Jul 03, 2019 5:22 pm

Hello All,

Turned 30 not too long ago. Wanted to get some opinions of how I am doing thus far.

Single.

Renting apartment at 900/month.

I got about 170k invested across different vehicles.

Edit: maxing 401k Roth IRA HSA

Still owe my dad about 30k for school loans. Paying him off slowly 1k / month.

Was able to grow my income from 65k (starting) to 250k+ (now) over the past 8 years of hard work. New job pays between 200k - 300k depending on how much OT I work, which I plan to do a lot, since I'm still single and no dependents.

No other debts.

Can I afford a 60k car , such as a model 3 performance version ?

Thanks.
Last edited by sjl333 on Wed Jul 03, 2019 5:37 pm, edited 1 time in total.

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Watty
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by Watty » Wed Jul 03, 2019 5:34 pm

sjl333 wrote:
Wed Jul 03, 2019 5:22 pm
Still owe my dad about 30k for school loans. Paying him off slowly 1k / month.

.....

Can I afford a 60k car , such as a model 3 performance version ?

Nope

1) You still owe your dad $30K.

2) It sounds like your net worth is only about $170K.

retiredjg
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by retiredjg » Wed Jul 03, 2019 5:35 pm

One should not buy a $60k car while owing $30k to a parent who was generous and kind enough to make you a loan. Not cool at all...no matter what he says.

How are you doing? Well, you've done very well on increasing your income. :D It is not clear you have matured financially in other ways though. My sense is that you have not. I could be wrong. :(

Do you have an emergency fund? Are you saving for something like a house some day (or have decided never to have one)? Are you filling both a 401k and an IRA each year? Are there other debts?

With an income over $200k and rent of $900 a month, you should be able to save A LOT, maybe $100k a year and pay cash for luxuries. If you can do that, pay off your dad and buy the car (with cash). If not, put the car off for a year or two and get your financial matters in better order.

stoptothink
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by stoptothink » Wed Jul 03, 2019 5:36 pm

Save up for a year and pay for it in cash. How would your dad feel if you blew $60k on a car while owing him money?

Topic Author
sjl333
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by sjl333 » Wed Jul 03, 2019 5:37 pm

sjl333 wrote:
Wed Jul 03, 2019 5:22 pm
Hello All,

Turned 30 not too long ago. Wanted to get some opinions of how I am doing thus far.

Single.

Renting apartment at 900/month.

I got about 170k invested across different vehicles.

Edit: maxing all retirement vehicles 401k Roth IRA HSA

Still owe my dad about 30k for school loans. Paying him off slowly 1k / month.

Was able to grow my income from 65k (starting) to 250k+ (now) over the past 8 years of hard work. New job pays between 200k - 300k depending on how much OT I work, which I plan to do a lot, since I'm still single and no dependents.

No other debts.

Can I afford a 60k car , such as a model 3 performance version ?

Thanks.

cbr shadow
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by cbr shadow » Wed Jul 03, 2019 5:40 pm

These "Can I afford it" threads are always strange and probably not especially helpful since it's very subjective. If you posted on Reddit Finance people would say you could 100% afford it. Here at Bogleheads people would say you should have $1M net worth, no debt, big emergency fund, fully funded retirement accounts, paid off home, etc. before purchasing a $60k car.
"Can I afford it" vs. "Should I buy it" are different questions. You can absolutely purchase it the car, likely with cash and afford the maintenance/insurance for it. I don't think it's a wise decision to do so though. You're better off in long run building up your savings.
You're young though, so it's ok to make some mildly unwise decisions IMO. What's important is understanding what you're giving up by buying the car vs. investing.

bgf
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by bgf » Wed Jul 03, 2019 5:46 pm

pay back your dad then get it. you make a good income and youre maxing tax benefited space. looks good.
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

retiredjg
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by retiredjg » Wed Jul 03, 2019 5:51 pm

sjl333 wrote:
Wed Jul 03, 2019 5:37 pm
Can I afford a 60k car , such as a model 3 performance version ?
Still no.

