At what networth is okay to splurge on a 200k car ? (Tesla roadster)

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sjl333
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At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by sjl333 »

Hi all,

Still young and in the accumulation phase.

Was wondering what networth you need to be able to buy a 200k car , even if it extends your retirement age by a couple of years ?

Note, car would be paid for in all cash.

Thanks.

edit: For those of you wondering about my financials ... I have a net worth at 375k, age 31, salary is 400k+/year. Still a long way to go for me.
Last edited by sjl333 on Fri Sep 25, 2020 6:46 pm, edited 1 time in total.
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Watty
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Watty »

sjl333 wrote: Fri Sep 25, 2020 1:32 pm Was wondering what networth you need to be able to buy a 200k car , even if it extends your retirement age by a couple of years ?
To be able to afford a $200K car you should be at a point where it should not impact your retirement age.
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Brianmcg321
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Brianmcg321 »

$5,000,000

Have you considered a used Camry.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Jack FFR1846 »

Brianmcg321 wrote: Fri Sep 25, 2020 1:40 pm $5,000,000

Have you considered a used Camry.
I'd agree with that.

I thought a Tesla Roadster cost $250k.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by pasadena »

Watty wrote: Fri Sep 25, 2020 1:39 pm
sjl333 wrote: Fri Sep 25, 2020 1:32 pm Was wondering what networth you need to be able to buy a 200k car , even if it extends your retirement age by a couple of years ?
To be able to afford a $200K car you should be at a point where it should not impact your retirement age.
This. No car is worth two years of my life.
sport
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by sport »

Your net worth should be sufficiently high that you do not need to ask that question. If you have to ask "can I afford it", the answer is "no".
IowaFarmBoy
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by IowaFarmBoy »

Well, technically, with a net worth of 200k you could buy it for cash if those assets are liquid.

Seriously, though, it's hard to give you an answer to this without a lot more info. What is your salary? What else do you splurge on- house, vacations, restaurants, etc?

I also think if this really delays your retirement a couple of years, your future self will regret it....
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by MarkRoulo »

sjl333 wrote: Fri Sep 25, 2020 1:32 pm Hi all,

Still young and in the accumulation phase.

Was wondering what networth you need to be able to buy a 200k car , even if it extends your retirement age by a couple of years ?

Note, car would be paid for in all cash.

Thanks.
This is a value judgement. You are trading future value for present value.

Note that:
  • You are only young once.
  • You might die early and miss the future.
  • Being poor and old sucks. Especially if you could have avoided it.
Tesla used to lease Roadsters. For something around $2,000/month you can probably rent on with a three
year commitment, so you'd "only" be out $24Kx3 = $72K. Alternately, you could probably sell the one you
purchased after a few years if you decide you've had your fun.

Note that few year used Alfa Romeos start at around $25,000 - $30,000 ....
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TinyElvis
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by TinyElvis »

Never. It's a doo-dad and a waste of money.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by sjt »

When there aren't kids going hungry in your country
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by caffeperfavore »

sport wrote: Fri Sep 25, 2020 1:44 pm Your net worth should be sufficiently high that you do not need to ask that question. If you have to ask "can I afford it", the answer is "no".
+1
H-Town
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by H-Town »

sjl333 wrote: Fri Sep 25, 2020 1:32 pm Hi all,

Still young and in the accumulation phase.

Was wondering what networth you need to be able to buy a 200k car , even if it extends your retirement age by a couple of years ?

Note, car would be paid for in all cash.

Thanks.
No car is worth it if it means that I have to extend my retirement age by a couple of years. NONE.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Kenkat »

$4-5 million and on an upward trajectory from there.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by dknightd »

sport wrote: Fri Sep 25, 2020 1:44 pm Your net worth should be sufficiently high that you do not need to ask that question. If you have to ask "can I afford it", the answer is "no".
sad, but true
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antwerp
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by antwerp »

Can you lease it? The speed at which technology improves now, that car may be obsolete in 3 years.
neverpanic
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by neverpanic »

sport wrote: Fri Sep 25, 2020 1:44 pm Your net worth should be sufficiently high that you do not need to ask that question. If you have to ask "can I afford it", the answer is "no".
Until you're at or near 8 figures as a young person, try to splurge only on appreciating assets and experiences.

