Do you think this is affordable?-Dave Ramsey response

[Andre1969]

I watched the video this morning, but was multi-tasking, so I might have missed a few things. They were talking an awful lot about real estate holdings and such...so was that ~$2M in total net worth (including real estate), or just in investable assets?

Anyway, according to this: Net Worth by Age Percentile Rank Calculator [USA] - Shnugi , a net worth of $2M puts you in the top 5% for the 18-100 age group, which is pretty broad reaching. Narrowing it down to the 60-70 bracket, it still puts you in the top 10%.

So, while $2M might not buy what it used to, if you've reached that level, you're still doing pretty well for yourself, and are far, far ahead of most people in this country. And yet, I'm sure many people buy far more expensive motorhomes, with much less of a net worth.

Like someone else said, if they were in their 30's, it might be a somewhat risky move, but probably still doable. But, in their mid-60's, go for it!

 

[NW-Bound]

I wouldn't do it , even if I had 2 million, but they earned it so if that's what they want to do, do it. I remember in the 80's when I was kid, they had motor homes for 500k and 600k . Sometimes even more. They were super high end. I believe if memory serves, this was at the Anaheim convention center. Must have been a lot of "I'm just looking" customers.

If the $150K RV is new and a class A, it is among the lower tier of gasoline models, not diesels. A quick look on RVTrader shows that the most expensive model is a Prevost Marathon at $2.2M asking. Top-of-the-line gasoline class A's run around $200K asking.

Then, switching the search criteria to "used", I found a 2007 Prevost with 60K miles and an asking price of $400K. For gasoline models, I saw several with less than 40K miles with an asking price of $70K. There's a 2008 model with only 7,500 miles. How sad is that?

If people like to spend money on their dream, it is only sad if it does not work for them and bring the happiness that they expected.

 

[Nemo2]

If people like to spend money on their dream, it is only sad if it does not work for them and bring the happiness that they expected.

With dreams, as with most everything, "Trust but verify".

 

[Sojourner]

No matter how you look at it, RV's and boats are luxury items. And a beginner RV'er doesn't need to start off spending $150K, as he would do better in a $75K unit to first see if the lifestyle meets his needs.

If I were in my mid 60s and felt a yearning to get into the RV lifestyle (and had a $2+ million NW), there's no doubt I'd be willing to drop some big bucks on a nice RV. Before blindly spending $150K, though, I'd check out all the less expensive options, including buying something "gently used". Seems like there would be a large, thriving market for used RVs, and you could save major $$$ by getting something 1-2 years used where the previous owner drove it only once or twice and decided it wasn't for him.

Personally, though, I doubt I would ever buy an RV. For the price of a $75K vehicle, I could take 15 very luxurious, multi-week trips overseas or go on 20+ such trips in the US. Even at 4 trips/year, that would take 4-5 years, and for me that seems like a much better value proposition.

 

[exnavynuke]

"Affordable" - sure.

If you can pay your bills, maintain your lifestyle relatively comfortable, and pay for a new "expense" at the same time then I'd say that "expense" is affordable. Whether that expense is recurring vacations, an RV, or theatre tickets and fancy shoes to wear to that show wouldn't impact that evaluation for me.

As they can likely afford their lifestyle and bills if they spend the money, then I'd say it's affordable unless information came up to suggest otherwise.

 

[W2R]

I think it's great, IF the caller knows his own heart enough to know that this is exactly what he wants. Sometimes people don't and just want to spend money.

Moving 3 miles across town from a perfectly good house to my "Dream Home" cost a lot relative to my usual expenses, but for me it was a great decision. Life changing, actually. Obviously I don't plan to do this every year.

 

[ERD50]

Haven't seen anything about him here for awhile. Ready for the controversy!

Recently someone called in and said they have $2 million in savings and her husband wanted to buy a $150K motor home/RV or something like that.

Our savings are similar plus a pension and later SS but I would be scared to death to buy something that expensive (that wasn't a house).

We have 10 year old SUV, 3 year old fun car and a 32 yr old jeep (original owner!)

He said sure, you can afford it, enjoy.

That's 7.5% of their savings.

Am I being too conservative or is he crazy? (like his 12% ROI)

Of course he makes a big deal about people being "millionaires." My thought is that they are forty-thousandaires not millionaires.

Any opinions?

While your math is correct, I don't think you you have applied the math in any way that is meaningful, and I also don't think we have enough info (maybe it's in the video, I won't take the time to watch).

Heck, I think it's just fine for them to spend even 75% of their savings on any darn thing that tickles their fancy if the remaining 25% is adequate to cover their expenses. I'm sure there are people on this forum who have comfortably retired with a $500,000 next egg (combo of expenses and pensions and SS).

Couple that in with the fact that the while the RV may depreciate fast, it won't go to zero in a few years (or would be covered by insurance if it did). So the 7.5% of savings is not all gone.

Relax. Enjoy life (within your means).

