Join Early Retirement Today
Reply
 
Thread Tools Display Modes
The need for Toys and the desire to FIRE
Old 06-09-2014, 08:17 AM   #1
Thinks s/he gets paid by the post
jIMOh's Avatar
 
Join Date: Apr 2007
Location: west bloomfield MI
Posts: 2,223
The need for Toys and the desire to FIRE

Or is it I need to FIRE and I desire to have toys?

I am currently running through the math on being able to afford an electric car (a Tesla).

If a $90,000 car could last "forever" (the motor has an infinite life according to sales pitch, the battery is less known), I am considering this to be more of an expense moderator (I drop $500-$750/mo on gas easily).

Any thoughts from the peanut gallery?
Thx
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
jIMOh is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-09-2014, 08:35 AM   #2
Thinks s/he gets paid by the post
kaudrey's Avatar
 
Join Date: Feb 2006
Location: Alexandria, Va
Posts: 1,053
Yes, you don't NEED toys. You WANT a toy.

How will buying a $90K car affect your ability to FIRE when you want? If it means FIRE six months, a year, two years later, are you OK with that?

Without knowing anything about your finances or what your goals are, and how close you are to reaching them, what "thoughts" can we give you?

I have a friend who has a Tesla and he loves it. But he owns his own company and has a much higher income than me!
__________________
Two roads diverged in a wood, and I - I took the one less travelled by...
kaudrey is offline   Reply With Quote
Old 06-09-2014, 08:41 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
MRG's Avatar
 
Join Date: Apr 2013
Posts: 11,078
Sounds like a nice toy. If your going to buy one realize it's a toy. What about sales tax (don't know where you are), personal property tax(same disclaimer)? Here that would eat up a lot of the savings. For me it wouldn't be worth delaying my date. But we're all different.
Best wishes,
MRG
MRG is offline   Reply With Quote
Old 06-09-2014, 09:03 AM   #4
Recycles dryer sheets
A Bird In Hand's Avatar
 
Join Date: May 2012
Posts: 137
Can you talk about the math you've run so far? Beyond the sales/property tax aspects already brought up, don't forget:

- insurance (ongoing, likely to be quite a bit more than a cheaper car).

- electricity. The price of electricity for charging the Tesla is probably going to be about 1/3 that of gas for an average sedan. Compared to a very fuel efficient sedan, the Tesla might only be a 50% savings in fuel cost. Compared to other electric or hybrids, there may be something approaching parity (or worse in some cases the Nissan leaf has a higher MPGe). Granted, if you're considering buying a $90k high performance car like the Tesla, you're probably not at all interested in those other cars. And who knows, maybe you can charge up for free at work or something?

- battery replacement. For many drivers this wouldn't be an issue, but you appear to do a huge amount of driving. I'm guessing 40k miles/year or more. What's the warranty on the battery? I would expect that your battery may need to be replaced in just a handful of years with that amount of driving.

In short, I think it's clear that the Tesla is an expensive toy that's not going to save you any money. Your..."expense moderation" will be more valuable if you currently drive a 10mpg SUV, but it will likely never make up for the initial outlay and increased recurring expenses. There's no doubt it's an awesome toy though!
A Bird In Hand is offline   Reply With Quote
Old 06-09-2014, 09:21 AM   #5
Full time employment: Posting here.
 
Join Date: Nov 2012
Location: Dogpatch
Posts: 561
Quote:
Originally Posted by jIMOh View Post
Or is it I need to FIRE and I desire to have toys?

I am currently running through the math on being able to afford an electric car (a Tesla).

If a $90,000 car could last "forever" (the motor has an infinite life according to sales pitch, the battery is less known), I am considering this to be more of an expense moderator (I drop $500-$750/mo on gas easily).

Any thoughts from the peanut gallery?
Thx

Yeah, about that sales pitch. Gas engines in today's cars can last 300,000 to 400,000 miles (at least in some Japanese models lol) . The rest of the car will be worn out by then- the body, interior, etc.
tfudtuckerpucker is online now   Reply With Quote
Old 06-09-2014, 09:24 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
athena53's Avatar
 
Join Date: May 2014
Posts: 7,326
One other factor I'd include is maintenance. Maybe it takes less maintenance than other cars, I don't know- but you need to find out who's equipped to do routine maintenance and what they'd charge for oil changes, tune-ups, etc.

