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Hello all, I'd like to discuss how one should situate himself financially before purchase a "Large" liability.
How much in relation to ones net worth And income should there sports car be? Is 20% of your monthly income appropriate to spend on your cars expenses. Or Is 50% of you capital reserves wise to be spent on a supercar?

If some "Joe" has no assets but has 8k a month to piss anyway, should he buy or a supercar?
If Some "Joe" Nets 50k annually but has 800k in the bank should he buy a supercar?
 

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I really have no idea how to answer those question. All I can say is I waited till I owned my own business, home, rentals and had no debt, then I bought my first exotic. That’s just me. I don’t like being owned by my toys, but rather the reverse.
 

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That’s such a hard question to answer. How consistent is the income? If you have 50k saved and make a nice income, why not? Depends if you have the life is short mentality or not. Ask 5 people and get 5 different answers.

my advice is start small. Buy an 80-90k gallardo which Wont lose much value at all and enjoy. It’s all about spending smart. Good luck
 

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Agree with the "ask 5 get 5 different answers"

My opinion. If it's a consistent income, and you can afford the monthly payments, insurance, maintenance, and the rest of your life, with still some room to spare for saving for rainy days/retirement... Then enjoy life and go for it! Knowing that you might be in a slighter bigger pinch than our man Russk, if things go belly up on you.

You seem young (I'm assuming). 50k/y sounds low for someone to own a Lambo, BUT to have amassed 800k in a bank, I guess something was done right at some point. In that case, go for Jr's advice and start small. You'll never regret a Gallardo as a starter exotic, and keeping a larger chunk of that 800k with you safe and sound!



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To many variables.
Including alimony and depreciation for resale LOL.
OP should just create a spreadsheet and test percentages and amounts to attain an answer.
Harley and a tent = 1%
Corvette and an apartment = 10%
Gallardo and a garage = 25%
Aventador and a racetrack = 50%
For example I would not desire to spend more than 1% of my annual income on a car.
Others may be happy spending 20%.
Again, too many variables.
Yet as mentioned above, $800K in the bank and $50K annual seems fine for a Gallardo noting "life is short".
But, maintenance, insurance DMV, fuel, tires, depreciation, modifications over x years will be a loss of capital (for a spreadsheet one could calculate a per mile cost).
How much loss of your $800K is acceptable?
An Aventador could be too expensive as life does has surprises that need capital.
End of my morning coffee two cent FWIW.
Good luck with your decision.
 

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Only you can answer that question. If you can comfortably afford it and all the expenses that come with it without changing your lifestyle then go for it.
 

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Car is a depreciating assets which means that some percentage of your income will go down the drain + some more for the maintenance. It's a money sink hole. Having said that, if you start to lose your sleep and it is affecting your work, by all means get one. The fun will be worth it to some people. Also, if your finance allows it with "good budgeting", then why not? No worries ;)
 

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Jr Mint, can we make one of these "finance" threads a sticky since they seem to pop up every month?

Also shouldn't this be posted in the "Dreamers" section and while you're at it can you move all of Fat Viking's "Which Color Chrome Wrap is the Most Phat?" there as well?

TIA.
 

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OP you banked $800K making $50K a year you must be doing something right. For anyone else with mortgage/rent/loans/utilities/groceries etc that's a next to impossible scenario unless the $800K came from Daddy's trust fund.

My rule of thumb is if you can't make the purchase in straight up cash, you shouldn't do it. Doesn't mean you can't finance at low interest but you should have the cash in hand to purchase it outright. There's maintenance/repairs/gas/insurance/tires and other consumables that are going to make a significant dent on your wallet. The more expensive cars are to buy, the more expensive they are to maintain generally speaking.

Like Russ, I buy my toys cash. "Own your toys, don't let your toys own you" is a mantra to live by.
 

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I get the whole own your toys and don't let your toys own you. But unless great access to that trust fund you mentioned, most can't do that until well established later in life. I get the feeling that's not OP (could be wrong). So it's more like... Live life to the fullest now while a young (I get that), knowing with 800 you won't sink at all with almost any Lambo purchase. Just understand its a depreciating asset plus plus plus.

So if you can kiss 100, 200, 400k goodbye and still know you're sitting on 700, 600 or 400 in the bank (still more than most with 50k/y jobs) then by all means. Be that guy. Worst case, **** hits the fan and you take say a 50% hit if needed to sell... but it's still better than having it evaporate at a casino or up your nose like some people with more money than brains.



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I can’t but think what I could do with that 800k to make more money so 10 years from now I’m sitting on easy street. I’m assuming that the OP is a young program developer and has plenty of time.
 

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Dollar cost average into an index 500 fund over 10 years and you can buy an SVJ cash wifh plenty to spare.

Everyone is different but I paid off my mortgage, maxed out my IRA and set up a Defined Benefit plan when I was in my 30's. A new Carrera S was perfectly fine af the time. Once I was debt free I bought my first Ferrari still in my 30's. If you look at an exotic as a sunk cost like a nice vacation, ownership is less stressful.
 

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Discussion Starter #13
Jr Mint, can we make one of these "finance" threads a sticky since they seem to pop up every month?