When you achieve "**** you" money status, pull the trigger.
I am not a financial professional or guru. I'm a schmuck who got lucky 10 times. Such is the life of the trader.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by smitcat »

Jack FFR1846 wrote: Fri Sep 25, 2020 1:41 pm
Brianmcg321 wrote: Fri Sep 25, 2020 1:40 pm $5,000,000

Have you considered a used Camry.
I'd agree with that.

I thought a Tesla Roadster cost $250k.
That would be for the founders series.
snowox
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by snowox »

Rent one for two weeks. After that its just a used car
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SmileyFace
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by SmileyFace »

$2.5M if you are single.
$5M if you have a spouse and 2 kids.
$5.5M if you have a spouse and 4 kids.
$40K if you are single and have been diagnosed with terminal cancer.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by burritoLover »

I assume you are talking about the upcoming Roadster. You could probably buy it, play with it for awhile, and sell it pretty close to what you paid for it (less tax). Tesla's have excellent resale value - even the more pedestrian model 3 loses about 10% of its value after 3 years which is incredible.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Ron »

I understand that there is one in space that you could probably get for free if you can cover the transportation costs to deliver it to your door :oops: ...

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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Jack FFR1846 »

smitcat wrote: Fri Sep 25, 2020 1:59 pm
Jack FFR1846 wrote: Fri Sep 25, 2020 1:41 pm
Brianmcg321 wrote: Fri Sep 25, 2020 1:40 pm $5,000,000

Have you considered a used Camry.
I'd agree with that.

I thought a Tesla Roadster cost $250k.
That would be for the founders series.
Ah, that's why that number stuck in my head.

Alternately, one could skip this pedestrian car and buy something more exotic. Note in the used section, a Bugatti, and a few Paganis.

https://www.millermotorcars.com/
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by KlangFool »

Watty wrote: Fri Sep 25, 2020 1:39 pm
sjl333 wrote: Fri Sep 25, 2020 1:32 pm Was wondering what networth you need to be able to buy a 200k car , even if it extends your retirement age by a couple of years ?
To be able to afford a $200K car you should be at a point where it should not impact your retirement age.

+1,000.


KlangFool
RJC
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by RJC »

There is no reason to get a new car over 50-60k IMO.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by mak1277 »

RJC wrote: Fri Sep 25, 2020 2:19 pm There is no reason to get a new car over 50-60k IMO.
Key word (letter) here being "M". Fortunately we all have different O's.

I have north of $5 million NW and would not spend $200k on a car, but I understand why you'd want to. I certainly would need to be >$2 million before I even thought of something like this.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Escapevelocity »

Of course, it depends. But, I would scoff at anyone with a NW below $3 million spending that much on a toy of any sort.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Lee_WSP »

sjl333 wrote: Fri Sep 25, 2020 1:32 pm Hi all,

Still young and in the accumulation phase.

Was wondering what networth you need to be able to buy a 200k car , even if it extends your retirement age by a couple of years ?

Note, car would be paid for in all cash.

Thanks.
When it is 1/10,000th of your income.

See this article for my reasoning.

https://ofdollarsanddata.com/climbing-t ... th-ladder/
azanon
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by azanon »

sjl333 wrote: Fri Sep 25, 2020 1:32 pm Hi all,

Still young and in the accumulation phase.

Was wondering what networth you need to be able to buy a 200k car , even if it extends your retirement age by a couple of years ?

Note, car would be paid for in all cash.

Thanks.
For me, never, if it's going to have an effect on my retirement date. That must be one super fun job you have for you to be willing to spend up to 2 years more at it just for a more expensive car.

