buying a new van to live in, should i sell my daily driver?

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zie
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Re: buying a new van to live in, should i sell my daily driver?

Post by zie »

boglechiq wrote: Sun Sep 18, 2022 6:29 pm
i think in addition i will also explore jobs to earn extra income.
I like the plan, but this extra income really isn't needed as long as you keep your future consumption where it's currently at(or even maybe a little higher). But if it helps you sleep well at night and you enjoy the job, by all means, have at it.
Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates. -Hetty Green
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boglechiq
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Re: buying a new van to live in, should i sell my daily driver?

Post by boglechiq »

the market is down another 1% today. and my net worth is down another 23k.

I'm having serious thoughts about buying the van at all now. i only have 30k in liquid cash. i would have to finance the van.

when i ordered the van in September 2021, i had 3.6 million and now I'm at 2.8 million. i also hadnt purchased the Tesla yet (another depreciating asset). i was also fairly sure i was going to live in the van. it's been awhile now, and I'm not entirely sure about things. when i see the market like it is, it makes me wonder whether i should just live at home with my mother, even though I hate my mother, but to weather out the financial storm until it passes. I'm feeling extremely anxious about my financial situation and whether it's a good idea to buy this van.

im on the plane now to pick up the van and I'm flipping out.

is there any clear path here? or is this all just a toss up on what decision to make?
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cchrissyy
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Re: buying a new van to live in, should i sell my daily driver?

Post by cchrissyy »

hey, i'm sorry for the hard time!

the feelings you describe sound really familiar to how people who put an offer on a new house second guess themselves or get seriously cold feet and back out when they think about the big numbers on the papers they have to sign.

it's normal to be nervous about a big and important purchase. but that feeling is a phase of the process and it will pass.

it might help to remind yourself nothing here is irreversible. you have many choices and can change your mind whenever you want. you can afford many different paths, and that includes you can afford making a sub-optimal decision right now. the stakes just aren't that high.

so my advice is get the van you wanted. try it for a year. don't rush any decision about work or the tesla. definitely don't move in with people you don't like. and don't get a job unless you think it's good for your mental and physical health. you don't need a job. you need to improve your anxiety and quality of life.
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belowaverage
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Re: buying a new van to live in, should i sell my daily driver?

Post by belowaverage »

boglechiq wrote: Tue Sep 20, 2022 10:27 am the market is down another 1% today. and my net worth is down another 23k.

I'm having serious thoughts about buying the van at all now. i only have 30k in liquid cash. i would have to finance the van.

when i ordered the van in September 2021, i had 3.6 million and now I'm at 2.8 million. i also hadnt purchased the Tesla yet (another depreciating asset). i was also fairly sure i was going to live in the van. it's been awhile now, and I'm not entirely sure about things. when i see the market like it is, it makes me wonder whether i should just live at home with my mother, even though I hate my mother, but to weather out the financial storm until it passes. I'm feeling extremely anxious about my financial situation and whether it's a good idea to buy this van.

im on the plane now to pick up the van and I'm flipping out.

is there any clear path here? or is this all just a toss up on what decision to make?
Not sure what you mean by "clear path" but if you were my relative here's what I would say to you:

- Be grateful to "only have 30K" in liquid cash. The average person can't afford a 1K emergency.....
- If you are "freaking out" over a 1% drop or bear market, change your asset allocation to something more conservative, regardless of your age.
- Continue the van venture, you would regret not experiencing it. You have more money accumulated than most people will have saved in their entire life. Consider yourself extremely fortunate.
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samsoes
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Re: buying a new van to live in, should i sell my daily driver?

Post by samsoes »

Dude, you're a millionaire. Why do you want to live in a van?
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galawdawg
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Re: buying a new van to live in, should i sell my daily driver?

Post by galawdawg »

boglechiq wrote: Tue Sep 20, 2022 10:27 am the market is down another 1% today. and my net worth is down another 23k.

I'm having serious thoughts about buying the van at all now. i only have 30k in liquid cash. i would have to finance the van.

now I'm at 2.8 million. when i see the market like it is, it makes me wonder whether i should just live at home with my mother, even though I hate my mother.

im on the plane now to pick up the van and I'm flipping out.

is there any clear path here? or is this all just a toss up on what decision to make?
You have $2.8 million and you have to either finance the purchase of a van or live with your mother, who you hate???

Yes, there is a clear path here. If you really want to live in a van, buy it with some of your $2.8 million and live in it. If you don't, rent an apartment or house or buy a place with some of your $2.8 million.

But good grief, you are a very wealthy individual by any reasonable standard...move out of your mother's place. :oops:
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Re: buying a new van to live in, should i sell my daily driver?

Post by sailaway »

samsoes wrote: Tue Sep 20, 2022 11:40 am Dude, you're a millionaire. Why do you want to live in a van?
OP isn't even consistent from one thread to the next, so who knows what they really want. However, it is so much easier to live in a van as a millionaire than as someone with limited options! It can be fun when it is a choice.
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SmileyFace
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Re: buying a new van to live in, should i sell my daily driver?

Post by SmileyFace »

boglechiq wrote: Tue Sep 20, 2022 10:27 am the market is down another 1% today. and my net worth is down another 23k.

