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Old 06-27-2010, 08:14 AM   #21
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I own 4 Bimmers. Fantastic autos-the driving experience is much superior to North American built cars. What model 328 or 335? Coupe/sedan/cab? My daughter has a 328Xi sedan I drove it last weekend-great little car. Warranty will last another year (I think) You should then consider buying an extended warranty. This will cost around $1,000 per year but these can be expensive cars to fix. You only live once. I couldn't afford the car I really wanted until I was in my 50's.
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Old 06-27-2010, 08:22 AM   #22
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Personally, I would suggest you skip the car. Get something inexpensive and reliable. The dollars you save now are extremely valuable down the road, and this car will cost you a lot more than 250 a month.
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Old 06-27-2010, 09:35 AM   #23
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The car I really want is one that starts when I turn the key.

Oh, and MUST have a/c...
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Old 06-27-2010, 10:07 AM   #24
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Get the car.

Then use your guilt to be sure you start saving for retirement.
+1

At 25 I did not know what retirement was. Alien concept.
As for the BMW, I liked them during my short station time Germany. Definitely wanted one when finally getting back to the states. Many many years later when returned for good, realized the joys of the Autobahn (no speed limits) did not exist here. Got a VW superbeetle. Retired @59.5 exactly.
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Old 06-27-2010, 01:24 PM   #25
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I'm getting side tracked. I have wanted to own a certain type of car for years now and I am now at the point in which between my trade in value and low interest loan, I can get it for about $250 per month. I have dreamed of owning one of these for years (did I mention that). It is used but in great condition (30k miles).

Obvious problem, that is $250/month not going toward FIRE. How do you balance the want in life with FIRE? Right now I'm having a hard time saying "no" to myself, so maybe I'm looking for a reality check here.
Errr... This consideration is tailored to you because of your age. I'm not too much older than you and I'm not going to point fingers at preference. I'm not a car guy but I have plenty of seemingly frivolous expenses that far exceed $250 a month.

One part of me want to say "You're only young once. Go for it.". The more practical side of me and the habits that got me to FIRE have to point out that if you pay $250 a month for 3 years, you get $9000. If you compound at just 4% for the 22 years after you save the $9000, you'll have $21329. If you keep earning that same net 4%, you'll have an extra cash flow of $853 a year. And you'll still be quite a few years younger than the average retiring person. Everyone can jumble up the numbers as they please.

I suppose the real questions are what do you want, when do you want it, and what are you willing to give up for it.
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Old 06-27-2010, 03:22 PM   #26
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Errr... This consideration is tailored to you because of your age. I'm not too much older than you and I'm not going to point fingers at preference. I'm not a car guy but I have plenty of seemingly frivolous expenses that far exceed $250 a month.

One part of me want to say "You're only young once. Go for it.". The more practical side of me and the habits that got me to FIRE have to point out that if you pay $250 a month for 3 years, you get $9000. If you compound at just 4% for the 22 years after you save the $9000, you'll have $21329. If you keep earning that same net 4%, you'll have an extra cash flow of $853 a year. And you'll still be quite a few years younger than the average retiring person. Everyone can jumble up the numbers as they please.

I suppose the real questions are what do you want, when do you want it, and what are you willing to give up for it.
The problem with your reasoning re the future value of current expenditures is that you would only spend the absolute minimum all your life. Think of how early you could retire! Your last sentence is very true but of limited use.
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Old 06-27-2010, 03:45 PM   #27
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BMW? Approved.

May mention that my first was an '83 533i, then have had as runners an '89 325i, a '91 318i, a '93 525iT, and now my new-to-me car, a 2000 528iT. Every one has been a different driving experience, replaced engines on two of them, and the 528iT purchased for $4250 will have about $6250 in it by the time it gets rear suspension work done by me, paint and body work done by a very reasonable independent, oil leaks cured, new shoes... It won't be a new car, but it will be a super cruiser. I could have spent 2-4 times as much, but this fits my desires really well and isn't a normal boring car that just runs and drives and gives 30mpg. BMW - more smiles per gallon.

For driving experience, the older the BMW, the greater the connection - my latest cars have been pandering to creature comforts.
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Old 06-27-2010, 03:47 PM   #28
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When I was a kid, my dream car was a little British sports car, a Triumph or Lotus or MG like my sister's BFs drove, except when they were under them fixing oil leaks, which was "every second weekend".

Then I forgot about it until two things happened: first, my Dad died (I was 39), secondly, I drove past the Mazda showroom and saw a limited edition MX5 (Miata).

Our kids were 11 and 9. Could we make it work? We found a way. I would drive them to school on my way to work in the minivan, then DW would drive in later in the Miata, swap the cars over at my office car park, drive them home, and I would get a big smile on the drive home.

That was 10 years ago last month. Kids are at college and we now live close enough that I can bike or bus to work. But the Miata is still what I drive every weekend. I can't tell you how glad I am that I didn't wait until I was too old to enjoy it. (I'm still not, but this way I've had 10 more years!)

