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Partner wants to buy a Super Car worth 150k

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  • I like nice cars.  $150k isn’t a supercar.  When college is funded (if?) I plan to get a Porsche GT3.  By then I’ll probably be nearing 60.  Maybe by then I’ll want something different.  But, I’d your financial house is in order, there’s no shame in buying something nice you like, whether it is a car, boat, vacation house, airplane, or a host of other expensive toys.  You can have anything but not everything, right?

    Comment


    • Not everyone should comment in every thread...especially when OP specifically requested we not discuss the Flintstone mobiles. OP's question is for those who have had the experience of paying for $150K supercars. Did not inquire about Chevy, Honda, $2K cars, car rentals and so forth. There are plenty of other threads about "value" vehicles. OP did not ask if supercar drivers are dumb, narcissistic to think this way and ultimately a roadblock to financial prosperity. Many lessons to be learned here.

      Comment






      • Not everyone should comment in every thread…especially when OP specifically requested we not discuss the Flintstone mobiles. OP’s question is for those who have had the experience of paying for $150K supercars. Did not inquire about Chevy, Honda, $2K cars, car rentals and so forth. There are plenty of other threads about “value” vehicles. OP did not ask if supercar drivers are dumb, narcissistic to think this way and ultimately a roadblock to financial prosperity. Many lessons to be learned here.
        Click to expand...


        You've also got to know your crowd.

        Comment


        • Hmmmm,
          My brother plans to borrow $150k to make a purchase.
          He has plenty invested in the stock market and could pay cash. Is that a wise move.

          Clickbait in the title. Egged on by OP in the Flintstones clarifying statement. NINE PAGES!
          Strong work I’d say. Traditional debt or invest question that traditionally turns into an evaluation of the purchase one way or another. No harm, no foul. Some pretty cool cars.

          Comment






          • Not everyone should comment in every thread…especially when OP specifically requested we not discuss the Flintstone mobiles. OP’s question is for those who have had the experience of paying for $150K supercars. Did not inquire about Chevy, Honda, $2K cars, car rentals and so forth. There are plenty of other threads about “value” vehicles. OP did not ask if supercar drivers are dumb, narcissistic to think this way and ultimately a roadblock to financial prosperity. Many lessons to be learned here.
            Click to expand...


            That's ok- FLP will comment on any thread he finds interesting. one of the nice things about this forum is that it is not moderated with a heavy hand, and we can contribute our perspectives and opinions. the WCI ethos (I believe) is making prudent financial decisions: buying 150K cars largely does not fall into that category (and offering a different perspective may be valuable to a reader).

             

            Comment


            • Tim and OP,

              One thing the significantly wealthy do is they leverage their assets to become even more wealthy, while enjoying the asset - even a depreciating asset.

              I purchased my cars with cash, but have refinanced them when prudent on several occasions with sub 2% 6-year loans, for me up to $220K at a time. That kind of money can sprout a serious business. I have used these funds to further grow my business and real estate. In turn, I partially use the associated windfall to pay off the car loan.

              Then this process can be repeated indefinitely. Those depreciating assets over the decades can earn you hundreds of thousands, if not potentially millions. You can't just think like a doctor or an attorney or a dentist or an accountant, it takes an entrepreneur to think out of the box.

              That is the only reason I have a current automobile loan obviously, with a $2M emergency fund and an auto loan interest rate lower than I get on the CD returns.

              This kind of leverage is one way (out of a plethora) the wealthy get wealthier with safe investments, and can help OP to leverage, over time, the final cost of supercar ownership while benefiting his business or diversifying into my favorite commercial real estate - for me, by doing this the car has paid for itself multiple times over. So for all the naysayers, my Ferrari has made me money, compared to their simple vehicle depreciation. In their stubbornness they can't figure this out due to entrenched preconceptions.

              Yes I could have invested the $170K and not bothered with my passion for a supercar, but maybe some in the "crowd" want to actually live life and not be told their decisions are dumb for narcissistic disagreement on what others demand they must value versus their own intrinsic values.

              Tim, taking all my $13M and putting it in the markets simply for long term appreciation is not wise in the grand scheme of life, even if I will ultimately wind up ahead financially. Your definition of wise is simply not mine. So yes, I consider my Ferrari to be wise and simply adding to my $12M in appreciating assets to give up the enjoyment very, very unwise actually. Yes, I could have been a miser and not have purchased the cars or the big house. Is that the life you would consider wise? To quote Bette Midler, "It's the soul afraid of dying that never learns to live." Am I to live my entire life afraid to spend $150K here because it's not "wise" financially? Would I look back at my life and say I lived it to the fullest? If you read my comments in this string, I recommended on one do it if they don't expect to be a decamillionaire and have noted ownership is not for everyone.