I "splurged" on a car once (I still have it). A 31K autobahn VW GTI. That's as opposed to a 16K dollar Honda fit. That's splurging to me.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Nicolas »

You can afford any car when your net worth increases or decreases by that amount on an average market day. It’s the livesoft rule.
Last edited by Nicolas on Fri Sep 25, 2020 3:02 pm, edited 1 time in total.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by coffeeblack »

DaftInvestor wrote: Fri Sep 25, 2020 2:13 pm $2.5M if you are single.
$5M if you have a spouse and 2 kids.
$5.5M if you have a spouse and 4 kids.
$40K if you are single and have been diagnosed with terminal cancer.
What if you have a spouse, no kids and a dog? ;)
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by bantam222 »

Agree with ~5M number. That is enough to lock in solid retirement. Everyone over that is stuff you don’t really need and would be blowing on other dumb stuff. So if you choose the car to be your splurge. So be it.

Be sure to look at opportunities cost of that 200k. For example, get private jet and fly to x for trip. Or fly first class rest of your life. Or ...
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by adamthesmythe »

Cars are sometimes stolen or damaged and insurance often doesn't pay for the loss in value.

I would want enough $ that the sudden loss of 100K or so would not disturb me.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by SmileyFace »

coffeeblack wrote: Fri Sep 25, 2020 2:50 pm
DaftInvestor wrote: Fri Sep 25, 2020 2:13 pm $2.5M if you are single.
$5M if you have a spouse and 2 kids.
$5.5M if you have a spouse and 4 kids.
$40K if you are single and have been diagnosed with terminal cancer.
What if you have a spouse, no kids and a dog? ;)
Forgot that one! It depends on the spouse's disposition - I would say 3.5M - but if you have that between the two of you - you risk half it going away with a divorce if you come home with a $200K car.
:sharebeer
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by BruDude »

Have you considered alternate options that hold their value such as a 911 GT3 or GT3RS? Drive it for a couple years then sell for close to what you paid. I drove my GT3 for 14 months and sold it for $1,000 less than I paid for it. I would venture to guess that the Tesla roadster will be worth less than half its retail price within 3 years.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by coffeeblack »

DaftInvestor wrote: Fri Sep 25, 2020 2:59 pm
coffeeblack wrote: Fri Sep 25, 2020 2:50 pm
DaftInvestor wrote: Fri Sep 25, 2020 2:13 pm $2.5M if you are single.
$5M if you have a spouse and 2 kids.
$5.5M if you have a spouse and 4 kids.
$40K if you are single and have been diagnosed with terminal cancer.
What if you have a spouse, no kids and a dog? ;)
Forgot that one! It depends on the spouse's disposition - I would say 3.5M - but if you have that between the two of you - you risk half it going away with a divorce if you come home with a $200K car.
:sharebeer
Perhaps only if it's a Tesla. :D :mrgreen: :beer
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Firemenot »

No idea. But if I were to pay 200k plus for a car I’d look for an investor category car that’s likely to hold much of its value over time and maybe even appreciate.

Check out the auctions at Monterey car week for ideas.
Last edited by Firemenot on Fri Sep 25, 2020 3:12 pm, edited 1 time in total.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by S4C5 »

sjl333 wrote: Fri Sep 25, 2020 1:32 pm Hi all,

Still young and in the accumulation phase.

Was wondering what networth you need to be able to buy a 200k car , even if it extends your retirement age by a couple of years ?

Note, car would be paid for in all cash.