Once you have an emergency fund and have paid off your dad and saved up a very big downpayment for a luxury car that you do not need, then you can buy it.

A very big downpayment would be at least $40k.

michaeljc70
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by michaeljc70 » Wed Jul 03, 2019 6:08 pm

I agree with most of the posters. With the money you are making pay off your father ASAP and then buy the car. You are making $250k, paying $900 for rent and paying him only $1k/mo?

To answer the question directly, of course you can afford it.

HEDGEFUNDIE
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by HEDGEFUNDIE » Wed Jul 03, 2019 6:15 pm

Why is this even a question. Of course you can afford it.

Go read the other thread where the guy is about to retire with $2.5M at age 51 but has literally nothing to do in retirement and so will keep on working at a job he dislikes. He did everything “right” financially, a by-the-book Boglehead.

Don’t be that guy.

takingcontrol
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by takingcontrol » Wed Jul 03, 2019 6:25 pm

It's a hard choice to make. I know about the proverbial old dude with all the money and who never spent it. And then the profligate youth who spent everything and is now an elderly Wal-mart greeter until he is 100 and also washes dishes all day. You should find a happy medium.

That being said, I recently read an article by a futurist that predicted our children would likely never drive a car when they come of age, due to rapid advances in AI and self-driven auto that would obsolete human driven gas guzzlers. Also because eventually computers will avoid most of the accidents that use meatheads get ourselves into. Better tech and more safety regs will obsolete the private auto industry as we currently know it. Those owning cars we are used to today would see their investments go up in smoke (not that cars are worth that much after 10 years anyways).

Don't make snap decisions though. Give yourself 60 days before you commit.
I bought my first new car 12 years ago. Recently went past 100,000 miles and I bust out the whiskey to celebrate.
It looks like crap but it has taken me literally everywhere and dealt with everything. Recently had full service and changed out the brakes (which actually lasted the whole 100,000).
I plan to drive this for another 100,000 then I will gift it to my oldest child. I hope my child will get another 100,000 while learning the present & future values of money.

My next car will be a $1-2K junker that looks terrible but drives well. Setting up a deal with my mechanic, who always has a couple cars that he has fixed up but repo'ed because the owners can't pay their bills. These are great deals usually because he has done all the work, he can tell me exactly what the problems are, and usually they've just been fixed and serviced. If I have doubts, I just pay another mechanic $150 for an eval and it's all good.
He just wants to get them off the lot to free up a couple parking spaces. If all they need are oil/fluid changes and the occasional belt over the next 10 years, game on!

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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by bloom2708 » Wed Jul 03, 2019 6:27 pm

+1

Pay off the $30k you owe to your dad. Then save and do what you want.

If we can see it. He can see it. You are off to a good start, but 100 yards into a marathon and are going into the arms up, I win trot! :wink:
"People want confirmation, not advice" Unknown | "We are here to provoke thoughtfulness, not agree with you" Unknown | Four words: Whole food, plant based

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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by Ron Ronnerson » Wed Jul 03, 2019 6:34 pm

I would pay off dad and then buy a car for under $20k and keep it for many years. Now you don’t have to work so much over time to afford that expensive car and can actually have time to enjoy some of your earnings. Perhaps travel, spend time with the people you care about, enjoy hobbies. By the way, much of that over time you put in is likely taxed at a high rate, anyhow. That $60k car will require you to earn something like $100k before taxes to be able to afford it. It’s just not a very efficient way to go about things, in my opinion.

Keep in mind that money that is invested at your age is extremely powerful due to the time it would have to compound. That being said, if you really, really love this car and have wanted it for a long time, maybe this purchase is right for you. I’d still pay off dad first, though.