I'm having serious thoughts about buying the van at all now. i only have 30k in liquid cash. i would have to finance the van.

when i ordered the van in September 2021, i had 3.6 million and now I'm at 2.8 million. i also hadnt purchased the Tesla yet (another depreciating asset). i was also fairly sure i was going to live in the van. it's been awhile now, and I'm not entirely sure about things. when i see the market like it is, it makes me wonder whether i should just live at home with my mother, even though I hate my mother, but to weather out the financial storm until it passes. I'm feeling extremely anxious about my financial situation and whether it's a good idea to buy this van.

im on the plane now to pick up the van and I'm flipping out.

is there any clear path here? or is this all just a toss up on what decision to make?
Last year you had a 1991 Chevy Van and were looking at a $200K RV. 15 months later you have a Volkswagen Van, a Tesla, and are looking at a Ford Transit.
Maybe figure out your vehicle requirements - write them down or something - then come back here for advise.
I don't know what to suggest - admittedly being a "home" has never been a vehicle requirement of mine so it's hard to relate.
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galawdawg
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Re: buying a new van to live in, should i sell my daily driver?

Post by galawdawg »

SmileyFace wrote: Tue Sep 20, 2022 12:44 pm Last year you had a 1991 Chevy Van and were looking at a $200K RV. 15 months later you have a Volkswagen Van, a Tesla, and are looking at a Ford Transit.
Maybe figure out your vehicle requirements - write them down or something - then come back here for advise.
I don't know what to suggest - admittedly being a "home" has never been a vehicle requirement of mine so it's hard to relate.
Actually it is more than "looking". Last year the OP said that they signed a purchase agreement on the $200k RV and the last anyone heard until I asked about it upthread was that they actually purchased the RV.

Now, they aren't just "looking" at a Ford Transit but said they are actually on a plane on the way to pick it up. :shock:

Perhaps the help that OP needs isn't financial or consumer advice...
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boglechiq
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Re: buying a new van to live in, should i sell my daily driver?

Post by boglechiq »

galawdawg wrote: Tue Sep 20, 2022 1:09 pm
SmileyFace wrote: Tue Sep 20, 2022 12:44 pm Last year you had a 1991 Chevy Van and were looking at a $200K RV. 15 months later you have a Volkswagen Van, a Tesla, and are looking at a Ford Transit.
Maybe figure out your vehicle requirements - write them down or something - then come back here for advise.
I don't know what to suggest - admittedly being a "home" has never been a vehicle requirement of mine so it's hard to relate.
Actually it is more than "looking". Last year the OP said that they signed a purchase agreement on the $200k RV and the last anyone heard until I asked about it upthread was that they actually purchased the RV.

Now, they aren't just "looking" at a Ford Transit but said they are actually on a plane on the way to pick it up. :shock:

Perhaps the help that OP needs isn't financial or consumer advice...
i didn't pull the trigger on that van last year in the spring. i actually did buy a different van for 140k in may, but sold it because it didn't meet my needs. i continued living in the studio and then in December i impulse bought the tesla.

i ordered the Transit in September, before i impulse bought the Tesla. due to shortages ford finally delivered the van last week and it's sitting at the dealership.

sorry, im not keeping everybody here up to date on everything that i do. i need to do a better job of that. i leave out details sometimes to make the main points more precise
Last edited by boglechiq on Tue Sep 20, 2022 1:42 pm, edited 1 time in total.
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squirrel1963
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Re: buying a new van to live in, should i sell my daily driver?

Post by squirrel1963 »

boglechiq wrote: Sun Sep 18, 2022 6:29 pm I talked to my a close friend and he suggested that I wait 6 months while i have the the Transit before selling the Tesla model Y.

His reason is that 6 months would be ample time to figure out whether i still had a use for the car. And if i still used it a lot then i would still have the car, as opposed to selling it now and then in 6 months realize the ford Transit isn't really for me, i would be car-lesa. In addition the value of the car won't depreciate THAT much in only 6 months time.

furthermore, i think his idea is prudent because my home base is LA, that's where my mother's house is and that's where I put a lot of my stuff. if i end up spending a lot of time in LA then it would be VERY nice to have the Tesla to handle all the traffic driving.

in the meanwhile, i will prep the vintage van to get ready to sale. so i will have 30k in liquidity, and another ~60k in liquidity ready to go or not go with the model y in case shit hits the fan really bad in the market.

i think in addition i will also explore jobs to earn extra income.
Seems like a good plan - I also believe that giving yourself some time to think is almost always a good thing.
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alpenglow
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Re: buying a new van to live in, should i sell my daily driver?

Post by alpenglow »

boglechiq wrote: Tue Sep 20, 2022 10:27 am the market is down another 1% today. and my net worth is down another 23k.

I'm having serious thoughts about buying the van at all now. i only have 30k in liquid cash. i would have to finance the van.

when i ordered the van in September 2021, i had 3.6 million and now I'm at 2.8 million. i also hadnt purchased the Tesla yet (another depreciating asset). i was also fairly sure i was going to live in the van. it's been awhile now, and I'm not entirely sure about things. when i see the market like it is, it makes me wonder whether i should just live at home with my mother, even though I hate my mother, but to weather out the financial storm until it passes. I'm feeling extremely anxious about my financial situation and whether it's a good idea to buy this van.

im on the plane now to pick up the van and I'm flipping out.

is there any clear path here? or is this all just a toss up on what decision to make?
I asked a bit about this upthread. Did you get this money very recently? Did you have it during early 2020? If so, how did you react then given such a big sell-off? It isn't healthy to worry about day to day market moves. They are out of your control. As others have stated, you have significant wealth and can easily afford this van.
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Re: buying a new van to live in, should i sell my daily driver?