That said, I didn't get that car until I could buy it for cash and not touch the emergency fund. And a Miata is very, very cheap to run. If I were the OP I'd be asking myself what I'll be doing with my "dream car" in 7 or 8 years when the Beemer starts to get old and you get hit with the cost of replacement parts. I intend to keep the Miata more or less until the wheels fall off, because if necessary I can afford to turn it into a 6-weekends-a-year runabout and get another car.
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Old 06-27-2010, 04:01 PM   #29
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The problem with your reasoning re the future value of current expenditures is that you would only spend the absolute minimum all your life. Think of how early you could retire! Your last sentence is very true but of limited use.
This is true if you land it on a dime. If you only spend 30K every year regardless of salary until you have banked $1MM and your portfolio nets 3% consistently and all other cash flows stop right away at that point, you are aboslutely correct.

But if you overshoot the goal, and / or have other income to supplement the base so that incoming streams eventually add up to more than you need to be happy then you are spending much more than some arbitrary "absolute minimum".

My apologies to you for the last statement. I didn't know generalizations that are "very true but of limited use" weren't welcome. I'm new here and will try to learn quick.
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Old 06-27-2010, 04:13 PM   #30
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LOOK>>>>> at your age all you want to make sure is that you are in a saving habit... I would say that is putting about between 10% to 20% of your salary.... any more and you are taking away current pleasure for something that might never happen...

You need balance in spending... when I was 30, I bought a Firebird Formula 350... I KNEW that it would require extra money to fix... (and it did)... but it was FUUNNNN... it was a second car for me... so even more expense... but I am happy to have done it... and have enough money now toward my retirement goal...

So don't only keep your eye on the FIRE goal... my wife's first husband died when he was 41... a lady that worked for me died when she was 44... both got cancer and died within 6 months... both were considered very healthy before they got the news... keep the balance even and you can enjoy life NOW and also enjoy life in the future...
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Old 06-27-2010, 04:31 PM   #31
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No. Buy a car you can pay cash for and retire at 45 instead of 59. Then as a 45 year old *XEER (extra early early retire), you'll be able to pay cash for your even newer BMW then. Don't take a loan out to pay for something that depreciates!

*- I claim XEER (extra early early retire) as my own, being one myself.
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Old 06-27-2010, 04:37 PM   #32
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LOOK>>>>> at your age all you want to make sure is that you are in a saving habit... I would say that is putting about between 10% to 20% of your salary.... any more and you are taking away current pleasure for something that might never happen...

You need balance in spending... when I was 30, I bought a Firebird Formula 350... I KNEW that it would require extra money to fix... (and it did)... but it was FUUNNNN... it was a second car for me... so even more expense... but I am happy to have done it... and have enough money now toward my retirement goal...

So don't only keep your eye on the FIRE goal... my wife's first husband died when he was 41... a lady that worked for me died when she was 44... both got cancer and died within 6 months... both were considered very healthy before they got the news... keep the balance even and you can enjoy life NOW and also enjoy life in the future...
+1
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Old 06-27-2010, 04:41 PM   #33
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OK, where does this "spend it now, have fun" mantra end? Where do YOU draw the line? After all, this is an Early Retirement forum.

If cost is more than 10% of monthly take home? 5%? 20%?

Or when monthly investment return is at least 1X the cost? 2X the cost?
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Old 06-27-2010, 04:44 PM   #34
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OK, where does this "spend it now, have fun" mantra end? Where do YOU draw the line?
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Old 06-27-2010, 07:49 PM   #35
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OK, where does this "spend it now, have fun" mantra end? Where do YOU draw the line? After all, this is an Early Retirement forum.

If cost is more than 10% of monthly take home? 5%? 20%?

Or when monthly investment return is at least 1X the cost? 2X the cost?

That is a good question... I would say it ends IF the purchase make you stay up at night... it also IMO depends on how long you are going to 'enjoy' it... I enjoyed my car purchase for over 10 years... (and guess what, it also helped keep my other car newer so I kept it 15)....

When looking at buying a car that is a splurge and one that is practical... you only have to look at the delta... so a decent Honda or Toyota costing $15K instead of a $25K BMW is only a $10K decision... (well, more if you factor in repairs... but heh....)...
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Old 06-28-2010, 08:37 AM   #36
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OK, where does this "spend it now, have fun" mantra end? Where do YOU draw the line? After all, this is an Early Retirement forum.

If cost is more than 10% of monthly take home? 5%? 20%?

Or when monthly investment return is at least 1X the cost? 2X the cost?
I think a number of posters are advocating balance. ie Not always one way or the other. In my opinion a balanced approach has a higher probablity of maximizing happiness over you lifetime.
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Old 06-28-2010, 10:48 AM   #37
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I cut a picture of a magazine of the car I wanted and put it on the fridge as a goal I wanted to achieve...years later I bought it. Was much cheaper buying a 10 year old car.
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Old 06-28-2010, 03:07 PM   #38
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The car I really want is one that starts when I turn the key.

Oh, and MUST have a/c...
Plus a stereo. Those are my only requirements.
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Old 06-28-2010, 03:35 PM   #39
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Bring
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Old 06-28-2010, 04:56 PM   #40
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With what? ....a smilie?
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