And even if it lasts "forever", will you want to keep it that long? Some people are happy driving the same car for years (DH and I sure are), but will you want to unload it in 5 years for something newer? Resale value is going to depend a lot on how they perform over the long run and whether the company is still in business to provide spare parts, etc.

We all have our splurges- DH and I have spent more on travel than any "normal" person would consider prudent, but we've never regretted a cent of the money we spent exploring the world. You may decide that a Tesla is that important to you.
athena53 is offline   Reply With Quote
Old 06-09-2014, 09:35 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,746
What's your discount rate?

90,000 at 7% will fund a $525/month car payment forever.

I'll just say that I don't personally plan on spending $525/month on a car forever. Mark me down for a vote for "expensive toy".
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (8, 13, and 15).
FUEGO is offline   Reply With Quote
Old 06-09-2014, 09:36 AM   #8
Thinks s/he gets paid by the post
Rustic23's Avatar
 
Join Date: Dec 2005
Location: Lake Livingston, Tx
Posts: 4,203
I run out of the desire to own a car long before the car runs out of the ability to provide reliable transportation. i.e. I want the latest ________ (fill in the blanks) Therefore no car is worth $90,000 as the last car i will ever buy. As to savings on gas, I can't believe a Toyata or Honda Hybrid, or any other manufacturer, for $30-35 thousand would not be a more economical move. You can buy a lot of gas for $60,000.

So I see this as a desire for a toy. A VERY expensive toy. And, that's fine! It's your FIRE and you can get there anyway you want. That $100,000 for a new car is only $4,000 a year for the rest of your life at 4% safe withdrawal rate.
__________________
If it is after 5:00 when I post I reserve the right to disavow anything I posted.
Rustic23 is offline   Reply With Quote
Old 06-09-2014, 09:39 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 9,358
$90K is a pretty long payback period. If you are older than 12, you might not see a great return on investment just from an ROI point of view, even if Teslas do last a long time.

If you have enough money, sure go and buy one. It is all about trade offs. I am probably willing to spend more on travel than some other posters here and travel has no resale value at all.

Keep in mind the most popular make of cars for millionaires is a Ford. Many millionaires are millionaires because they invest their money instead of spending it on depreciating consumer goods.

From the Millionaire Next Door authors blog -

"86% of those who drive prestige makes of motor vehicles are not millionaires [having an investment portfolio of $1M or more-see Stop Acting Rich]. Also, I mention the median price paid for the most recent motor vehicle purchased by a millionaire was $31,367 [for decamillionaires-$41, 997]. It is understandable why so many people relate wealth with the price tag of a motor vehicle. In a study of more than 2,000 respondents, The Wall Street Journal found that 35% believed that in order to qualify as being rich a person must drive a car that costs $75,000 or more. If I applied this $75,000 threshold to the millionaires whom I surveyed, more than 90% would fail to qualify.

Rich or Drive Rich?

"The following question was asked in The Millionaire Next Door: What makes of cars are most popular with millionaires? Number one in market share (9.4%) was Ford. . . the most popular models include the F-150 pickup. . . about three in ten millionaire Ford drivers own F-150 pickups."

Ford Pickup: #1 Vehicle in Sales & Profits
daylatedollarshort is offline   Reply With Quote
Old 06-09-2014, 10:10 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 13,202
Quote:
Originally Posted by daylatedollarshort View Post
...
Keep in mind the most popular make of cars for millionaires is a Ford. Many millionaires are millionaires because they invest their money instead of spending it on depreciating consumer goods.

From the Millionaire Next Door authors blog -

"86% of those who drive prestige makes of motor vehicles are not millionaires [having an investment portfolio of $1M or more-see Stop Acting Rich]. Also, I mention the median price paid for the most recent motor vehicle purchased by a millionaire was $31,367 [for decamillionaires-$41, 997]. It is understandable why so many people relate wealth with the price tag of a motor vehicle. In a study of more than 2,000 respondents, The Wall Street Journal found that 35% believed that in order to qualify as being rich a person must drive a car that costs $75,000 or more. If I applied this $75,000 threshold to the millionaires whom I surveyed, more than 90% would fail to qualify.

Rich or Drive Rich?

