Nervous about spending

[NW-Bound]

My philosophy is that you only go around once. Last year I flew a Mig 15 in Santa Fe NM. The cost was high, but what else was I going to do with the money? It was an experience of a lifetime.

I think the key is to ration oneself. One indulgence like this $53K car is not bad, if it will keep the OP happy for some years. If he gets tired of it next year, sells at a big loss and buys another one, then it may matter.

Or it may not. If he loses $10K on a car each year, heck, many people here spend more than that on travel each year.

It all depends on other factors that we do not know about.

 

[Sunset]

OP, this all depends on your "other" fun hobbies or pursuits.

Besides your 2013 Cadillac that you STILL own $10K on (why... )
And your mortgage of $189K !! (big why).

How many motorcycles do you have and drive ?

Its all fine to blow some cash on a sports car, although notice you didn't scratch that itch long with the 2013 Cadillac.
It's better to blow the cash, when you are being super responsible about the other things, meaning be debt free !!

 

[Scuba]

One can be responsible without being debt free. DH and I choose to keep a mortgage and a HELOC. The mortgage is 3.35% 30 yr fixed and the HELOC just went up to 3.74%. We could pay both off with about 12% of our assets, but choose not to as our investment portfolio typically returns substantially more than 3.5%. I realize some people don't like debt. Others like using OPM (other people's money) as long as the costs and risk of failure are in line with what one can live with. YMMV

By the way, OP, I would think about buying the car for 2 weeks and if you still really want it, go for it! I agree that the annual amortized cost should be considered part of your entertainment budget.

 

[427Vette]

Maybe it would help to put your portfolio into another perspective. You mentioned that you had around a million dollar portfolio with your $60,000 pension. You also say that your wife has her own pension. Lets just assume that her pension isn't quite as good as yours and she gets $30,000 a year. We have no idea what your wife's 403b looks like or what other properties/valuables that you may own. Taking what we do know with a little speculation you have $90,000 a year income. Using the common around here 3% safe withdrawal rate those of us without a pension would need a 3 million dollar portfolio to equal that. If you take your current one million dollar portfolio and combine it with the three million dollar value from above you are basically sitting on the equivalent of a 4,000,000 portfolio. Of your 4 mil portfolio 5% is leveraged by roughly 200k of debt and you only want to spend 1.325% of your portfolio to buy a car.

I know you didn't ask for permission to buy a car or if you could afford it but everyone has told you what they would do if they were you. It certainly looks affordable for you if you wish to do so. Everyone's situation is different.

 

[Fedup]

I say go for it. Life is too short. As long as you are reasonable with your spending and enjoy it.

 

[Elbata]

I drive a 98 Honda. Super reliable. I call it my $100,000 car.

Why? Because instead of upgrading cars every few years, I save $100K in 10 years.

 

[daylatedollarshort]

One can be responsible without being debt free. DH and I choose to keep a mortgage and a HELOC. The mortgage is 3.35% 30 yr fixed and the HELOC just went up to 3.74%. We could pay both off with about 12% of our assets, but choose not to as our investment portfolio typically returns substantially more than 3.5%. I realize some people don't like debt. Others like using OPM (other people's money) as long as the costs and risk of failure are in line with what one can live with. YMMV

By the way, OP, I would think about buying the car for 2 weeks and if you still really want it, go for it! I agree that the annual amortized cost should be considered part of your entertainment budget.

We also have a low interest rate mortgage we will likely never pay off early. I can't really see being bothered by debt when the circumstances are financially favorable. I'd gladly take a loan for $100,000,000,000 at zero percent interest if anyone ever offered that to me and invest the money in Treasuries.

 

[Dash man]

Eighteen months ago I spent about $50K on a new car. Paid cash. No debt whatsoever. Net worth is more than double what was calculated above by deadshort52 for you. As long as you have debt I'd side with the DENIED crowd. Won't you also have to pay tax on the assets you sell to buy the car? You have a perfectly good 2013 vehicle. Why sell it? Pay it off and start saving to pay cash for your next car.

 

[Chief322]

Thanks to everyone for their input some very good suggestions. my wife who is 49 wants to work 5 more years and she is in a job where she only works 180 days a years so she isn't in the retirement mind set. I am going to pay off the cadillac. I bought it a little over a year ago when I knew I would be giving up the company car. I financed it because the interest rate was so low and was waiting for access to my retirement funds. The house is temporary so couldn't see paying it off with the short time we plan on staying here. When wife retires we will use her 403b plan to pay cash for a home. I spent a career seeing lives cut short and had 2 life threatening conditions over the past 8 years and had always focused on the destination and at times forgot to enjoy the journey. My health is good but as we all know tomorrow isn't a sure thing. I am going to give it a couple weeks to think things through. There are only 2 of these cars within the state but can always look nationwide is I cant live without it. By the way I keep cars for years and this one would be a long term collectible .Thanks again.