Post by HomeStretch »

Despite 2022 market declines, you have a really good-sized portfolio. You should be able to keep portfolio withdrawals low given you have low living expenses given your housing situation. But your most recent post in this thread mentions “impulse” buying relative to several vehicles. Long-term, impulsive large purchases may be more detrimental to your portfolio than market declines. You can’t control the market but you can control impulse buying if you want to.
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Re: buying a new van to live in, should i sell my daily driver?

Post by toomanysidehustles »

[Quote of deleted posts removed by Moderator Misenplace]

How old are you and why would you ever think about living with your mom with the kind of money you have worked hard to save?
Not to get all psychologist here but I think you should buy one of those live/work type of condo's where you can keep your RV in the same spot and treat yourself.
Something like this:
https://bozemanlivework.com/
https://rangepropertiesmontana.com/live ... n-bozeman/
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cchrissyy
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Re: buying a new van to live in, should i sell my daily driver?

Post by cchrissyy »

OP, that background makes sense why you would second-guess your decisions and have anxiety about ever being deprived again. but i think it's also a reason to get the nicer van. you are providing yourself with a safer and more comfortable living environment. you ordered it a year ago and surely put some thought into the decision while you were waiting. so i suggest you follow through on that calm decision making and don't let your temporary anxiety pull the plug. again, you deserve a safe and comfortable place to live and you enjoy van life. so don't ever have to go back where you came from. you have enough to support yourself.
i hope saying it like that is helpful. good luck!
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Re: buying a new van to live in, should i sell my daily driver?

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boglechiq
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Re: buying a new van to live in, should i sell my daily driver?

Post by boglechiq »

I'm at the dealership and the interest rate i was approved for was 10.5%. since it is a commercial van. again I'm continuing to second guess myself. it seems like this is quite high?

i tried to do my own financing online and the offers were even worse.
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galawdawg
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Re: buying a new van to live in, should i sell my daily driver?

Post by galawdawg »

boglechiq wrote: Wed Sep 21, 2022 6:41 am I'm at the dealership and the interest rate i was approved for was 10.5%. since it is a commercial van. again I'm continuing to second guess myself. it seems like this is quite high?

i tried to do my own financing online and the offers were even worse.
Why don't you just pay cash, even if you have to sell some of your holdings?? It makes little sense to pay 10.5% interest (or even 5% interest) when you have $2.8 million at your disposal. Based upon what you have shared, you are not employed and you meet your financial needs with your portfolio. So you can sell enough holdings now to pay cash or sell fewer holdings each month for a few years but pay 10.5% interest for the privilege of "spreading out" those withdrawals.

By the way, you must have stumbled on a very unusual Ford dealership for the sales and finance departments to be open and ready for business at 7:41 am EST. :o Perhaps that is the norm for dealers that sell a lot of commercial vehicles.
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boglechiq
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Re: buying a new van to live in, should i sell my daily driver?

Post by boglechiq »

galawdawg wrote: Wed Sep 21, 2022 6:57 am
boglechiq wrote: Wed Sep 21, 2022 6:41 am I'm at the dealership and the interest rate i was approved for was 10.5%. since it is a commercial van. again I'm continuing to second guess myself. it seems like this is quite high?

i tried to do my own financing online and the offers were even worse.
Why don't you just pay cash, even if you have to sell some of your holdings?? It makes little sense to pay 10.5% interest (or even 5% interest) when you have $2.8 million at your disposal. Based upon what you have shared, you are not employed and you meet your financial needs with your portfolio. So you can sell enough holdings now to pay cash or sell fewer holdings each month for a few years but pay 10.5% interest for the privilege of "spreading out" those withdrawals.

but my portfolio was 3.6 million less than 6 months ago. if it were 6 months ago i would be much less stressed about this but with a 20% draw down in the market it seems like a terrible time to sell shares to parlay it into a depreciating asset?

I'm honestly leaning towards not taking the Transit and making another order for next year.

1. i have listed my current van and i have zero interest so far. it could take over a year to sell my current van?
2. ever since i bought the tesla and moved back to my mother's i have not really used the current van at all. only a handful of times.
homebuyer6426
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Re: buying a new van to live in, should i sell my daily driver?

Post by homebuyer6426 »

boglechiq wrote: Wed Sep 21, 2022 7:25 am
galawdawg wrote: Wed Sep 21, 2022 6:57 am
boglechiq wrote: Wed Sep 21, 2022 6:41 am I'm at the dealership and the interest rate i was approved for was 10.5%. since it is a commercial van. again I'm continuing to second guess myself. it seems like this is quite high?

i tried to do my own financing online and the offers were even worse.
Why don't you just pay cash, even if you have to sell some of your holdings?? It makes little sense to pay 10.5% interest (or even 5% interest) when you have $2.8 million at your disposal. Based upon what you have shared, you are not employed and you meet your financial needs with your portfolio. So you can sell enough holdings now to pay cash or sell fewer holdings each month for a few years but pay 10.5% interest for the privilege of "spreading out" those withdrawals.

but my portfolio was 3.6 million less than 6 months ago. if it were 6 months ago i would be much less stressed about this but with a 20% draw down in the market it seems like a terrible time to sell shares to parlay it into a depreciating asset?

I'm honestly leaning towards not taking the Transit and making another order for next year.

1. i have listed my van and i have zero interest so far. it could take over a year to sell my current van?
2. ever since i bought the tesla and moved back to my mother's i have not really used the current van at all. only a handful of times.
Large draw-downs in the stock market are one reason people keep big emergency funds. It's also one of the reasons people keep a bond allocation, though that would not have helped much in this case. Maybe you should consider lowering your stock allocation if these market valleys are difficult for maintaining your course.