BruDude
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by BruDude » Wed Jul 03, 2019 9:33 pm

As someone slightly older than you and a "car guy", I say buy what makes you happy....if you really want the Tesla, just do it. You can afford the car. Whether paying back your dad faster or saving for retirement instead or buying a house instead of renting are priorities is up to you. How will your dad feel if you get an expensive new car while you still owe him $30k? If you're steadily paying him back the $1k/month and he's ok with that, then it seems fine, you just don't want to look like an entitled jerk if he's going to see if the wrong way.

When I was 24 I bought a Corvette because I wanted it even though I could barely afford it, no regrets. When I was 27 I bought an M3 I could afford, but not by BH standards. When I was 30, I bought my first 911S (which I actually sold for a pretty hefty profit shortly thereafter, then bought another 911S). I regret none of these things. Some people are car people, some people are not. Those that are will tell you to do it, those that aren't will tell you it's an unnecessary expense and you should just buy a 10 year old Civic and run it into the ground. To each their own. I doubt you're making any kind of major financial mistake given your income.

ohai
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by ohai » Wed Jul 03, 2019 9:41 pm

Can you afford this car, as in, do you have money to buy it? Obviously yes. Should you buy it? That seems like a sub optimal decision. You will have 60k/(170k-30k) = 43% of your net worth in a car. What is next? This is why Americans are broke despite making a lot of money.

When I was 30, I was already a multi millionaire, precisely because I never made spending decisions like this.

ohai
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by ohai » Wed Jul 03, 2019 9:43 pm

BruDude wrote:
Wed Jul 03, 2019 9:33 pm
I doubt you're making any kind of major financial mistake given your income.
I disagree. Any money you spend now will be 2x, 4x, 8x in the future.

I know everyone has different values and it's not wrong to have some fun. However, I don't think OP has "earned" it yet.

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willthrill81
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by willthrill81 » Wed Jul 03, 2019 9:44 pm

Watty wrote:
Wed Jul 03, 2019 5:34 pm
sjl333 wrote:
Wed Jul 03, 2019 5:22 pm
Still owe my dad about 30k for school loans. Paying him off slowly 1k / month.

.....

Can I afford a 60k car , such as a model 3 performance version ?

Nope

1) You still owe your dad $30K.

2) It sounds like your net worth is only about $170K.
+1

My question is why his net worth is less than one year's income at age 30.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by Katietsu » Wed Jul 03, 2019 9:46 pm

After taxes, retirement savings, HSA and rent, you should still have at least 10 k a month. You should have Dad paid off by the end of the year. What else are you spending big bucks on? Hobbies? Going out? Would you rather it be a Tesla? You can a luxury but not all luxuries.

CoastalWinds
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by CoastalWinds » Wed Jul 03, 2019 9:55 pm

[quote=ohai post_id=4623792 time=1562208078 user_id=128506
When I was 30, I was already a multi millionaire, precisely because I never made spending decisions like this.
[/quote]

This is why you were a multi-millionaire at age 30? I don’t imagine a lucrative income and/or inheritance had anything to do with it. 😉

Cycle
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by Cycle » Wed Jul 03, 2019 10:09 pm

A lifetime of car ads have led to this moment. The neurons are firing on their own.

You've read all about it, studied the photos, selected all your options. The years long hunt is nearing it's ultimate climax.

Not much you can do but accept your fate.

Rent a Tesla 3 performance for the weekend, and continue driving your clunker while you research your next conquest.
Never look back unless you are planning to go that way

crossbow
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by crossbow » Wed Jul 03, 2019 10:41 pm

sjl333 wrote:
Wed Jul 03, 2019 5:22 pm
Hello All,

Turned 30 not too long ago. Wanted to get some opinions of how I am doing thus far.

Single.

Renting apartment at 900/month.

I got about 170k invested across different vehicles.

Edit: maxing 401k Roth IRA HSA

Still owe my dad about 30k for school loans. Paying him off slowly 1k / month.