 

[bradaz2488]

I understand the OP situation. I have owned several sport cars and once you catch the bug it hard to cure. In fact, I just picked up my new (2009) baby last Sunday. I spent $33K (cash+trade-in) w/ 17K miles so it is basically a new car. It stickered for $70K so I feel pretty good about the purchase. It is obvious you can afford it, but it comes down to your priorities. For me, I would be a little uncomfortable spending that much and still have debt. My #1 priority was having no debt before I ER'ed. Also, I made sure that this purchase did not derail my ER plan using multiple RE Tools. Another consideration is if the car is European and not under warranty it will be extremely expensive to have any maintenance & repairs done. I try to do all my own repairs because I also consider this a hobby. All cars are money pits, but European sports cars are at a whole different level. So be prepared for those costs. So if the numbers work w/ no impact to your ER plan, GO FOR IT!!! You only live once...

 

[2017ish]

One can be responsible without being debt free. DH and I choose to keep a mortgage and a HELOC. The mortgage is 3.35% 30 yr fixed and the HELOC just went up to 3.74%. ....

Yep. We refinanced in the fall to a 15 year fixed @ 2.75 and just opened a HELOC for 200K (going to be 1.xx% below Prime when we get out of teaser period). Those transactions were to prepare for retirement. Could have paid the house off and gone without HELOC, but this gives us more cashflow headroom before 59.5.

 

[IMATERP]

You probably don't want to hear this, but....My NW is several times what yours is, and my only debts are mortgages on rental properties. I would not be spending $53,000 on a second vehicle, particularly if I already had a car loan (bad debt). Heck, I'm having difficulty spending money on new patio furniture. I might feel differently if I had a pension, but I think my priority would be to get that Caddy paid off.

I say have your wife buy the car for you. She is still working...

All kidding aside, my wife just bought our Patio furniture last week. I actually paid for enclosing and tiling our patio and she offered to purchase the Patio furniture. We will be putting otgether the Swivel chair and loveseat this weekend. My chaise lounge is already up and in use.

Michael

 

[NW-Bound]

... I spent a career seeing lives cut short and had 2 life threatening conditions over the past 8 years and had always focused on the destination and at times forgot to enjoy the journey. My health is good but as we all know tomorrow isn't a sure thing...

Ugh! I myself had a scary health problem a few years ago. Now that is behind me, ironically I simply have no bucket list. I realize that just to be living and in decent physical condition is good enough. Everything else is secondary.

I still enjoy travel and other simpler pleasures, but if my financial condition deteriorates and I cannot have them, no biggie either.

 

[Big_Hitter]

depends, what kind of car?

 

[Fedup]

Some of you made me jealous, I have a 3.5% 30-year mortgage and I thought I have it made. Yesterday, they sent me new coupons for payment and it shows I've made over $50k in dent to the mortgage in the last few years. But I think that same amount I invested, probably would have worth a lot more. But I take it, no complaint here.

 

[RunningBum]

Mortgage debt is no big deal, just the usual 50/50 choice of pay it off or not. Some car loans also come at a super low interest rate too, and the OP said this was the case, right? I don't see where debt has to be totally gone before enjoying some finer things. I guess the OP did ask, so anyone is entitled to give their opinion, but you sure don't have to listen to them either. Especially anyone quoting Suze Orman!

Years ago, I really wanted the then-new, now discontinued Honda Roadster. I decided when I hit a threshold of wealth I'd buy it. During the dotcom boom it didn't take much longer to hit it, but I just couldn't pull the trigger on a $30K+ toy. Plus from some of the reviews, it didn't quite sound like the toy I wanted. I went for a $14K used (about a year old) Miata instead, and loved it. Almost 18 years later I still have it and love driving it. With upkeep and insurance, it's never been a financial sound move, but spread out over so many years, and taking a few miles off my main driver, it's cost me very little. I've never regretted it.

Not sure what my message is. If you're sure that's what you want, go for it. But there might be a half-priced alternative that is 90% (or more) of the fun. I'd just try to make sure it's not your mid-life crisis car that in 2 years you'll wonder why you ever thought it was a good idea.

 

[NW-Bound]

...Not sure what my message is. If you're sure that's what you want, go for it. But there might be a half-priced alternative that is 90% (or more) of the fun. I'd just try to make sure it's not your mid-life crisis car that in 2 years you'll wonder why you ever thought it was a good idea.

I often wanted something, but once I got it, it did not leave up to expectations. Then, I got stuck with it. Now, should I get something else?

Nowadays, I desire few things. Whatever it is, I keep thinking of the hassle that comes with it. Too much negative thinking? Maybe. So, I keep telling myself that it would not matter, and I do not need it. Seems to work so far.

But if the OP thinks it enhances his life, then $53K is not that steep. Did he say he would trade in the 2013 Caddie or not? That would make it less expensive.