Personally, when the market goes down, I make sure not to check it very often and try to fill my life up with other things that are sufficiently distracting. Hobbies, home improvements, anything I can do to make life a little better at a low cost. It also gives a great perspective to remember how people live in most of the world - on a tiny fraction of what people in the USA have.
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galawdawg
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Re: buying a new van to live in, should i sell my daily driver?

Post by galawdawg »

boglechiq wrote: Wed Sep 21, 2022 7:25 am
galawdawg wrote: Wed Sep 21, 2022 6:57 am
boglechiq wrote: Wed Sep 21, 2022 6:41 am I'm at the dealership and the interest rate i was approved for was 10.5%. since it is a commercial van. again I'm continuing to second guess myself. it seems like this is quite high?

i tried to do my own financing online and the offers were even worse.
Why don't you just pay cash, even if you have to sell some of your holdings?? It makes little sense to pay 10.5% interest (or even 5% interest) when you have $2.8 million at your disposal. Based upon what you have shared, you are not employed and you meet your financial needs with your portfolio. So you can sell enough holdings now to pay cash or sell fewer holdings each month for a few years but pay 10.5% interest for the privilege of "spreading out" those withdrawals.

but my portfolio was 3.6 million less than 6 months ago. if it were 6 months ago i would be much less stressed about this but with a 20% draw down in the market it seems like a terrible time to sell shares to parlay it into a depreciating asset?

I'm honestly leaning towards not taking the Transit and making another order for next year.

1. i have listed my van and i have zero interest so far. it could take over a year to sell my current van?
2. ever since i bought the tesla and moved back to my mother's i have not really used the current van at all. only a handful of times.
You've asked for advice here and the only advice appropriate for Bogleheads is financial and investing advice. You need a place to live. You say you don't want to continue to live with your mother and based upon your posts, you probably shouldn't.

So assuming you aren't going to live there, you need a place to live and there is a financial cost associated with that unless you are going to mooch off somebody else. It doesn't matter what you had in your portfolio six months ago. What matters is what you have now. You are rich by any standard. Wealthy. Well-off. So spend what you need to have a place to live. Where you live and how you live is a personal choice but it will dictate what it will cost you for a place to live. You can rent a place, buy a place or, as you seem to prefer, buy a vehicle to live in. Even with a vehicle, you can spend as little or as much as you want. Move back into your "vintage"van. No acquisition cost. Buy the Transit. Buy a $2 million Newell coach. Or anything in between. We can't help you decide how or where to live, those are matters of personal preference. We can help you look at the financials.

And from financial standpoint, you can easily afford the purchase. Paying interest for it (particularly at those rates) when you have $2.8 million at hand is financially unwise. But if you have this much anxiety about it, then you can always just walk away (assuming you didn't sign a binding purchase agreement), live in your "vintage" van and drive your $65k Tesla while you weigh your options.

If you are concerned about depreciation, buy something pre-owned. For less than the cost of that Transit you could get anything from a towable travel trailer to a Class A motorcoach and avoid taking the "new vehicle" depreciation hit. (Then again, with demand right now on used vehicles, you may be able to sell that Transit in a year and break-even or even make a few dollars.) But since this is a place to live you may not want to think of it as "depreciation" but rather as part of the cost of living...food, clothing and shelter. This is the shelter part. :beer

And consider ignoring the market and stop worrying about it...you can't control it. Instead, think about spending some time counting your blessings. In the US, ninety-eight percent (98%) of us will spend the majority of our adult lives working, saving and investing and never enjoy the financial wealth you already have. And very few people in the world will ever enjoy the freedom of having enough money to meet all of their needs and most of their wants and desires without the necessity of having full-time employment. Gratitude for one's circumstances can bring a fresh perspective to things that might otherwise worry us. :happy



edit: fixed grammar.
Last edited by galawdawg on Wed Sep 21, 2022 8:21 am, edited 1 time in total.
tibbitts
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Re: buying a new van to live in, should i sell my daily driver?

Post by tibbitts »

safari wrote: Fri Sep 16, 2022 6:50 pm How about getting a job, renting a small place for yourself, selling the vintage van and keeping the Tesla that you like so much. It would reduce your anxiety level significantly, if not completely eliminate it.
Whether it would reduce anxiety level would depend on the job. A typical "fun" retirement job that Bogleheads often refer to might not pay enough to offset the increased expenses from rent plus keeping the two newer vehicles (assuming going through with the Transit purchase.)
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Re: buying a new van to live in, should i sell my daily driver?

Post by humblecoder »

boglechiq wrote: Tue Sep 20, 2022 10:27 am the market is down another 1% today. and my net worth is down another 23k.

I'm having serious thoughts about buying the van at all now. i only have 30k in liquid cash. i would have to finance the van.

when i ordered the van in September 2021, i had 3.6 million and now I'm at 2.8 million. i also hadnt purchased the Tesla yet (another depreciating asset). i was also fairly sure i was going to live in the van. it's been awhile now, and I'm not entirely sure about things. when i see the market like it is, it makes me wonder whether i should just live at home with my mother, even though I hate my mother, but to weather out the financial storm until it passes. I'm feeling extremely anxious about my financial situation and whether it's a good idea to buy this van.

im on the plane now to pick up the van and I'm flipping out.

is there any clear path here? or is this all just a toss up on what decision to make?
My advice:

I said this upthread, but it may have gotten lost. Whether you buy the van or not is not going to change your financial situation one iota. Based upon your expenditures you have plenty of money to support you for the rest of your life, even if the market drops further.