              I don't understand 95% of the advice coming from my 9 figure NW friends and neighbors until I research it in depth. It often conflicts with my understanding. I would never think of telling them their private jet is dumb, take a commercial flight. I gave up my preconceived notions a long time ago because I know my stubbornness and laziness to mimic success would be a major deterrent to achieving that success for myself. To each his own I guess. But some here have to give to each his own.

              OP did not ask if they should buy the car. Everyone should give OP the courtesy of answering the financing question posed. "Dumb" comments here are not a valuable perspective, rather a denial of our individuality.

              Comment






              • Tim and OP,

                One thing the significantly wealthy do is they leverage their assets to become even more wealthy, while enjoying the asset – even a depreciating asset.

                I purchased my cars with cash, but have refinanced them when prudent on several occasions with sub 2% 6-year loans, for me up to $220K at a time. That kind of money can sprout a serious business. I have used these funds to further grow my business and real estate. In turn, I partially use the associated windfall to pay off the car loan.

                Then this process can be repeated indefinitely. Those depreciating assets over the decades can earn you hundreds of thousands, if not potentially millions. You can’t just think like a doctor or an attorney or a dentist or an accountant, it takes an entrepreneur to think out of the box.

                That is the only reason I have a current automobile loan obviously, with a $2M emergency fund and an auto loan interest rate lower than I get on the CD returns.

                This kind of leverage is one way (out of a plethora) the wealthy get wealthier with safe investments, and can help OP to leverage, over time, the final cost of supercar ownership while benefiting his business or diversifying into my favorite commercial real estate – for me, by doing this the car has paid for itself multiple times over. So for all the naysayers, my Ferrari has made me money, compared to their simple vehicle depreciation. In their stubbornness they can’t figure this out due to entrenched preconceptions.

                Yes I could have invested the $170K and not bothered with my passion for a supercar, but maybe some in the “crowd” want to actually live life and not be told their decisions are dumb for narcissistic disagreement on what others demand they must value versus their own intrinsic values.

                Tim, taking all my $13M and putting it in the markets simply for long term appreciation is not wise in the grand scheme of life, even if I will ultimately wind up ahead financially. Your definition of wise is simply not mine. So yes, I consider my Ferrari to be wise and simply adding to my $12M in appreciating assets to give up the enjoyment very, very unwise actually. Yes, I could have been a miser and not have purchased the cars or the big house. Is that the life you would consider wise? To quote Bette Midler, “It’s the soul afraid of dying that never learns to live.” Am I to live my entire life afraid to spend $150K here because it’s not “wise” financially? Would I look back at my life and say I lived it to the fullest? If you read my comments in this string, I recommended on one do it if they don’t expect to be a decamillionaire and have noted ownership is not for everyone.

                I don’t understand 95% of the advice coming from my 9 figure NW friends and neighbors until I research it in depth. It often conflicts with my understanding. I would never think of telling them their private jet is dumb, take a commercial flight. I gave up my preconceived notions a long time ago because I know my stubbornness and laziness to mimic success would be a major deterrent to achieving that success for myself. To each his own I guess. But some here have to give to each his own.

                OP did not ask if they should buy the car. Everyone should give OP the courtesy of answering the financing question posed. “Dumb” comments here are not a valuable perspective, rather a denial of our individuality.
                Click to expand...


                THIS is the kind of information I was looking for!

                Comment


                • Borrowing money to purchase a (heavily) depreciating asset somehow leads to great wealth. We obviously are in the midst of a financial genius. LOL.

                  Comment


                  • I did not mention a car. Nor did I mention YOUR investments. Borrowing on one asset (secured) and investing in another increases risk. In financial analysis, it’s call VAR. Value at Risk. Changes in one investment impact the other. My point is that it is usual prudent not to cross borrow from one asset to invest in another. More people are hurt by leverage than helped (no data, just an opinion.

                    Leverage is rather simple. It can help or hurt you. Some extremely wealthy don’t bother with leverage.
                    No need to boast or take offense.
                    One can pay for an asset and keep stocks on margin, or finance an asset purchase. It makes zero difference except to the lender, what is the collateral put up?
                    Leverage is the concept, not the dang car. It increase the VAR due to the loan. You seem to prefer debt. Your choice. You recognize it and thus keep high liquidity.

                    Comment






                    • I did not mention a car. Nor did I mention YOUR investments. Borrowing on one asset (secured) and investing in another increases risk. In financial analysis, it’s call VAR. Value at Risk. Changes in one investment impact the other. My point is that it is usual prudent not to cross borrow from one asset to invest in another. More people are hurt by leverage than helped (no data, just an opinion.

