Transitioning from saver to spender; considering toy purchase

[Bruceski44]

Hi all,
I just got laid off a few months ago and have decided to FIRE. Our passive real estate income pays about 80% of our expenses and the rest will come from savings for 3 years, then a 2.5% SWR from my 401k (current expenses and current value of 401k, AA below).

We just passed the $2M net worth milestone, which really doesn't feel like enough here in SoCal. I also just had my 58th birthday and am in good health.

I'm considering spending about $20k on a sports car which will bump my auto insurance by $1400 per year and add other maintenance costs for tires, oil change, etc. I'll do most of the work myself. My main worry (what me, worry?) is that perhaps I should wait to buy the car. I have another vehicle and mainly drive around our city. No road trips planned, no driving events.

We have about 55% or our assets in real estate yielding about 8% cashflow and this should improve over time. The other 45% is 10% bonds, 60% DGI stocks, 15% index funds and 10% cash. The dividends exceed what's needed to fund my 2.5% SWR, so I don't expect to have to sell anything to fund the distributions.

FIRECalc says there's a 100% chance the money will outlast my 30 year retirement. Even in the worst case, the portfolio value will be larger then than it is now.

So will any of you experienced FIRErs speak some wisdom to me? Should I hold off on the car?

Thanks for sharing any thoughts.

 

[NW-Bound]

Your finance looks good, considering your rental income.

Your toy costs 1% of your net worth. So, I say go for it, even though I do not care about cars. I have spent more than 1% on what makes me happy, and did that many times.

Just don't do crazy stunts with that car. You will be fine.

 

[ejman]

You look to be in good shape, particularly since you don't mention SS as part of your future income streams.

As an aside, I've always enjoyed stick shift cars and a couple of years ago (am now 66) started developing a painful left knee. Come to find out that was from engaging the clutch when shifting. Long story short I had to sell the stick shift car. Enjoy the sports car now, who knows what the future holds.

 

[pb4uski]

+1 go for it.

 

[Bamaman]

Enjoy the fruits of your labor. You only live once.

I too went out and bought a convertible, and it's a joy on a beautiful spring and summer night.

 

[travelover]

You really need to ask Suze Orman. We don't have the authority to give you permission.

 

[DrRoy]

If Firecalc says you are 100% then that is good. The AA seems fine. I personally would not spend the money on a car, but I would spend that or more on travel so it's just a question of preference/priority. The only issue I have is that I question if the historical returns that Firecalc uses are safe for the future. I think that drivers of growth going forward (workforce, productivity, etc) are not going to be as strong as we have seen in the last several decades and so investment returns will be lower. Fortunately, you are only looking at a 2.5% WR so that helps too.

 

[calmloki]

Toy cars are good and fun:
https://www.facebook.com/bmwsuisseromande/videos/808951332585696/
Sometimes BMW toy cars lose their value quite quickly, so that may be a consideration.

 

[check6]

I don't have any issue with an inexpensive sports car but question why your insurance goes up by $1400.

 

[Hyperborea]

At $20K that's an older sports car. Depending on how old and what make it may mean a lot of work to keep it running. If it's a couple of year old Miata then there will be little work. If it's a much older Porsche of some kind then the amount of work and the cost of the repair parts will be much larger.

I once owned a 1987 Porsche 944 Turbo that was a blast to drive, track, and auto-x but I spent a lot of hours underneath that car too. My now 12 year Mazda RX-8 is far more reliable than that Porsche was at a similar age. Just be aware of what you are getting yourself into.

 

[Hermit]

SoCal? I advise going for it - only if it is a convertible!

 

[48Fire]

FIRECalc says there's a 100% chance the money will outlast my 30 year retirement. Even in the worst case, the portfolio value will be larger then than it is now.

So will any of you experienced FIRErs speak some wisdom to me? Should I hold off on the car?

Thanks for sharing any thoughts.

Buy the car if you want it. You can clearly afford it. It's hard to break the savings habit sometimes.

We just started building a swimming pool. Glad my wife didn't ask me to run Firecalc

 

[RetiredGypsy]

Depending on how So in SoCal, after you go grab an apple pie in Julian and run up 79 to play on the mountain backroads, there won't be any question whether or not the car was worth it.