If you do buy the van, don't finance it at 10%. Sell some of your portfolio to pay for it if you have to. Even after withdrawing $30K from your portfolio, you'll be fine.

You might want to consider whether your current asset allocation is appropriate for you. If you have this much anxiety when the market drops, you shouldn't be taking as much risk. It is easy to be a risk taker when the market is up, but the true test of your risk tolerance is when the market is down.

Finally, you might want to seek some sort of therapy for your anxiety issues.
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boglechiq
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Re: buying a new van to live in, should i sell my daily driver?

Post by boglechiq »

humblecoder wrote: Wed Sep 21, 2022 9:00 am
My advice:

I said this upthread, but it may have gotten lost. Whether you buy the van or not is not going to change your financial situation one iota. Based upon your expenditures you have plenty of money to support you for the rest of your life, even if the market drops further.

If you do buy the van, don't finance it at 10%. Sell some of your portfolio to pay for it if you have to. Even after withdrawing $30K from your portfolio, you'll be fine.

You might want to consider whether your current asset allocation is appropriate for you. If you have this much anxiety when the market drops, you shouldn't be taking as much risk. It is easy to be a risk taker when the market is up, but the true test of your risk tolerance is when the market is down.

Finally, you might want to seek some sort of therapy for your anxiety issues.
what causes you to believe selling some of my portfolio wont affect me one iota? When I look at the facts, I feel like it would be a big deal? Selling at 52 week lows and investing into a depreciating asset. I guess it is also my living so i have to factor that into the equation.

Is it just my childhood traumas?
quantAndHold
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Re: buying a new van to live in, should i sell my daily driver?

Post by quantAndHold »

From a financial standpoint, you can easily afford any of your options, including paying cash for the van to skip the 10% interest, or skipping the van entirely and renting an apartment. You need a place to live, and there’s a cost to that. So this isn’t really a financial problem, per se. The main problem is that you seem to be really uncomfortable with the fact that the market is dropping and you don’t have any income coming in. My suggestion would be either a job (a proper one that pays enough for an apartment and a Tesla, not just flipping burgers), or counseling to work on your relationship with money.
Yes, I’m really that pedantic.
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galawdawg
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Re: buying a new van to live in, should i sell my daily driver?

Post by galawdawg »

boglechiq wrote: Wed Sep 21, 2022 9:48 am what causes you to believe selling some of my portfolio wont affect me one iota? When I look at the facts, I feel like it would be a big deal? Selling at 52 week lows and investing into a depreciating asset.
Perhaps that is one contributor to your anxiety over this purchase. You are thinking about this as an investment. It is a purchase, not an investment.

boglechiq wrote: Wed Sep 21, 2022 9:48 am I guess it is also my living so i have to factor that into the equation.
In my opinion, that is ONLY way you should think about this decision. You already have a Tesla for your "daily driver." This, according to your posts, will be your housing.

Working yourself into a frenzy over a purchase of this amount with your level of wealth is simply unhealthy. As I mentioned earlier, we can guide you on financial and investment wisdom but I discern that this type of advice is not particularly useful to you right now. As Jack Bogle remarked, you want to avoid making emotional decisions in investing and finance. Respectfully, it appears that emotions are currently the driving force. If thinking about this purchase is still causing you to "flip out" as it was yesterday then perhaps for your own well-being you should take a step away from the purchase and this thread until you are in a better state of mind. :happy

Best wishes...
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cchrissyy
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Re: buying a new van to live in, should i sell my daily driver?

Post by cchrissyy »

OP,

i would think of this as $60k prepayment of rent for 5 years at $1k per month.

mentally, that is overly conservative
- because you could get a lot more than 5 years out of it
- because the value at the end of year 5 is something higher than zero

you are taking money from stocks, which vary over time, to prepay your living cost for a period of years.
i think that's smart and provides security.

i picked $1k out of thin air because almost everybody pays at least that much either for rent or for their house's property tax. it's not building equity it just disappears in that month's cost of living. anyway it was an easy round number for my math and i assume if you rented an apartment or lived with a good roommate your monthly costs would be at least that much.

notice i am not comparing the proposition of prepaying 5 years rent in a nice van to the alternative of living for free in an abusive and stressful environment. that idea is a non-starter. you cannot and should not stay in a living situation that hurts you. that includes mental and emotional health. so don't use that free alternative as your comparison.

if you don't buy this van, you need another plan to get out of that house and not leave your tesla or other belongings behind. that plan will cost money too. and the good news is you have the money! you can provide many safe and healthy options for yourself. it is OK to spend to do so. we are all spending money to support our daily lives.
comfortable being all stock until age 40, now working towards 60-20-20 us-intl-bond
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Re: buying a new van to live in, should i sell my daily driver?

Post by LilyFleur »

Housing is a basic expense. If the van is your housing, it's a deal and a low-cost alternative to high rent costs in California or the unhappiness of living with someone you don't want to live with.
clip651
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Re: buying a new van to live in, should i sell my daily driver?

Post by clip651 »

OP - figure out where you want to live for the next 6 months or a year. Accept that you will need to pay for that place to live. (Even if you keep living with your mother, unless she is also a multimillionaire, to be fair to her you should probably pay her rent or something, unless you are so helpful living there that she is thrilled to have you since you make things so much better for her, etc. But it sounds like you hate living with your mother, so that doesn't look like a good option from what you have posted.)

Since you don't have a job, but you have plenty of wealth, paying for that place to live will need to come from your savings/portfolio.