"The following question was asked in The Millionaire Next Door: What makes of cars are most popular with millionaires? Number one in market share (9.4%) was Ford. . . the most popular models include the F-150 pickup. . . about three in ten millionaire Ford drivers own F-150 pickups."

Ford Pickup: #1 Vehicle in Sales & Profits
Ford has about a 15% market share in the US overall, so 9.4% among millionaires isn't really a push for Ford. The F-150 is Ford's best seller though I don't know if it's 30% of what Ford sells.
RunningBum is offline   Reply With Quote
Old 06-09-2014, 10:11 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 13,202
I would also echo the comments about where to get service in Ohio. How easy is it to find charging stations away from home too? I might consider one in California, but not yet elsewhere.
RunningBum is offline   Reply With Quote
Old 06-09-2014, 10:45 AM   #12
Thinks s/he gets paid by the post
38Chevy454's Avatar
 
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 4,354
As one that has a lot of vehicles, buying a new car that will depreciate is purely a "want to" choice. I have several older classic cars. These actually appreciate in value over time, so while they are my hobby and have expenses to keep them, I am getting enjoyment out of them while also recouping much of the costs when I (eventually) sell them.

If you can afford the cost, and the new car makes you happy, then you can decide to get it. Just be aware the costs of the decision. We can't always make decisions based purely on financial basis, there has to be some emotional component and in your case that is the part that must be weighted and choices made.
__________________
The problem isn't artificial intelligence, it's natural stupidity.

You can't spend yourself to prosperity.

Semi-Retired 7/1/16: working part-time (60%) for now [4/24/17 changed to 80%]
Retired Aug 2, 2017; age 53
38Chevy454 is offline   Reply With Quote
Old 06-09-2014, 10:56 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
Quote:
Originally Posted by RunningBum View Post
Ford has about a 15% market share in the US overall, so 9.4% among millionaires isn't really a push for Ford. The F-150 is Ford's best seller though I don't know if it's 30% of what Ford sells.
Also, the data is highly suspect. There are plenty multi-millionaires around me, but pick-ups are rarely seen. Yesterday I was walking home from Lake Washington. I saw several Ferraris, a Corvette, and a couple 911s, but the only pickups I saw had grass clippings, shovels, and rakes in the back. So maybe most Millionaires next door are yard men?

My Dad had this same misunderstanding that expensive cars were only owned by people deeply in debt. He just believed this because it made him feel better.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 06-09-2014, 11:07 AM   #14
Thinks s/he gets paid by the post
 
Join Date: Nov 2013
Location: Bay Area
Posts: 2,745
Quote:
Originally Posted by jIMOh View Post
Or is it I need to FIRE and I desire to have toys?

I am currently running through the math on being able to afford an electric car (a Tesla).

If a $90,000 car could last "forever" (the motor has an infinite life according to sales pitch, the battery is less known), I am considering this to be more of an expense moderator (I drop $500-$750/mo on gas easily).

Any thoughts from the peanut gallery?
Thx

I've run the math recently and opted not to buy a Tesla. I am doing OMY thingy to pad my RE fund. $90k is a significant set back and it will add 1/2 year to my RE date. Instead, I've opted for $33k car. YMMV.

Tesla looks really nice though. But it is a fad, a toy, a lifestyle statement, a status symbol. If you are into those things and can afford it, knock yourself out .

(PS - currently doing math on buying a 65" 4K UHD TV. Math/Logic is not adding up but the TV looks so cool.)
robnplunder is offline   Reply With Quote
Old 06-09-2014, 11:09 AM   #15
Recycles dryer sheets
A Bird In Hand's Avatar
 
Join Date: May 2012
Posts: 137
Quote:
Originally Posted by haha View Post
Also, the data is highly suspect. There are plenty multi-millionaires around me, but pick-ups are rarely seen. Yesterday I was walking home from Lake Washington. I saw several Ferraris, a Corvette, and a couple 911s, but the only pickups I saw had grass clippings, shovels, and rakes in the back.
I can't vouch for the statistics cited earlier in the thread, but I'll note two things:

1) The statistics stated that Ford has a market share of 9.4% among millionaires (not multimillionaires FYI), and that three in ten of those Fords are F-150's. So of millionaires (or perhaps their households?), about three in one hundred own a F-150. How many cars of millionaire households did you observe on the way home? How many of those households were multimillionaires?