Thanks.
I would forget about this.
Taxes on a 200k car is painful. Maintenance is worse. Look up what it takes to do an oil change on a Bugatti (not a 200k car, but you get my point).
Buy a used car that was 200k new. The depreciation on these things is phenomenal.
Yes, many people can technically afford to purchase a 200k car.
But the amount of income and assets required to make the taxes and ownership costs seem like a drop in the bucket is probably well in the 7 figure range.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by HoberMallow »

They just announced preorders for the trimotor Model S for only $140k. They claim it ran a 1:30.2 at Laguna Seca, which is 0.5s faster than a McLaren P1 :shock:. That seems adequately fast, you save $60k, and have the seats and cargo space to take the family on a road trip.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by S4C5 »

Firemenot wrote: Fri Sep 25, 2020 3:11 pm No idea. But if I were to pay 200k plus for a car I’d look for an investor category car that’s likely to hold much of its value over time and maybe even appreciate.
Porsche is really the only answer here. Those cars, especially the 911s, hold their value phenomenally well.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Firemenot »

My former department head bought a 200k car. He was worth over 100 million at the time. Pocket change for him.

I should mention that his wife refused to get in the car or ever ride with him in it. She said he looked ridiculous in it.
Last edited by Firemenot on Fri Sep 25, 2020 3:18 pm, edited 1 time in total.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by JSparks »

BruDude wrote: Fri Sep 25, 2020 3:01 pm Have you considered alternate options that hold their value such as a 911 GT3 or GT3RS? Drive it for a couple years then sell for close to what you paid. I drove my GT3 for 14 months and sold it for $1,000 less than I paid for it. I would venture to guess that the Tesla roadster will be worth less than half its retail price within 3 years.
This is exactly right. The OP is only really “spending” the resale loss amount and insurance. He is not disposing of $200k. Some Porsche GT cars simply do not depreciate very much and so very little is spent to enjoy that time with a car of this magnitude. I’ve been there, done that with some Porsche GT cars and it was worth it. I also owned a certain other high end car for 10 years and lost only $10k at resale having put 40k miles on it. Not many cars like this out there but they do exist.

And maintenance was a fairly easy DIY for most jobs.
Last edited by JSparks on Fri Sep 25, 2020 3:18 pm, edited 2 times in total.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by barnaclebob »

Brianmcg321 wrote: Fri Sep 25, 2020 1:40 pm $5,000,000

Have you considered a used Camry.
Ive got long term plans *cough* daydreams for a 200k boat and id probably need to be at about 5mm to be able to do that. House would have to be paid off and retirement date set in stone.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by 123 »

sjl333 wrote: Fri Sep 25, 2020 1:32 pm ...even if it extends your retirement age by a couple of years ?..
You may feel quite differently when you reach retirement age and have to wait a couple of years.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by TomatoTomahto »

I would say at whatever point the only people losing out are your heirs. And then, if you were intending to leave money to charity, even more.

For the sake of argument, somewhere between $5M and $15M, depending on your age, number of kids, philanthropic intentions, etc.

But, again, if you have to ask, you don’t have enough.

Btw, is it only me, but does Livesoft’s Rule really apply to a day’s losses? My car allowance is much higher on losing days than gaining days. :oops:
Okay, I get it; I won't be political or controversial. The Earth is flat.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Fallible »

sjl333 wrote: Fri Sep 25, 2020 1:32 pm Hi all,

Still young and in the accumulation phase.

Was wondering what networth you need to be able to buy a 200k car , even if it extends your retirement age by a couple of years ?

Note, car would be paid for in all cash. ...
It's not just a matter of the car's purchase price, but the high price of running and maintaining it. Another question to ask yourself is what else, other than a couple of years of retirement, are you ready to give up in your life, things you would have to give up or cut back on even if you had the net worth to avoid going outright broke.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by stoptothink »

My older brother and best friend have both recently splurged on $200k+ cars (Porsche Turbo S and R8) and neither has a net-worth remotely close to any suggestions in this thread. I'm pretty sure the purchase price of the Porsche was pretty close to (if not more) than my brother's actual total net-worth. But that's the real world and not Bogleheads. I'm not condoning it, I've got a 7-figure net-worth and share a $15k compact car with my wife despite loving cars.
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bligh
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by bligh »

For me personally, at a minimum, I would buy a 200K car (or even a 500K car) only if BOTH the following conditions were met

1) I was already easily financially independent at my target level of spending from my portfolio (along with any future expected costs like kids educations and such), as well as owned my home outright.

