Nervous about spending

[Chief322]

Hello I am 56 and have been retired for one year and love it. I have my eye on a sports car but after a life time of saving I am having a hard time coming to terms with spending money for a toy. The car is used and will cost $53,000.
My pension is $60,000 with a 3% cola
Savings is a little over a million.
Wife still working earning $85,000. She has her own pension and 403b plan
Debt consists of mortgage of 189,000 at 3.89% and $10,000 on a 2013 Cadillac that I will pay off in the next few months.
Since retirement I have taken quite a few road trips and I envision myself continuing in this sports car. I love the thrill of a performance vehicle on a twisty road. The conservative side of me says you don't need it. How have others handled spending their savings and any regrets. Thanks

 

[NW-Bound]

If you care that much about it, then just do it.

My son, just a couple of years out of college, rewarded himself with an Audi S4. My wife did not like it, but I said he could afford it. Maybe his next car will be a low-repair-cost car. Will see.

 

[Meadbh]

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.

 

[Ronstar]

I say get the car if your spending is less than your income by $10k a year

 

[broadway]

It isn't just the car, you also need insurance for it.

How about doing rentals of the car?

To me $53K is a lot of money to be spending on a car. The most expensive car I ever bought is my 2003 Honda Accord that has 200K+ miles on it now.

 

[NW-Bound]

The way I look at it is that if a guy really wants this car, and if he has no other expensive habits, why not do it while he's still young?

If the OP is a serial car buyer, then I agree that his stash is not enough for such indulgence. If this car satisfies him for a few years, then it is OK.

As for me, cars are just transportation. I look at them with indifferent eyes.

 

[Ready]

This reminds me of the "Can I afford it" segment on the Suze Orman show. I used to love watching that!

Without knowing your expenses, we don't really have a complete enough picture to reasonably answer your question. But as others have said, I would not be buying a $59K used sports car while I still had a mortgage and other debt. You are supposed to retire all of your debt before YOU retire.

So with that being said, I'm going to have you say "YOU ARE DENIED!!!"

Suze would be proud.

 

[FlaGator]

Timely question, as I will soon have another driver in the driver in the house and am sorting through options ranging from getting something used for the teen to buying something for me in that same price range and letting her drive the 7 year old Honda.

With HH income of $145K, pensions and $1 million to boot, it doesn't look excessive to me.

It is hard to part with with the money, even when one "can afford it"

 

[cooch96]

Sounds like you're passionate about it. I say go for it! What's the point of living if not to stir your passions. You are a millionaire with a high pension and an even higher spousal income. If your spouse is okay with the indulgence, I say indulge.

 

[Car-Guy]

I'm probably a bit bias when it comes to sports cars since it's one of my bigger vices so I'd say go for it. I'm sure I don't need to tell you but if your are buying a "used" sports car, check it out carefully. I've bought several used sports cars over the years and so far I've had really good luck but am really careful.

You only go around once.

 

[W2R]

This reminds me of the "Can I afford it" segment on the Suze Orman show. I used to love watching that!

Without knowing your expenses, we don't really have a complete enough picture to reasonably answer your question. But as others have said, I would not be buying a $59K used sports car while I still had a mortgage and other debt. You are supposed to retire all of your debt before YOU retire.

So with that being said, I'm going to have you say "YOU ARE DENIED!!!"

Suze would be proud.

I completely agree. YOU ARE DENIED!

I'd suggest that you pay off your mortgage and your other debt, and let your spouse join you in a happy, debt free retirement. Then think about the car, maybe.

 

[RobbieB]

Buy the sports car.

Suze Orman is denied.

 

[Ready]

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.

 

[street]

If it is the value of the car I would invest in it. You can always sell it and maybe make more then you paid. I think you can afford it.

 

[Car-Guy]

If it is the value of the car I would invest in it. You can always sell it and maybe make more then you paid. I think you can afford it.

Of course it depends on the car. I've been able to buy and sell a few collectables for more than I paid for them, but I've never been able to sell a regular driver (sports car) for more than I paid for it. Sometimes I only got half of my money back but that's after I've got plenty of enjoyment out of them. Priceless.

 

[NW-Bound]

Sounds like you're passionate about it. I say go for it! What's the point of living if not to stir your passions. You are a millionaire with a high pension and an even higher spousal income. If your spouse is okay with the indulgence, I say indulge.

+1

Buy the sports car.

Suze Orman is denied.

+1

What does the OP expect when he comes asking a bunch of tightwads here?

I am quite frugal myself, but have spent a lot of money on things that make me happy, including gift and charity. I just don't care for cars, but if someone is passionate about it, and skimps on something else, why should he deny himself? Things might change and in another year or so, what if the OP's health declines, and all this becomes a "could have, should have"?

If I were to die tomorrow, next week, next month, I would not be regretting anything, but then I don't really care for anything that much, or be passionate about anything right now.

 

[coveredbridge]

I say get the car if your spending is less than your income by $10k a year

+1

You work your entire life to get to this point. This is the reward for all those years of frugality.

 

[RobbieB]

Words of wisdom.