-ERD50

 

[ncbill]

One can always rent.

Just a few years ago locally I saw large RVs for rent for $150/day, which included insurance and "Good Sam" roadside assistance.

Anyone new to RVs should rent for several trips before spending the equivalent of a house on something that depreciates faster than any luxury vehicle while also requiring more frequent and more expensive repairs.

 

[RobLJ]

I'm thinking of replacing the Subaru Legacy with a 4 wheel drive pickup, in the short term to go up some more gnarly Forest Service Roads for hiking and longer term to pull a medium/light trailer at about 10-15% of the RV in the OP.
However if they've got the bucks and will use the RV, why not? (I'd rent first, though.)

 

[Helena]

.

A local financial planner calls retirement "your second childhood without parental supervision."

Unfortunately that means toys can be quite expensive and there is no one to tell you, NO !

 

[NW-Bound]

But, but, but you cannot take it with you into the afterlife. I maintain that if this guy turns out to be enjoying RV'ing and making good use of his $150K toy, what the problem with that? People spend $100K on a Tesla, and you cannot sleep in a Tesla for crying out loud.

When I was not even 50, I spent a heck of a lot more than $150K to buy my 2nd home in the high country of AZ. And I did not have $2M back then in investable assets like this guy does now (I have more than $2M now not counting the homes, so you do not have to worry about me, thank you).

And I have been putting more money into this 2nd home to maintain it. But I never regret it. I taught my son who was then in his teenage years to ride a dirtbike, and there were many weekends when we rode for many miles into the surrounding national forest to explore the trails. This kind of experience, I cannot have now if I delay the purchase of the 2nd home until now. In fact, I am too old now to do the things I did back then.

After the 2nd home, I got into RV'ing too, but in contrast with this guy, I could get the experience of traveling, boondocking, and camping with a smaller class C, which is my RV of choice even if money is no object.

Come on people, live a little. Life is short.

 

[OddGuy]

Look at it this way...

If their situation was the same - mid 60's, one working a few more years at $120k/yr, and a nest egg of $1,950,000, would you tell them they will be in trouble in retirement?

Because 2.1 million minus $150k is 1.95 mil.

 

[Badger]

Personally, though, I doubt I would ever buy an RV. For the price of a $75K vehicle, I could take 15 very luxurious, multi-week trips overseas or go on 20+ such trips in the US. Even at 4 trips/year, that would take 4-5 years, and for me that seems like a much better value proposition.

Back in the 70s I traveled and camped around the country and Canada in my converted VW bus. I did than for years and had a great time.

Then a few years prior to retirement my wife and I talked about getting a nice RV (around $150 - 175k) but came to the same conclusion. We could take the same money and buy a nice new car for traveling around the country, stay in hotels or cabins in the mountains and eat out with greater comfort, no monster vehicle to manhandle down the roads, no beds to make, and no meals to prepare or dishes to wash and not take the huge loss in RV depreciation after a few years when we could no longer physically handle the RV.

Cheers!

 

[Music Lover]

One can always rent.

Just a few years ago locally I saw large RVs for rent for $150/day, which included insurance and "Good Sam" roadside assistance.

Anyone new to RVs should rent for several trips before spending the equivalent of a house on something that depreciates faster than any luxury vehicle while also requiring more frequent and more expensive repairs.

Agree. If they have never owned an RV before, then renting one first would be the smart choice, regardless of how much money they have. They might find that the RV lifestyle is not for them, or that a smaller model is more appropriate, or that just renting a couple times a year is enough.

 

[Jeffman52]

But, but, but you cannot take it with you into the afterlife. I maintain that if this guy turns out to be enjoying RV'ing and making good use of his $150K toy, what the problem with that? People spend $100K on a Tesla, and you cannot sleep in a Tesla for crying out loud.



Come on people, live a little. Life is short.

Agree. I saw somewhere else on this board. No point going home with an idol in your pocket. Obvious Survivor analogy.

Whats the point of scrimping and saving only to feel guilty for enjoying some of it? All within reason of course. But at that age its not a bad thing to spend a few dollars.

 

[YVRRocketSurgery]

Didn't hear the call but how much of an opinion can you get on a short call?

Apart from initial financials, I'd still likely want to analyze how much a pain it is to maintain it and how much use I'm going to get out of it. Buying it is the easy part, dealing with issues around it are headaches I'd want to limit. If RV'ing is totally their thing, it'll be a good purchase if they fully utilize it. Personally, I generally can't see myself throwing so much capital at something because I can't see myself utilizing something to that extent. I think I'd rather rent. But no right or wrong answer based on the description of the situation IMO.

 

[kgtest]

lots of factors, how will he fund, Roth, IRA or cash?

And in terms of usage, is he actually sleeping in this RV every night with his wife? In that case he is providing housing and transportation for > 8% of his net worth...not too shabby, granted motor homes depreciate, homes sometimes appreciate.


But to the pt of richest man in the ground, maybe the guy had no heirs?