If all of this still makes you uncomfortable financially, consider seeking employment to pay for your living expenses without needing to withdraw from your portfolio. But as others have pointed out, financially you don't need a job. You might be happier with one though, only you know if that's the case.

Whatever you decide to do for the next 6 months to a year, you can make a different decision after that. (e.g. try an apartment or the van life for a year, see if you like/love it, if not, try something else next year, etc).

If all of this still makes you uncomfortable in ways that aren't just financial, consider some form of counseling so that you can learn new coping skills to better accept your life's circumstances. As a wealthy person you have plenty of options before you.

Best wishes whatever you decide. And find some hobbies you love, so you have something to look forward to other than portfolios and purchases. Find something to do with your time that you enjoy, whether that's work or not.

cj
Last edited by clip651 on Wed Sep 21, 2022 11:46 am, edited 1 time in total.
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Re: buying a new van to live in, should i sell my daily driver?

Post by humblecoder »

boglechiq wrote: Wed Sep 21, 2022 9:48 am
humblecoder wrote: Wed Sep 21, 2022 9:00 am
My advice:

I said this upthread, but it may have gotten lost. Whether you buy the van or not is not going to change your financial situation one iota. Based upon your expenditures you have plenty of money to support you for the rest of your life, even if the market drops further.

If you do buy the van, don't finance it at 10%. Sell some of your portfolio to pay for it if you have to. Even after withdrawing $30K from your portfolio, you'll be fine.

You might want to consider whether your current asset allocation is appropriate for you. If you have this much anxiety when the market drops, you shouldn't be taking as much risk. It is easy to be a risk taker when the market is up, but the true test of your risk tolerance is when the market is down.

Finally, you might want to seek some sort of therapy for your anxiety issues.
what causes you to believe selling some of my portfolio wont affect me one iota? When I look at the facts, I feel like it would be a big deal? Selling at 52 week lows and investing into a depreciating asset. I guess it is also my living so i have to factor that into the equation.

Is it just my childhood traumas?
Short answer is math.

You mentioned that your annual expenses are around $50K. That means that with a portfolio of $2.8M, your safe withdrawal rate is 1.8%. At this withdrawal rate, there is virtually a 0% chance of running out of money based upon accepted models. Even if the market dropped by another 50% to $1.4M, you'd still have a withdrawal rate of 3.6%, which still has a very high probability of not running out of money.

If you are truly worried about market volatility, take all of your money and put it into "safer" assets that will at least grow with inflation. If you do this, your current nest egg will last you 56 years if you continue to take inflation adjusted $50K withdrawals per year. Again, this is just math.

Yes, it is not preferable to sell in a down market. But your nest egg appears to be plenty big.

EDIT: Meant to say "safer", not safe.
Last edited by humblecoder on Wed Sep 21, 2022 12:00 pm, edited 1 time in total.
clip651
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Re: buying a new van to live in, should i sell my daily driver?

Post by clip651 »

humblecoder wrote: Wed Sep 21, 2022 11:45 am
If you are truly worried about market volatility, take all of your money and put it into "safe" assets that will at least grow with inflation.
What are these mysterious safe assets that will keep up with inflation? I don't believe they exist, FWIW.
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Re: buying a new van to live in, should i sell my daily driver?

Post by tibbitts »

clip651 wrote: Wed Sep 21, 2022 11:47 am
humblecoder wrote: Wed Sep 21, 2022 11:45 am
If you are truly worried about market volatility, take all of your money and put it into "safe" assets that will at least grow with inflation.
What are these mysterious safe assets that will keep up with inflation? I don't believe they exist, FWIW.
No kidding, most of us would be using those investments if there were any (after tax, especially.)
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Re: buying a new van to live in, should i sell my daily driver?

Post by humblecoder »

clip651 wrote: Wed Sep 21, 2022 11:47 am
humblecoder wrote: Wed Sep 21, 2022 11:45 am
If you are truly worried about market volatility, take all of your money and put it into "safe" assets that will at least grow with inflation.
What are these mysterious safe assets that will keep up with inflation? I don't believe they exist, FWIW.
I meant to say "safer". My bad. Edited my post. Thanks for catching that and sorry for the confusion.
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The Way Ahead.

Post by dratkinson »

Image



Market recovery. The market will recover, so don't worry. Your $3M+ is down to $2M+, it should recover within 4yrs. Why? Most market corrections recover within 4yrs. So within 4yrs your investments will be again over $3M.


Large emergency fund. Many retirees report keeping 5yrs of living expenses in cash-like investments: savings, CDs, bonds,.... In your case, I'd suggest you follow their advice and have >5yrs of livings expenses in bonds. Why? You can find bond funds that pay more than savings, CDs.

Normally, you'd live off of your investment distributions during good times. But when the market corrects and distributions diminish, you'd sell some bonds to make up the difference. Why? Because... during a crash:
--Stocks can lose 50-90%. (This is what is worrying you now.)
--Bonds can lose 5-15%. (Don't sweat owning good bonds.)
--Stock/bond crashes are not typically coincidental.

Then after a crash and the market recovers, you'd sell stocks to refill your bonds.

Specifically, I'd suggest using a 50/50 split between
--VWLUX (Vanguard's LT national muni fund)
--VCITX (Vanguard's LT CA muni fund)

Why? Dividends are the major component of bond fund total return, and these two funds should return more after-tax income than most.

Why? You'll need to wag the TEY (taxable-equivalent yield) of the munis to compare to taxable bonds. And you'll need to compare the muni results to some baseline bond.