Was able to grow my income from 65k (starting) to 250k+ (now) over the past 8 years of hard work. New job pays between 200k - 300k depending on how much OT I work, which I plan to do a lot, since I'm still single and no dependents.

No other debts.

Can I afford a 60k car , such as a model 3 performance version ?

Thanks.
What else are you blowing your money on? You've been working for 8 years... Currently earn 250k a year... But don't even have 1x annual income saved... Let me guess, you have other hobbies that require lots of $$$$.

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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by mighty72 » Wed Jul 03, 2019 10:55 pm

OP, you can afford the car for sure. However, I would encourage you to share your current savings rate and expenses so folks can make an educated recommendation. My family of 4 spends around 3k a month if you exclude housing and kids education. This includes grocery, eating out, gas, etc. What do you spend?

You said 250k income, you are single and spend 12k on housing. Let us say you pay 75k in taxes and 30k goes to retirement. You still have 135k left.

You should be debt free. You should also have one year salary in your retirement account and a emergency fund by the end of year. You can buy the Tesla next year and pay for it in cash.
Good luck!

02nz
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by 02nz » Wed Jul 03, 2019 11:04 pm

To me the $40K regular Model 3 is a much better buy. 0-60 in 5.3 seconds, versus 3.2 in the Performance version that costs 50% more.

The reality is, you can't use the additional performance of the Performance version 99% of the time. And the 5-second 0-60 time of the regular version would have been considered exotic-car fast just a few years ago.

The Performance version does also have some additional range, but again, not really enough to justify the price difference, IMHO.

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Leif
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by Leif » Wed Jul 03, 2019 11:33 pm

You just missed the cut-off date for a larger federal tax credit. The final credit is available until the end of the year.

I bought a corvette around 30. But I always paid cash and never had debt except for a mortgage. If you can pay off your dad, and pay cash for the car, that is what I would do. If you cannot do that by year end I would talk to your dad. You might accelerate the payments.

Topic Author
sjl333
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by sjl333 » Thu Jul 04, 2019 1:03 am

Hello All,

Thanks for the responses.

There are a lot of questions of why my net worth is so slow with 250K+ salary.

Please note that I only received this big pay bump last month.

I was making 150K before this job for 1-2 years, before that I was below 100K+. So, these big pay bumps only came recently.

Also, I started in the hole a -120K (from College Loans and Car Loans).

It took me a while to dig myself out of that hole since my starting salary was only 65K+. I worked very hard to get that raised as fast as possible (as you can see with my current salary). but like i mentioned, the big salary jumps were only recent in the past 1-2 years.

I should also add - I do have expensive hobbies / habits. I eat out a lot, I go on international vacations 1-2 times per year, and I had some cosmetic surgery (hair transplant). So all these expensive habits have kept me from growing a larger networth. I must admit, I do spend a lot of money, but I work really hard to offset it (as can be seen with my huge salary growth).

Keep in mind, the salary will only continue to grow. In the next couple of years i expect to be over 300K+ yearly. Job is stable. Industry is stable.

I'm essentially betting on myself knowing I will be making very good money for a very long time. But I do agree, I should start saving more....

Hopefully that helps you guys out a bit more.

But overall, it seems that I should wait, pay off my dad, save a bit more , before pulling the trigger. I'll think about it some more.

Last note: my dad isn't in a rush to get his money back. He's self made, multi millionaire. He does still want full re-payback, but hes totally okay with me on getting the tesla if I want to get it.

Bill McNeal
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by Bill McNeal » Thu Jul 04, 2019 1:09 am

Get the P3D. In red.

tesuzuki2002
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by tesuzuki2002 » Thu Jul 04, 2019 2:06 am

Where is all your money going? making $200K-$300K and only $170K saved up?

cut your budget.