2) The statistics don't mention multiple cars per millionaire. Most people I know -- including millionaires -- own more than one car. So just because you saw a Porche doesn't mean that the Porche's owner wasn't out driving his F-150 at that moment.
A Bird In Hand is offline   Reply With Quote
Old 06-09-2014, 11:30 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 35,712
Quote:
Originally Posted by jIMOh View Post
If a $90,000 car could last "forever" (the motor has an infinite life according to sales pitch, the battery is less known), I am considering this to be more of an expense moderator (I drop $500-$750/mo on gas easily).
If you are spending say $600/month on gas, paying $3.50/gal, and driving a car with 25mpg, that works out to 4,300 miles/month. That's a lot of driving!

In retirement, we do not drive much, and 2 out of our 3 cars are just parked. I had to plug in a battery maintainer for them. And then, when we are going on trip, an EV would not have enough range and I would need to rent an ordinary car if an EV is all I have.

It is often difficult to justify a more expensive vehicle based on fuel alone. For example, for my class C RV I debated a long time between a gas engine one and one with a diesel engine. But when I figure that even if I am going to drive it 100K miles, the difference between 10mpg and 15mpg is 3,333 gallons. The cost of the fuel is much less than the difference in price, and then a diesel engine requires more expensive fuel and costs more to maintain. So, in the end I am quite happy with the cheaper class C that I bought.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)

"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is offline   Reply With Quote
Old 06-09-2014, 11:35 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 14,328
I'd offer up that I thought that it would be fun to buy a hybrid in 2007, which I did. Like anything else, though, eventually I've gotten somewhat bored with it, in spite of all the gee whiz technology. It only cost me $25K.

How long do you think that it will be before "Wow you've got a Tesla!" turns into, " Oh, I see you've got one of the old Gen 1 Teslas. The new ones are so much better"?
travelover is offline   Reply With Quote
Old 06-09-2014, 11:46 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,677
Send a message via Skype™ to kcowan
We visited the Tesla dealer on Friday. It is a sweet ride. Very luxurious and does not compare to a $35k vehicle. More like a Mercedes/BMW. Great electronics. The screen is like a 17" LED turned sideways. The car is warranted for between 500k and 600k miles depending on driving pattern and then the battery needs replacing.

Charging stations will cover the states by 2015. But the key question is how do you drive? Our pattern in RE tends to be fewer longer trips than when we worked.

If you can justify an F150 as your utility vehicle, then the Tesla would be a nice replacement for the Porsche in the driveway...
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 06-09-2014, 11:49 AM   #19
Thinks s/he gets paid by the post
mpeirce's Avatar
 
Join Date: Feb 2012
Location: Northern Ohio
Posts: 3,182
Quote:
Originally Posted by RunningBum View Post
I would also echo the comments about where to get service in Ohio.
There are two Tesla service centers in Ohio right now (Columbus and Cinncy) and Cleveland is "coming soon". There are even a couple of supercharger stations along I-80/90. Future plans include I-70.

I looked at a Tesla too. Nice car, but although its giant touch screen was nice and had comfy seats, it was seriously lacking in advanced safety features like automatic lane keeping, collision avoidance and so on that the german cars offer.

It is a pretty car though. If you want to turn heads with a four door car, the Porsche Panamera does that too...
mpeirce is offline   Reply With Quote
Old 06-09-2014, 12:19 PM   #20
Thinks s/he gets paid by the post
Rustic23's Avatar
 
Join Date: Dec 2005
Location: Lake Livingston, Tx
Posts: 4,203
HaHa,
It could be where you live. From a chart on the interenet I calculate that there are about 450,000 millionaires in Texas, and 150,000 in Washington, and everyone in Texas has a pickup in there garage! Well it sure seems like it.

United States Millionaire Map - Business Insider
__________________
If it is after 5:00 when I post I reserve the right to disavow anything I posted.
Rustic23 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What do you desire? EvrClrx311 Young Dreamers 41 05-17-2013 10:26 PM
Do you have any toys from long ago? bbbamI Other topics 35 01-08-2012 05:16 AM
Pets and their toys... mh Other topics 1 09-13-2011 05:36 PM
Royboy65's Sequel: What drives the desire to planning retirement? royboy65 Young Dreamers 7 08-24-2009 01:52 PM

» Quick Links

 
All times are GMT -6. The time now is 03:24 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.