We all "blow the dough" differently, we all life different stuff.

My buddy NW likes XO cognac but never drinks it, just looks at it and keeps it onna shelf. Me, I hit BevMo regularly to replenish my stock. Not to mention Wagyu beef, Maine lobster, caviar and truffles. Oh I forgot the balsamic -

But NW has 2 houses and he likes it that way. One high and one low. Close together. Are you ever gonna go NW or are you more SW planted -

Doesn't matter. He likes houses and I like food. Other people like cars. I like motorcycles. That's the way it is.

If you ask for advice from people they will not tell you what you should do, they will tell you what they would do. You are the only one that knows what you should do.

 

[NW-Bound]

Darn, just get away from a thread for a minute, and you get bad-mouthed already.

Who says I don't drink my XO? I just do not drink it as fast as you do.

And I go to the NW all the time. Ever since the late 70's. I cannot recall how many times I have been to SF and Seattle. I just don't stay.

PS. Speaking of booze, I will be visiting the town of Cognac soon, and will see where they keep the stuff. It's like a pilgrimage. Already booked a hotel right in the little town, from where I can walk to all the booze showrooms.

 

[RobbieB]

Well, that's good to know. All I remember you talking about is looking at it and buying more cheap stuff.

Try a bottle of Camus XO, I'm done with mine and on my way to another. Standard XO pricing, about $160. Tastes like heaven, so smooth a child could drink it -

Oh and if you see it, get a bottle of Nolet gin. I should have been drinking that stuff for years now, but it was never at the store until late.

 

[427Vette]

The OP didn't ask whether he could afford to buy the car. He asked, How any of the others dealt with spending their savings or if there were any regrets.

I would not look at it as spending $53,000.00. I would look at it as an entertainment expense. Lets just say you buy the car and lose interest in a number of years and you are able to sell it for a decent price (you may even make a little) because it is a desirable car. You may only spend what adds up to a few thousand dollars a year. I am sure the people that golf, fish, take pictures, travel or whatever spend a couple thousand a year and they are fine with it. In other words if you were to come on here and ask if you should spend $2000.00 a year to golf you would get a lot of approval. It's all how you want to spend YOUR money. Your wife is still working with her own pension and it seems like your needs are met and the bills are paid If you are comfortable with reducing your portfolio for what could be temporary, do it. It is really no one else's business to tell you if they would do it or not.

By the way I can't think of worse place to bring up buying a sports car. Most of the members here are quite proud of their ability to cut dryer sheets and pinch a nickel. Maybe find the forum that pertains to the car you want to buy and present your question over there. I bet you get more approval.


Let us know if you make the purchase. Good luck with your decision!

 

[FlaGator]

Getting back to the OP's issue, which is spending your savings:

I appreciate the Ramsey/Orman approach, and it was very helpful for me in the accumulation phase.

Once you've "won the game", I think those same guidelines are less useful. The priority, IMO, is to manage your resources for the kind of life you want, over a reasonable life span. The idea that debt and expensive cars shouldn't be a part of that life is silly, IMO.

For some (like me) that will include spending money I things I didn't when I was working and life responsibilities were different - nicer house, newer cars, better food, travel, etc. Others will take a different approach.

As has been said, when you ask tightwads about an indulgent purchase, you'll get a lot of criticism.

Spend your money as you see fit, enjoy your life and don't feel guilty about enjoying the fruits of your labor and self-discipline.

 

[NW-Bound]

Well, that's good to know. All I remember you talking about is looking at it and buying more cheap stuff.

Try a bottle of Camus XO, I'm done with mine and on my way to another. Standard XO pricing, about $160. Tastes like heaven, so smooth a child could drink it -

Oh and if you see it, get a bottle of Nolet gin. I should have been drinking that stuff for years now, but it was never at the store until late.

Here's a photo I posted a while back. There's a bottle of Camus nearly empty in there (and there's an unopened box in the background). And there are other bottles half-finished. I like to rotate, and go back and forth between my bottles, so have a lot of half-finished bottles.

And as mentioned, that's only about 1/3 of the bottles of hard booze I have on hand. I have some at the 2nd home, but not nearly as much.

Same as the other threads where people talk about income being different than spending, I like to have a stash of booze, even if I do not drink them all soon. Over the holidays, my niece gave me an XO bottle of a brand I never had. I myself found another XO bottle I never had before, liked it enough and the price was good, so go get myself 3 more bottles to stock up.

Yes, I like to buy less expensive French XO cognac from lesser known brands to compare with the more common stuff. Sometimes I like it just as well, so why not?

 

[Souschef]

Buy the sports car.

Suze Orman is denied.

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.

 

[daylatedollarshort]

I would run the car purchase through a retirement calculator like the one at Fidelity on a conservative return setting and see what the results are. You can add in one time purchases in the expense fields. I have a fund set aside for one time home improvements of a similar magnitude and that is what I did, plus I also ran the extra home improvements through my own retirement spreadsheet. We plan to continue to live below our means in retirement otherwise, so a one time kind of big expense like that made very little difference in our long term retirement funding plan.