You could by the car next year. Pay your debts off.

tesuzuki2002
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by tesuzuki2002 » Thu Jul 04, 2019 2:06 am

Bill McNeal wrote:
Thu Jul 04, 2019 1:09 am
Get the P3D. In red.
only if Green!!!

:moneybag :moneybag

Thesaints
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by Thesaints » Thu Jul 04, 2019 2:30 am

You dad's loan is a non-issue, unless he asked for his money back now.
What you should really consider is instead whether you are better off paying 60k for a model 3, with higher insurance and registration associated payments, or spend 25k for a gently used Z4 and likely say goodbye to your single status.

bluebolt
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by bluebolt » Thu Jul 04, 2019 5:19 am

I agree that it would be good to wait a bit before buying it. That said, the biggest hit to your financial future will be if you decide you need a new car every two or three years.

mortfree
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by mortfree » Thu Jul 04, 2019 5:58 am

Do you have a garage to keep your 60k car safe and out of the elements?

Will the Tesla be a second car or are you trading in the one you have now?

Do you plan on owning a house someday?

I would accelerate paying back your dad even if he doesn’t need it.

Otherwise hoard as much cash as you can now and invest accordingly to let the compounding start to take effect.

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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by ddurrett896 » Thu Jul 04, 2019 6:13 am

sjl333 wrote:
Thu Jul 04, 2019 1:03 am
I'm essentially betting on myself knowing I will be making very good money for a very long time.
A lot of people had the same mindset in the early 2000s when they took adjustable rate mortgages.

Save up $60,000 for the car.
Pay off your dad so its one less thing to think about.

student
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by student » Thu Jul 04, 2019 6:33 am

My personal guideline is to buy a car that costs no more than 30% of my salary. So your situation fits this guideline. Like some of the other posters, I also think that it is wise to wait until you pay back your father. However, I think an exception can be considered if buying now entitles you to federal and state tax incentives that will unlikely be available later.
Last edited by student on Thu Jul 04, 2019 7:05 am, edited 1 time in total.

hightower
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by hightower » Thu Jul 04, 2019 6:39 am

sjl333 wrote:
Wed Jul 03, 2019 5:22 pm
Hello All,

Turned 30 not too long ago. Wanted to get some opinions of how I am doing thus far.

Single.

Renting apartment at 900/month.

I got about 170k invested across different vehicles.

Edit: maxing 401k Roth IRA HSA

Still owe my dad about 30k for school loans. Paying him off slowly 1k / month.

Was able to grow my income from 65k (starting) to 250k+ (now) over the past 8 years of hard work. New job pays between 200k - 300k depending on how much OT I work, which I plan to do a lot, since I'm still single and no dependents.

No other debts.

Can I afford a 60k car , such as a model 3 performance version ?

Thanks.
Hello! Great job on your finances so far. You're doing better than I was at your age. As to can you afford the car...certainly* but with caveats. Save up 60k plus the sales tax before you buy it. If you're cool with spending 60k on the car once you have the cash earned and in your savings account, then you can definitely afford it. If you feel the need to sign up for an auto loan in order to buy it because you can't stomach the thought of waiting to save that much and then letting go of that much cash all at once, then no you can't afford it.
That's my personal philosophy on cars. You can buy whatever car you want as long as your willing and able to pay cash for it. No consumer debt!

ASpenderInRecovery
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by ASpenderInRecovery » Thu Jul 04, 2019 6:44 am

I had a similar urge to you but with a higher income. A year ago I went to purchase a new car and was tempted by luxury vehicles because like you I had grown my income substantially and felt “I had earned it”. I even admire cars and research their performance, technology, reviews, etc in my spare time. Eventually you realize that that these big purchases you play out in your head all eventually just fade into the background during ownership. So I ended up buying a new Honda Accord over the new Audi A4 I was tempted by. For example, If you bought a Tesla today you would be stoked and you would spend multiple days maybe even weeks identifying new things you enjoyed about it. After a couple weeks that feeling would subside and it would just become your method of transport. If you read up on behavioral economics you’ll see there is tons of psychological studies demonstrating we actually gain the most satisfaction anticipating a reward or in this case a purchase you’d be rewarding yourself with. Once we get the expected reward the satisfaction drops back to baseline and we shift our focus.