 

[Luck_Club]

I spent a career seeing lives cut short and had 2 life threatening conditions over the past 8 years and had always focused on the destination and at times forgot to enjoy the journey. My health is good but as we all know tomorrow isn't a sure thing. I am going to give it a couple weeks to think things through. There are only 2 of these cars within the state but can always look nationwide is I cant live without it. By the way I keep cars for years and this one would be a long term collectible .Thanks again.

Health issues change the dynamic. Only you can say if you can afford the hobby. If you can go for it, especially if you have begun measuring the number of quality years left. Unfortunately not all of us can be going strong at 80, and some of us see 70 as our expiration date.

 

[1-31-18]

I might have answered differently if the OP was debt free. But when you still have $200K in debt and you're already retired, buying a second car just for fun is just plain irresponsible. Sorry.

+5

My NW is many times OP's. I have zero debt. I'm still w*rking but will retire in 10 months. My DW has a job that puts her in the top 1 percent, as mine does. No children on the payroll. We will sell DW's car next week because we need one car at most -- mine, for her to drive to her office. (I take the bus.) The car we will keep is a 100,000-mile 10-year-old Cadillac. Can't imagine spending as much as $40K for a car (again), ever. Might buy a Tesla 3 in a couple years, upon selling the Cadillac, but only because they will be so cheap and efficient (and will last forever). My idea of a "sports car" is the used bike I bought for $100 last August.

 

[427Vette]

+5

My NW is many times OP's. I have zero debt. I'm still w*rking but will retire in 10 months. My DW has a job that puts her in the top 1 percent, as mine does. No children on the payroll. We will sell DW's car next week because we need one car at most -- mine, for her to drive to her office. (I take the bus.) The car we will keep is a 100,000-mile 10-year-old Cadillac. Can't imagine spending as much as $40K for a car (again), ever. Might buy a Tesla 3 in a couple years, upon selling the Cadillac, but only because they will be so cheap and efficient (and will last forever). My idea of a "sports car" is the used bike I bought for $100 last August.

How do you know hat the original posters net worth is?

 

[1-31-18]

How do you know hat the original posters net worth is?

OP stated that his savings are a little more than $1 million. Also mentioned a 60K pension and his wife's earned income.

 

[Souschef]

We are not nervous about spending for a number of reasons. First and foremost, NO DEBT
Between SS and pensions we get about 70 K a year. We have scaled way back on our travel, and are done traveling outside the US.
We LBYM, and are slightly frugal, but not tight.

 

[daylatedollarshort]

The OP didn't mention a lot of his key figures, like expenses and house value. He could have a $10M house, annual expenses of $50K, his wife could have a $100K pension and both might get max Social Security. Without a complete financial picture it would be hard to tell if the sports car would be affordable or not.

 

[427Vette]

OP stated that his savings are a little more than $1 million. Also mentioned a 60K pension and his wife's earned income.

This limited information still may not represent his net worth. Like his net worth would matter any way. We don't know his wife's pension amount, 403b balance, maybe she has her own 2 million dollar portfolio, maybe he owns two vacation homes and several apartment buildings and a killer GI Joe collection. We don't know.


OP could you please come back and list all of your assets and account balances? Please also list all of your properties, cash under the mattress, jewelry, Santa bear collection etc. so everyone who insist on critiquing your net worth and comparing it to their own will have accurate information?

It would help if you would list your spending habits as well. Please include how much you spend or waste on sailing, golf, photography, flying, travel, ridiculously expensive booze and meals out and anything else you can think of. It makes it easier for everyone to relate. If you don't do any of that stuff you might get the blessing to move forward with the car purchase.

Since very few people have answered your question I will take a stab at it. I am not retired yet so it might not mean much to you. Whenever I am about to spend a large sum of money I go through what I refer to as a wallet attack. I panic a little then I go though all kinds of calculations to make myself feel better. I usually sleep on it then think about it for a week or two. If I still feel like its a good idea I move forward. I have made hundreds of deals on equipment, real-estate, cars, trucks, motorcycles, etc. and so far I have never regretted anything.

Lets say you make the deal on the car and things go completely south in a year and you are forced to sell it. If you buy it right and it is a desirable car you will be able to sell it almost immediately if you lower the price enough. If you buy it for 53k and you have to sell it for 43k to move it quickly will the 10k really affect you? I am sure people here waste that much on travel annually and it doesn't seem to bother them like you buying a car does.

 

[daylatedollarshort]

Lets say you make the deal on the car and things go completely south in a year and you forced to sell it. If you buy it right and it is a desirable car you will be able to sell it almost immediately if you lower the price enough. If you buy it for 53k and you have to sell it for 43k to move it quickly will the 10k really affect you? I am sure people here waste that much on travel annually and it doesn't seem to bother them like you buying a car does.

I don't get that part either. Expensive travel doesn't get deemed as wasteful here usually but cars often are deemed frivolous purchases, yet cars have resale value. A car kept for ten years could have a very frugal cost per hour of enjoyment.