National muni TEY = SEC yield / (1 - fed tax bracket)
Single-state muni TEY = SEC yield / ( 1 - fed tax bracket - state tax bracket)

Since you report your income is ~$50K/yr, I assume you're in the 22% fed tax bracket and 8% CA tax bracket. Since VBTLX is the 3-fund portfolio's standard, we'll use it as our baseline for comparison.
--VBTLX (total bond market index fund) SEC yield* = 3.72%
--VMLUX (limited term national muni fund) SEC yield = 2.46%, 2.46 / (1 -.22) = 3.15%
--VWIUX (intermediate term national muni fund) SEC yield = 3.05%, 3.05 / (.78) = 3.91%
--VWLUX (long term national muni fund) SEC yield = 3.53%, 3.53 / (.78) = 4.53%
--VCADX (CA limited term muni fund) SEC yield = 2.87%, 2.87 / (1 -.22 -.08) = 4.1%
--VCITX (CA long term muni fund) SEC yield = 3.17%, 3.17 / (.7) = 4.53%

* See: https://investor.vanguard.com/investmen ... btlx#price
Overwrite "vbtlx" in website URL with other fund symbols to find their SEC yields.

Lather, rinse, repeat above if I've guessed wrong about your tax brackets.

The use of munis is recommended because:
--Dividends are tax-exempt, so do not add to your AGI, so prevent tax bracket creep.
--Some may return more after-tax income than taxable bonds.
--The use of a single-state muni protects some of your bond dividends from both fed+state taxation.
--The use of 100% single-state muni exposes you to single-state default risk, hence the recommendation to use 50/50 national/single-state munis.

Disclosure. I prefer to use munis (TEY) that should produce more after-tax income than VBTLX (SEC yield).

Many on the forum recommend using a 50/50 combination of VMLUX/VCITX, to give a pairing that is intermediate term duration (on the sweet spot of the bond risk/reward yield curve), with the majority of your dividends protected from CA tax. But your worry about income (which comes from bond dividends) leads me to recommend skewing toward the LT national/state pairing; but the pair is more risky* than VBTLX, which may cause you more worry. You'll have to pick your poison.

* Longer duration bonds are more sensitive to interest rate risk, so their NAV will decline more when fed raises interest rates. But! once rates stabilize, bonds get well (NAV recovers) based on their duration. Meaning you don't care about interest rate risk... if you are not selling bonds.



Safe Withdrawal Rate. From my reading, an SWR of <=3% can be considered to be a perpetual SWR. Meaning you'll never run out of money because your investments (over the long term) should grow faster then you're withdrawing to spend. So on ~$3M*, you can plan to spend ~$90K/yr. (* This was your baseline before the market correction... and the market should recover within ~4yrs.)

It is okay to overspend in some years---this year for example to buy the van you want. Why? Because you are under spending in most years.



Bottom line. The way ahead.

1. Treat* yourself to whatever you believe will give you the lifestyle you want.

* Buy the van (or whatever) you want**. Don't worry about spending money this year because you'll return to under spending next year. And the market will recover after that.

To be clear. No matter the cost, I suggest you buy a turnkey van, built as you want it, because your second-guessing yourself will be murder if you hand-build a van over many months. Since you like your VW Westy, suggest getting something that resembles it in initial capability, and then consider adding a few extra creature comforts so you'll recognize your new van as a step up from the Westy. In this way there should be less chance of buyer's remorse.

** Decide what you really... really... really... want. Don't flit from one idea/purchase this year, to another idea/purchase next year,... as this wastes both money and time, which will only frustrate you more and feed your uncertainty/nervousness. Do it. Do it right. Do it once.


2. Pay cash for the van (or whatever). Get the cash by selling investments with the least loss*. This will do three things:
--Avoid wasteful interest fees. (E.G.: A $90K, 6yr, 10% loan will cost you $30K in interest to repay the $120K loan total, at ~$1700/mo**.)
--Preserve as much invested principal as possible.
--Give you a small tax loss for the year to so you don't owe capital gains tax from selling investments.

* Sell by "specific Id" if possible. Why? This will allow you to dial-in your principal preservation and tax loss.

** Lather, rinse, repeat with your vehicle terms: https://www.saving.org/car-loans/90000


3. Assuming you have money in bond funds in taxable, then live on it (to make up distribution shortfalls) until the market recovers. After the market (and your stock principal) recovers, then convert some of your stock funds to >5yrs of living expenses in bond funds to give you a large emergency fund. Why? So you'll be ready for the next market correction; so you'll worry less next time.

If you don't currently have money in bonds in taxable, then you may need to make the hard decision whether or not to sell some stock funds now, to buy some bond funds to live on. Why? Remember, bonds are more stable than stocks. So converting some risky stocks to more stable bonds will slow further price erosion due to market fluctuations. But bonds are affected by interest rates, and no one knows what the fed will do next.

For absolute principal protection, then you need to consider insured (FDIC, NCUA) CDs.


4. Accounting for inflation and the market. Nobody knows nothing. So plan for the worst, and hope for the best.

If the market is at it's bottom and you convert some stocks to bonds now, you'll be kicking yourself for guessing wrong. And if this is not the market bottom and you don't convert now, you'll be kicking yourself for guessing wrong.

What to do? Split the difference. You could assume your investment dividends will be cut in half (over the next 5yrs), so you only need to make up half the difference. So sell enough stock funds now, to pay for 5 half-years of living expenses.
--Put the first half-year of living expenses in savings to pay for current livings expenses.
--Put the remaining 4 half-years in a 4yr CD ladder* (* A 4yr CD ladder is composed of 4 CDs, one matures each year for the next 4years). Why? CD principal is guaranteed, so you don't need to worry about market (stock NAV fluctuations), interest-rate (bond NAV fluctuations) ups/downs. As each CD matures, put it into savings to pay for the next year of living expenses.