Read one or both of these books:
Happy Money: The Science of Smarter Spending
Why Smart People Make Big Money Mistakes

Lastly, I’d ramp up the loan repayment to your father. He’ll appreciate it and it will clear you conscious when you are paid in full. Then you can shift the money you were paying him into saving/investing. Create a financial milestone goal, like 300k or 500k in assets then reward yourself with something then.

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Nate79
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by Nate79 » Thu Jul 04, 2019 6:49 am

So the month after you get the pay raise you want to go out and spend it on an expe sive car? No, you can't afford it. Pay off your debt and pay cash for a more reasonable car, even if a lower end model 3. This is just an example of lifestyle creep where you will never get ahead playing this game.

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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by hightower » Thu Jul 04, 2019 6:51 am

ASpenderInRecovery wrote:
Thu Jul 04, 2019 6:44 am
I had a similar urge to you but with a higher income. A year ago I went to purchase a new car and was tempted by luxury vehicles because like you I had grown my income substantially and felt “I had earned it”. I even admire cars and research their performance, technology, reviews, etc in my spare time. Eventually you realize that that these big purchases you play out in your head all eventually just fade into the background during ownership. So I ended up buying a new Honda Accord over the new Audi A4 I was tempted by. For example, If you bought a Tesla today you would be stoked and you would spend multiple days maybe even weeks identifying new things you enjoyed about it. After a couple weeks that feeling would subside and it would just become your method of transport. If you read up on behavioral economics you’ll see there is tons of psychological studies demonstrating we actually gain the most satisfaction anticipating a reward or in this case a purchase you’d be rewarding yourself with. Once we get the expected reward the satisfaction drops back to baseline and we shift our focus.

Read one or both of these books:
Happy Money: The Science of Smarter Spending
Why Smart People Make Big Money Mistakes

Lastly, I’d ramp up the loan repayment to your father. He’ll appreciate it and it will clear you conscious when you are paid in full. Then you can shift the money you were paying him into saving/investing. Create a financial milestone goal, like 300k or 500k in assets then reward yourself with something then.
I fully agree with this. And that is exactly why I preach to save up the cash and pay cash for it. It forces you to be patient and prevents you from making a decision when you're in that hyped up anticipatory state of mind you describe so well. If you still want the car after you have the cash needed to pay for it, then there's nothing wrong with buying it at that point. Chances are, once you have that much cash on hand, you probably won't want it that much anymore.

dmk395
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by dmk395 » Thu Jul 04, 2019 6:56 am

Pay your dad off. Save a bit more, then go for the car. With your income, savings should be much higher.

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Watty
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by Watty » Thu Jul 04, 2019 6:57 am

sjl333 wrote:
Thu Jul 04, 2019 1:03 am
But overall, it seems that I should wait, pay off my dad, save a bit more , before pulling the trigger. I'll think about it some more.
Once you have paid back your dad and can pay cash for the car that will be a different situation.

sp0704
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by sp0704 » Thu Jul 04, 2019 9:08 am

As others have said, your income is now excellent and it's not really an "affordability" question, rather than should you do this. I would probably wait two years. Pay off your dad (even if he doesn't need it, it's not that much to wipe out for peace of mind) and get your money working more for you by building up more investments. Even with a few hundred grand (or more) at that point, I wouldn't pay cash, but would finance or lease, to keep money invested.

gmc4h232
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by gmc4h232 » Thu Jul 04, 2019 9:35 am

sjl333 wrote:
Thu Jul 04, 2019 1:03 am

Keep in mind, the salary will only continue to grow. In the next couple of years i expect to be over 300K+ yearly. Job is stable. Industry is stable.
Spoken like a true 20 year old...

bzcat
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by bzcat » Thu Jul 04, 2019 9:44 am

My coworker pre-ordered the Model 3. I asked him what his biggest annoyance/regret with it was, and he said getting the performance package. He said it was fun for a while, but of very limited use after that.