Also shouldn't this be posted in the "Dreamers" section and while you're at it can you move all of Fat Viking's "Which Color Chrome Wrap is the Most Phat?" there as well?

Thank you for the response, my apologies for the potential mis posted discussion; I was slightly hesitant on posting in the "Dreamers" thread as I wasn't looking for advice from "Dreamers" but more so from those with a better understanding of life presay then myself. I've been living by the belief that if you cannot afford to purchase a liability twice, then don't; I agree with your opinions on many different levels. Given how endless ones advice on this topic may be, I was just looking for some food for thought from some qualified & relatable individuals.

I will 100% be financing this car to the most of my ability, as I'm currently transitioning my cash reserves into a diverse asset portfolio, in which my multi families are boasting a cap rate and ROI much greater then the current interest rates; That I've been offered from my lenders. Its a no brainer to fiance speaking for myself given the current rates...

Thank you for your advice, it's much appreciated, at times a v12 temptation can overcome that of rationality!
Cheers
 

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I can’t but think what I could do with that 800k to make more money so 10 years from now I’m sitting on easy street. I’m assuming that the OP is a young program developer and has plenty of time.
Thanks for the input! I've found that in prior experiences with cars i've owned; It's a vastly more enjoyable experience when you don't have to lose sleep over its expenses... Despite attempting to remain as discreet as possible with my posts; I've forgotten that some may make the correlation with my username LOL :rolleyes:

I genuinely appreciate the advice!
Cheers
 

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Discussion Starter #15
I get the whole own your toys and don't let your toys own you. But unless great access to that trust fund you mentioned, most can't do that until well established later in life. I get the feeling that's not OP (could be wrong). So it's more like... Live life to the fullest now while a young (I get that), knowing with 800 you won't sink at all with almost any Lambo purchase. Just understand its a depreciating asset plus plus plus.

So if you can kiss 100, 200, 400k goodbye and still know you're sitting on 700, 600 or 400 in the bank (still more than most with 50k/y jobs) then by all means. Be that guy. Worst case, **** hits the fan and you take say a 50% hit if needed to sell... but it's still better than having it evaporate at a casino or up your nose like some people with more money than brains.



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Thanks for all the knowledge, I'm quite fond of my spreadsheets, I common practice the cost per/km ownership calculation. For that very reason I'm sticking to later year models until I can afford to play the "new" supercar depreciation game. I'm quite regretting choosing such a oblivious username as I didn't want any prenotions to skew opinions.

Nevertheless, thank you again for the input!
Wicked Superleggera from the 416 I see (y)
 

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Keep us posted, I always enjoy hearing about others adventures through life. You sound like a sharp young man, with a good attitude and I have no doubt you will have your dream car and a great future.
 
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Everyone is different but I paid off my mortgage, maxed out my IRA and set up a Defined Benefit plan when I was in my 30's...
I did the same but I raced cars instead of buying a Ferrari, and I was still able to retire when I was 50. Life is much simpler when you don't have debt.
 

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I’ll chime in, although I am relatively new here. Been an entrepreneur all my life, started my business as a sophomore in college. My wife and I have done all the right things, we have no debt. Own our home, and warehouse. I’m 39 wife 37, my dads completely different from me. He’s worked for the man all his life, very conservative. Would never by anything but a Toyota. My wife and I are completely different. We enjoy life, it’s precious and never know when it might come to an end.

No debt is a great feeling, but if you feel comfortable using some of your savings and or your monthly screw you money I say do it! I bought one against my wife’s belief, now she wants another one, lol.
 

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I think the big question is do you want to be rich or poor. Poor people spend money , rich people invest. If you invest the 800k to double your income then buying a n 80 or 100k car would be ok. The problem is that once you start earning a lot of money then you want to earn more. If for example you put 600k out in hard money realestate notes, you will earn about 10% or 60K per year. Some earn more and some less but that is a good base number. Since you are lending short term rehab money or new construction money, the capital is only tied up for 4 to 6 months at a time. I am with Russ and JR. Pay cash for toys and treat them as such. Buying a new or 200K LAmbo would be a poor investment decision for you. I believe that 1 to 5% of your net worth is all you should put in a supercar. That would limit you to 40K which is still 80% of your annual income. You need to focus on increasing your income . If you have to buy a car, buy an older Ferrari for 40K . They are loads of fun and will never depreciate. As you income increases, buy more car. My first exotic was a 308GT4 Ferrari. I paid cash. My net worth at the time was about 3 million so I am probably way more conservative than other people. I used to spend when I was younger but could never get my net worth to grow a lot. Now after years of investing I can spend anything I want and not worry about it. (No private jets or million dollar boats ) Buy a conservative exotic, invest your money in a high returning investment and build your net worth . Set goals so when for example your net worth hits 1.5 million you trade up the ferrari
 
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Thanks for all the knowledge

Wicked Superleggera from the 416 I see (y)
All good man!

And yes. Technically I live in the 905 but no one would know where the hell that is. So Toronto works well enough. You in the area?

Also, if you want, just ask Russk, Surfah and Lee to be your financial advisors. After reading this thread, I'm hiring all of them

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