But you do need to worry about inflation. Inflation will erode the purchasing power of your matured CDs. Inflation is currently ~8%*. Worst case: your 1yr CD (principal purchased today) needs to account for 8% inflation (increase in cost of living) when it matures next years. Your 4yr CD (principal purchased today) needs to account for 8% inflation (increase in cost of living) over 4ys.

* Example. Assuming 8% inflation, and the need to cover $1000 of living-expense shortfall each year, over the next 5yrs, your total stock sale today to move to insured principal, would be: $5866.
--Savings: $1000
--1yr CD: $1080
--2yr CD: $1166
--3yr CD: $1260
--4yr CD: $1360
--Total: $5866

Lather, rinse, repeat with your actual numbers.

Current US inflation: https://www.usinflationcalculator.com/i ... ion-rates/
Inflation calculator: https://www.calculator.net/inflation-calculator.html

Once you've set up your savings/CD-ladder, you don't need to worry about market/interest-rate/inflation ups/downs for the next 5yrs. Why? Because your investment distribution (assumed to be halved) shortfalls are covered by your insured savings/CD ladder.

Each year, put the matured CD into savings (to pay current living expenses), and buy (sell whatever is up: stocks/bonds) a new 4yr CD (accounting for inflation), and roll everything forward another year. This means for the next 5yrs (most market corrections recover within 4yrs), you don't need to worry about market volatility, interest-rate risk, or inflation. This should ease your mind so you worry less.

Some of your decisions will be correct, some will be wrong. Such is life. Nobody knows nothing. So plan for the worst, and hope for the best.



And remember to carry a towel. :D



Edit. Second thoughts. Better TEY examples based on your reported $50K income. Link to vehicle loan calculator. Accounting for inflation and the market.
Last edited by dratkinson on Fri Sep 30, 2022 9:42 pm, edited 4 times in total.
d.r.a., not dr.a. | I'm a novice investor; you are forewarned.
csm
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Re: buying a new van to live in, should i sell my daily driver?

Post by csm »

OP,

Not sure if you pulled the trigger on the Transit van, but it sounded like you were buying a base van to convert yourself to living space as opposed to an already-converted Class B van? You may wish to consider one of the pre-configured Class B camper vans. While more expensive than the base van, when you consider the systems and technology that go into these, many of those on the market are very well tested and tweaked to excellent living spaces.

If you are keen on a Ford Transit, look at the PleasureWay OnTour 2.0 or 2.2 for a quality van. It may cost a bit more than converting your own, but you’ll have a quite luxurious living space. You may be able to find a lightly used one if you keep an eye out because Class B vans sold like crazy during the pandemic, and many people will may have decided that van life, or camping, isn’t really for them now that other travel has re-opened.

If you maintain it well, it will be an excellent vehicle for years to come. I agree with the other posters who recommend you pay cash with some of your portfolio. You could easily use a Class B van as a daily driver - my husband and I have driven a Winnebago Travato as our daily driver for 4 years. The only challenge is if the only parking option is a parking garage, but otherwise, it easily fits in most parking spaces.

Best of luck to you and keep us posted.
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Re: buying a new van to live in, should i sell my daily driver?

Post by JBTX »

after the recent drop in the market I've been really stressed out.

which makes me anxious


which also freaks me out.


which is why I'm stressed out


This is in addition to the recent stock market drop which has me really stressed.

I'm stressed about everything

resort or something mindless just to keep the anxiety away.

i get anxiety when i rent a place

the market is down another 1% today. and my net worth is down another 23k.

I'm feeling extremely anxious about my financial situation

I'm continuing to second guess myself.

Is it just my childhood traumas?

Until you address these obvious non financial issues above, which is beyond the scope of this forum, you will continue to struggle with these decisions.

Once that has been addressed, then you have to come up with a financial plan and obtain some financial literacy, such that you can figure out what level of risk you can be comfortable with. If you can’t get to the point where you are comfortable with a 1% market drop then you should probably look at some sort of annuitized fixed payout.
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JoeRetire
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Re: buying a new van to live in, should i sell my daily driver?

Post by JoeRetire »

boglechiq wrote: Fri Sep 16, 2022 6:19 pmi don't really want to live at my mothers and thinking it might be better to be back in the van but i can't go back into the vintage van, it has to be the new Ford Transit van but after the recent drop in the market I've been really stressed out.

i would essentially be parking the Tesla and leaving 62k on the table. I don't have anywhere to charge the Tesla. I'm currently just going to superchargers or commuting to various chargers around the city where my mother lives, but again i don't really want to live with my mother. if i kept the Tesla , it would be for the luxury of having a nice daily driver when I'm in town,

Anybody have any advice on what to do or are seeing something I'm not?
Are you actually going to drive the van? Or just keep it parked next to the Tesla most of the time?
How often are you going to be "in town" such that you would actually use the Tesla?

Seems like a complete waste to me, to own a Tesla while living in a van. But your mileage may vary.
and also a bet on the Full Self Driving technology since I've already paid for it.
Seems like a foolish bet to me. IMHO, the chances that this particular car will have Full Self Driving at any point in the near future is zero. Whenever real full self driving arrives, some other car will have it.

But it's your money to bet.
Oh, noooooo! I'm so sorry, it's the moops! The correct answer is 'the moops'.
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