Ron Ronnerson
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by Ron Ronnerson » Thu Jul 04, 2019 12:00 pm

There is an underlying question that you might want to think about that is bigger than just this one purchase: Why do you feel the urge to spend so much money within one month of receiving a substantial raise? The timing itself should make you want to pause and reflect.

On a related note, you said you're expecting an income of $300k+ in a couple of years but life doesn't always go according to plan. Don't count your chickens before they hatch.

Rather than focusing on if you can buy this car, think about why you want to have it at this exact moment in time. If you decide to buy it, at least first acknowledge to yourself that it will cost you about $100k of your pre-tax salary and that money could grow substantially in the decades ahead if invested.

Once this itch is scratched, what might you buy next? This really is more than just about a car. If you were advising a friend, what would you suggest that they do with a sudden increase in income at a relatively young age?

Anyway, I'm posing a bunch of questions to you so that you can hopefully step back and really reflect before making a big purchase decision like this. I'm not saying you shouldn't buy it but, personally, I don't think it's the best idea.

*edited for typos

Big Dog
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by Big Dog » Thu Jul 04, 2019 12:13 pm

I must admit, I do spend a lot of money, but I work really hard to offset it (as can be seen with my huge salary growth).
If you were my millennial, I'd recommend that you cut back expenses to continue to build up your assets. Perhaps save for a downpayment for a house/condo? Also, agree with others, 'share' the good news about your pay increase with your dad by paying him back now. In a few months, if you still have the itch for a Model 3, think hard about the P. Unless you are going to run it a track, what's the point? instead, check out the fully-loaded AWD.

(I have two model 3's and love 'em, but the P seemed like a waste of money when the speed limit is 65 and stop and go traffic averages 25.)

bubbadog
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by bubbadog » Thu Jul 04, 2019 12:25 pm

Isn't a fully loaded Model 3 performance closer to $70,000?

When I configured one on their website, I got a purchase price of $68,900.

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sjl333
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by sjl333 » Thu Jul 04, 2019 12:32 pm

All,

Thanks for the advice.

I'll keep my clunker for a bit longer (honda accord, although, its actually a very nice car from a practical perspective, very low maintenance costs, very durable and reliable).

I live in a LCOL to MCOL state - but plan to move back to SoCal after two years. I'll go ahead and pay off my dad and plan to save 200K - 300K over the next two years and put a down payment on a house back in Socal....I guess the model 3 can wait.

I'll get a model 3 after I am able to purchase a home and have enough of a downpayment for the car (ideally i'll get the car when I have enough cash on end so I don't need to finance).

Also, I do agree, maybe the P3D is pushing it. I heard the car is amazing, but may not be practical. I think the LR version may be the best medium. I plan to test drive both cars just to get a feel for each, and maybe rent one for a day just to scratch that itch for the time being.

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sjl333
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by sjl333 » Thu Jul 04, 2019 12:33 pm

bubbadog wrote:
Thu Jul 04, 2019 12:25 pm
Isn't a fully loaded Model 3 performance closer to $70,000?

When I configured one on their website, I got a purchase price of $68,900.
yes its 70K, was planning on putting a 10K downpayment.

FBanks
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by FBanks » Thu Jul 04, 2019 12:50 pm

NICE WORK! You've paid off a lot of debt, grown your income exponentially, and amassed a fair amount. Don't take your foot off the gas now. With a 7% annual return and a $150k annual savings rate (invested in low cost, total stock market index funds across all accounts), you could have $1M in 5 years and no debt. Put that income to good use while your young. As you age and start a family you may not want to work as much or you could get laid off. Build networth aggressively while you have an abundance of energy and passion for the work. Get rid of debt and stack a 7-figure portfolio first. Then use cash to buy whatever car you want. You can have it all, just not all at once! :sharebeer

JamNut
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by JamNut » Thu Jul 04, 2019 1:49 pm

Congrats on the recent income increase! That's fantastic - looking forward to hearing about your successes for many years to come!

