And yet how many people on this board bitch about the price of premium over regular gas ($3/tank!!), or are too broke for a simple mod, or spend well over 50% of their income on a BMW while living in a residence which they neither own or even pay rent (aka mom and dad pay)??? I'd hardly say that the majority of the people active on this board have real money.
I agree. But in response to the author of the article, how many people will invest the difference? Most people buy their cars on loan or lease, so they'd be sending maybe $300/mo to the investment over 36 mos. Still substantial, but it takes discipline.
I bought a 2000TL brand new when I graduated from college. Interest rates were about 6% at that point. I bought it, not leased it, so the payments were brutal. I wish I would have gone with something much cheaper at that point. Sure, it was nice to drive, but 8 years later...meh, who gives a shit?? I'd much rather have the money, and have driven a Maxima or something similar (Maxima was the other car I considered at the time).
So I agree, you never know when you'll die, but owning a particular brand of car is just submitting to marketing hype. So many more things I could have done. Now I build my budget with house and car coming in LAST! I budget for everything else, then with what's left over, I determine how much house I want / need and what kind of money I'm willing to sacrifice for cars. At 32, I'm finding when I look at it that way, for the car that I'm contemplating buying right now the Toyota (Sequoia) is much more appealing than the BMW (X5 4.8).
However, when you get to be 65, wouldn't you like to have some kind of lifestyle other than homeless???? You can't count on Social Security, and it doesn't pay enough to live on anyway, esp if you're accustomed to driving a BMW!
I see far too many people that would love to retire at 65, but will likely work until they die becuase they spent it all when they cashed the paycheck. I agree you need to live today, but it's a good idea to plan for tomorrow as well.
I'd say your reasoning is also a little on the shallow side. Please correct me here if I'm wrong, but your statement implies that you believe people think you're better off because you drive a BMW?
I agree that buying a house is also not a wise financial move. Most people don't understand that, and they buy as much as they can afford. Then they are house-poor, and miss out on other investments. The historical returns on your house, after inflation, interest, taxes, maintenance and repairs, BTW, is usually negative.
I'm getting ready to buy a new house, and the same scenario is holding true as when I bought my current house - the bank is willing to lend me a whole lot more money than I want to shoulder. I'm not willing to commit that much of my budget to housing, and miss other opportunities.
Steak instead of noodles, or food in general, is not a like for like comparison. you can change your food budget at a moments notice if you need to cut back on spending, or if you are having a party and want to make a nice dinner. Your house and car are a little less liquid, and it's much more difficult to reduce your spend on these.