2) I could cash flow the purchase from my income over the next year. ie. Buying the car would simply mean I was not going to be saving the money this year. If, for example, I was going to end up saving just $100K this year instead of $300K because of this purchase. I would buy it in cash, but have my income replenish the funds over the next year.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by BruDude »

stoptothink wrote: Fri Sep 25, 2020 3:27 pm My older brother and best friend have both recently splurged on $200k+ cars (Porsche Turbo S and R8) and neither has a net-worth remotely close to any suggestions in this thread. I'm pretty sure the purchase price of the Porsche was pretty close to (if not more) than my brother's actual total net-worth. But that's the real world and not Bogleheads. I'm not condoning it, I've got a 7-figure net-worth and share a $15k compact car with my wife despite loving cars.
I don’t have nearly the amount suggested in this thread but have had several six-figure cars. After owning 4 Porsche’s I am actually up about $30k overall having sold 3 for more than I paid and one for $1k less than I paid. If you know what you’re buying and how the market functions you can definitely drive these cars for free or close to it.

Any brand new Tesla will get killed on resale. OP may not particularly care but the value proposition of a Porsche in a comparable price range is much better IMO, and a lot more fun.

As someone stated above, you aren’t paying for the car and the value just becomes zero. You are paying the cost of depreciation and maintenance as long as you can handle floating the purchase price with cash or a loan. Maintenance on a Porsche GT car is not that expensive, especially if you have a good independent shop nearby. Resale is insanely good if you buy the right car.

In my state there is no sales tax on private party sales which makes a huge difference at this price level and also keeps resale artificially high compared to a dealer as the tax rate here is 8%. I have bought and sold at least one car pretty much every year for the last 10+ years and overall I don’t think I’ve lost a penny.
Last edited by BruDude on Fri Sep 25, 2020 3:39 pm, edited 1 time in total.
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Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by Keenobserver »

Enough to not have to come to this forum and ask. It should be money you dont notice missing.
hightower
Posts: 786
Joined: Mon Dec 12, 2016 2:28 am

Re: At what networth is okay to splurge on a 200k car ? (Tesla roadster)

Post by hightower »

sjl333 wrote: Fri Sep 25, 2020 1:32 pm Hi all,

Still young and in the accumulation phase.

Was wondering what networth you need to be able to buy a 200k car , even if it extends your retirement age by a couple of years ?

Note, car would be paid for in all cash.

Thanks.
For me, it's not about Networth when it comes to deciding how much car is "affordable," it's more about income. I think 20% of your income max towards a car is reasonable. That's for your daily driver. So, if you're making 1 million a year, a Tesla Roadster is totally affordable. Now, for a Tesla Roadster, which will not be a very practical daily driver (highly doubt it will have much cargo or passenger space), you need to consider why you're buying it. Is this just your fun weekend car? Are you actually thinking you'll use it as a daily driver? If so, everyone that sees you in it will think you're a douche driving it to a grocery store. You won't attract quality women driving a super expensive, flashy sports car if that's what you're thinking. You might attract some plastic gold diggers if that's what you're into. If you're "young and in the accumulation phase" I'm assuming you don't have the means to pay cash for this now? What makes you think you'll even want one when you do have the cash for it?

Regardless, for a purchase like this, you need to consider a lot of things beyond networth. 1. Will it bring you lots of actual joy in your life? If so, save for it slowly with cash that you would otherwise be throwing away on drinking at bars or silly hobbies and use that cash to buy yourself one. 2. Will it mean your wife or kids won't get to do the things they want to do in a given year because daddy needs a car that can go 0-60 in 1.9 seconds? If so, daddy is a selfish jerk, lol, and you shouldn't even be thinking of it.
In my opinion, spending 200k on a car is for people who have money to throw away. 1 million in income, no debt, 10 million in the bank...sure go right ahead and buy one. You'll make some people jealous, but most people will just think you're a douchy bro. But, if you're having fun, who cares?
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