Just the fact that you're asking here is an indicator that you're probably making more introspective and forward-looking decisions than I was about 10 yrs back. If you are seeking more certainty around what is important for you, here are a few ideas/suggestions for your consideration:

1) Read The Millionaire Next Door. (Thomas Stanley, 2010) Summary: most rich people don't look nearly as rich as they are. That's usually how/why they became rich.
2) Read How to Fail at Almost Everything and Still Win Big (Scott Adams, 2010) Summary: Good habits and control of one's destiny is way more valuable than things/stuff, and money is a helpful enabler in this endeavor.
3) Write down an ordered/ranked list of what you think will be most important to you in the next 10 years/what you want your life to look like. E.g. my list currently looks something like this:

- Have sufficient reserves (~30x current annual expenses) saved up to retire early/intermittently with no change in lifestyle.
- Wake up every AM with no fear about walking away from my job/trying something different.
- Avoid spending my day doing things that I don't want to do (no high traffic commute, boring job, etc.)
- Have a safe, happy, low-stress family/home life.
- Live in a nice home/have nice things that aren't TOO nice that I worry about them getting lost/stolen/burned to the ground.
- Be respected by my peers.
- Be quietly generous with my time and wealth.
- ...
- Drive a 10-year old Tesla. ;-)

Sorry, that last one is a bit snarky... but honestly I just purchased a Tesla this spring, and I *do* plan to own it for at least 8 years, or 200k miles (ideally on original battery), and/or until it saves my life in a crash (as the safest car ever built.) But I also only pulled the trigger on the Tesla purchase since I'm already well on track with all my higher priority items, since my dog is comfy in the back seat of the Tesla for our commute to work (he vastly prefers the smoothness of an electric drivetrain over a manual transmission), and because the Tesla also ticked the safety box for me, which was an important factor. Ten years back is a different story for me... I think maybe the BMW M3 was the hotness... guess what I was driving? A gently used 1995 Jeep Grand Cherokee with over 250k miles on it...

Even after recently purchasing the Tesla (which is a great car, if the price doesn't give you ulcers) I honestly found that I was actually nearly as happy with my trade-in car, a $20k (used) Subaru STI. At <1/3 of the cost of the Tesla, I felt that every day I could drive that car like I stole it, put ungodly things/animals in the back of it and not worry about the upholstery holding up, and even go so far as to drive it into a ditch and not think twice about how I was going to be able to afford to replace it. In the end, the relative safety and dog-friendliness of the Tesla pushed me over the edge....

On the outside the Subaru looked (mostly) like any other daily driver car, so I also never really had to worry about it being scratched/stolen/ICE'd, etc. The Tesla unfortunately offers no such 'luxury'... :?

Edit: if helpful, financial decisions I regret making over the past 10 years:

1) Buying "too much" house/property relative to my net worth at the time. (source of stress/worry)
2) Buying said home ~45 mins from work. (big waste of time)
3) Using a financial advisor; not learning about index funds/law of averages earlier.(big waste of money)

pennylane
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Re: 30 y/o financial check up. How am I doing? Can I buy a model 3 performance?

Post by pennylane » Thu Jul 04, 2019 2:57 pm

You may not need the top of the line Tesla M3. I thought I needed it too and drove a base RWD lowest battery pack and it’s plenty fast - I have a 70 mile round trip commute and I’m just ok. I am a few years younger than you and don’t make as much as you do but my net worth is higher.

I justified getting it due to the safety and I could afford it. Go for it, test drive the non performance though, you’ll be surprised.

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