                      Leverage is rather simple. It can help or hurt you. Some extremely wealthy don’t bother with leverage.
                      No need to boast or take offense.
                      One can pay for an asset and keep stocks on margin, or finance an asset purchase. It makes zero difference except to the lender, what is the collateral put up?
                      Leverage is the concept, not the dang car. It increase the VAR due to the loan. You seem to prefer debt. Your choice. You recognize it and thus keep high liquidity.
                      Click to expand...


                      Tim, it’s all smoke and mirrors. It was actually a fellow forum member who clued me in that it was a charade, and since then others have messaged me that it doesn’t add up.

                      the multimillion dollar commercial real estate practice

                      the investing in mutual funds that returns 30% a year x 10 years (that conveniently is not listed)

                      the multiple supercars (he snickered at my Honda Civic, but declined to post a picture of his “Ferrari”)

                      the rich friends and lavish lifestyle

                      and now the claims that great wealth awaits those who pursue strategies which make absolutely no financial sense.

                      I get it- anyone can claim anything on the internet, the only issue is this forum is supposed to cater to intelligent and coherent personal finance advice.

                      Comment


                      • OP, glad you appreciate the feedback.

                        So for over two decades now I have been

                        1- Transferring debt to 0% no transfer fee credit cards and paying them off within the 12-18 months

                        2- Leveraging untapped HELOCs as my emergency back up to earn income on my actual cash reserves

                        3- Refi home for cash out

                        4- Refi automobiles for the lowest possible borrowing rates

                        5- More than triple our early professional career income post-residency

                        6- Saving hundreds of thousands by couponing, comparison shopping, credit card cash back, Ebates, generic clothing, restraint, etc.

                        It has worked out every time. How hard is it to borrow at 0 and invest in a guaranteed CD at 3% or into early bulls (ie. 2009)? One has to be pretty unintelligent to lose there and make me look like FLP's genius. Obviously there has to be some calculated risk for the rewards one reaps, with the operative word being calculated. Have faith in your business and investment skills thru continuing research and refinement. Nothing wrong with being leveraged, everything wrong with being overleveraged. Healthy income a back up for leverage, not just the invested asset. Leverage at 0-3% good, above that not so much. Currently leveraged credit cards, car, residence. Expanding income, investment equity and emergency funds plenty to insure risk. No problem. Don't want my talents to be limited to my role as physician. What great things do you feel you are capable of?

                         

                        Comment


                        • EntrepreneurMD, is this really all just elaborate, wordy fiction you are doling out in your responses, or are you for real?

                          I can't fathom, for the life of me, why anyone would go to such great lengths on an anonymous forum? What possible benefit could there be to it?

                          Just seems strange, that's all. Although I admit, I do like reading the back and forth between FLP and yourself.

                          Back to the topic, I don't care for or want a supercar, but I did get a Tesla 3 recently, and couldn't be happier about the decision!

                          Comment


                          • Goggles, if I could do fiction this well, I'd be writing fiction books till I'm blue in the face. I can't fathom either.

                            Unfortunately, everything I've said is true. Yes, the Ferrari in this post is my actual car. Yes, my daily driver is an M6. Yes, I own a 3 provider practice and a pharmacy, 19K sq ft in commercial real estate, the big house, an oversized emergency fund (I'm very risk intolerant), the mutual funds referenced do exist and I have owned them for years. From my private messages and likes, it seems most already know this. Obviously to provide absolute proof I would have to reveal my identity to all. If it makes you feel better, at least one of the moderators here knows my identity.

                            Guess I now see why people in my position don't share their success. I feel a lot of what I contribute is above the heads of many here...but not all. It seems a lot more complicated at the decamillionaire level, probably what's throwing people off, but I'm sure there are others here who can relate or see my roadmap to get here (and beyond).

                            At least a lot of my comments get a whole lot of likes, like a dozen or so sometimes. I kind of enjoy the exchanges with FLP too, hope he does as well.

                            I am a bit eccentric, preferring sector funds to indexing and preferring to wait until the next big market correction to increase market allocation.

                            My brother got a black Tesla 3 last year. Very sharp and just a tad quieter than my Novitec exhaust!

                            Comment




                            • Guess I now see why people in my position don’t share their success. I feel a lot of what I contribute is above the heads of many here…but not all. It seems a lot more complicated at the decamillionaire level, probably what’s throwing people off, but I’m sure there are others here who can relate or see my roadmap to get here (and beyond).
                              Click to expand...


                              If all else fails, it's ALWAYS a good idea to insult the majority. Always.

                              Comment


                              • Repeat, the topic was about investing in the market using debt on another asset. It wasn’t about you. Thank you for understanding.

                                Comment

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