Everyone deserves a nice car. If you've been saving and diligently for years, then a nice car you should get!
After analyzing the safest cars on the road and researching the best mid-life crisis cars to buy, I've finally come to a decision on what to get next. For almost three years, I've been driving a Honda Fit to weave my way around Bay Area traffic. The $235/month business lease is almost over, and it's time to move on. I'm turning 40 this June, and gosh darn it, I think I deserve to drive something nicer!
Given I've spent my whole life being frugal, it's been extremely hard to spend more than $20,000 on a car. It just feels dumb when my car will just sit in the garage for 23 hours a day on average. Further, cheap ride sharing options are everywhere. What used to cost $25 to go downtown via taxi from the western side of San Francisco now costs only $6 through Lyft line!
To help overcome my frugality, I asked three folks with nice vehicles to share their perspective. For those who are also suffering from frugality disease due to an intense desire to never have to work for anybody again, I think you'll find this post to be incredibly insightful.
How To Feel Good Spending Lots Of Money
Let's say you want to spend lots of money on a nice car. But you don't want to feel guilty. Here are some examples of how to do so.
1) Henrique, 26, $8,000 net worth, $48,000 salary, drives a 2016 $72,000 BMW M4
Hey Sam! Cars are more than just going from point A to point B for me. It's a lifestyle brother! Whenever I pull up to the club in my pearl white M4 with black tint I feel woke! The ladies turn their heads to see who's driving because they all want to talk to me once I'm inside. The guys ogle even more because I got the freshest rims and the slickest aftermarket lights.
When I could only afford a beat up Toyota Corolla life was hella boring. Now I feel like a confident man. When you have confidence, everything gets better. I feel like a million bucks driving my M4 for only $985/month. That's a great deal to me!
2) Lacy, 29, $150,000 net worth, $130,000 salary, drives a $81,000 2017 Porsche Boxster S 718
I just love convertibles. It's sunshine all the time in California so why not? Before coming to Newport Beach, I worked in dreary Washington D.C. for six years and took the subway everywhere. Hated it! I don't know why anybody would willing stay on the East Coast if they knew how awesome it is out west. For those six years, I patiently saved my pennies. When the new Boxster S 718 came out, I just had to have it. It's a dream car that handles better than the 991, for less!
I'm determined to live my 30s the way I want. Not only did I leave my old job for a new one with better pay and benefits, I also left a guy that I thought was the one. Turns out he was a scumbag. I work hard at my asset management job. I max out my 401k. My parents only live a 1.5-hour drive away so I'm saving money on flights. I see no problem living it up a little.
3) Sanjay, 45, $3,000,000 net worth, $600,000 salary, drives a $199,000 Mercedes Benz S600 Maybach
Sam, I fully admit I'm in full on mid-life crisis mode! My hair is thinning, my stomach is growing, and my wife made me get a vasectomy before we divorced! I hate her. But, I love our kids. But, I still hate her. Is that weird?
When you get to my age, you start wondering what's it all for? I've been in the business for over 20 years now as a Group Vice President. I'm a multi-millionaire, even after my divorce.
Thus, I should be able to buy whatever the hell I want! I have good friends who've passed away because of cancer before their 50th birthday. And I know all about your views on Stealth Wealth, but dude, that's what blackout tinted windows are for.
Oh, and one more thing. When I turn on the ambient lighting in the Maybach, it's game over! No woman can resist. There's no better family car for a 44-year-old executive than what I'm rolling in now.
Time To Live It Up!
It's helpful to listen to other people's reasons for why they spent so much on a depreciating asset. Perhaps it's because I've been trained so long to only invest in potentially appreciating assets that spending a lot of money on a car just feels so wrong.
But I plan to start a family so it's all about safety first, second, and third. The key for any middle-aged family man is to find that one vehicle that combines safety, fun, looks, and performance all in one. Given I live in sunny San Francisco, I've obviously got to have a convertible. But I can't get no dinky two-seater because I've got to get one large enough for the kids!
OK folks, are you ready to judge?!
I've decided to put down a $25,000 deposit for the 2018 Mercedes G650 Maybach arriving this fall! Not only is it a tank, it also has a convertible section in the back to soak up the rays.
Now that global warming is over, I plan to go up to my place in Lake Tahoe all the time now. We've got a record 600 inches of snowfall in Squaw Valley this year! So sick.
The funny thing about the G650 Maybach is that I actually owned the G500 version of it way back in 2002 when I was 24. It was one of my largest financial mistakes since I sold it a year later for a ~$16,000 loss because it was too tall to fit in the condo garage I wanted to buy! The body hasn't changed since it first began production in 1979.
I'm kind of embarrassed to admit the purchase price of the G650, but here goes nothing. This limited edition vehicle, which can certainly become a collector's item that appreciates in value one day, will cost me $520,000.
I know some of you are now unsubscribing because that's just a ridiculous sum of money to spend on a vehicle. But hear me out on why I think I deserve this vehicle besides the fact that it's safe and good for the mountains.
Why I Deserve A Nice Car!
- I purposefully went to William & Mary, a public university that cost $2,800 a year in tuition instead of attending a private university that cost $25,000+ a year in tuition at the time. That was a $100,000+ savings.
- I didn't bother my parents for money after I graduated from college, nor did I move in with them like so many do right now. See: How To Get Your Parents To Buy You Everything As An Adult Child
- I've religiously saved 50% or more of my after-tax income for 18 years in a row. In comparison, the average American only saves 5% a year. Here's how much savings you should have by age.
- I'm no longer going to buy another property in Honolulu or San Francisco due to additional maintenance headaches and property taxes. Instead, I plan to continue paying down my mortgages after paying off one rental mortgage in 2015. It feels so good to have less debt and a simpler life.
- From 2005 – 2012 I drove a used Land Rover I bought for $8,000. From 2012 – now, my business has only had to pay $165/month after deduction for my Honda Fit. This means that for the past 12 years I've driven a much cheaper vehicle than I can afford. All I wanted to do was invest in the bull market!
- I successfully negotiated a severance package that may or may not be equal to more than the value of the G650 Maybach. If I had quit, I would have got zilch. The severance feels like free money that should be spent however I wish. There's something to be said for proper planning and negotiating.
- A $60,000 private equity investment I made in 2007 is finally making a profit after the company was sold earlier this year. It's not a big windfall as I'll share with you in a future post. But it's certainly more than the $0 I thought I was going to get since it's been so long!
- A Financial Samurai post went aggressively viral, bringing me a respectable five-figure revenue windfall in one week as a result. How many people can say they were a “Twitter Moment” for three days in a row? That's Big Time Blogger (BTB) status. My English teacher would be so proud!
- I'll be paying over $50,000 in income taxes on top of over $50,000 in property taxes for 2016 as an early retiree. It kinda makes me ill seeing the amount spelled out like that, but I feel proud to help contribute to the greater good of this country.
- More than 12 people have already privately written in saying that some post I wrote in the past has helped improve their finances for the better. Making a difference in 12 people's lives was one of my goals for the entire year. At the end of the day, helping others while providing some entertainment is what blogging is all about.
So there you have it. If you want to still judge me for my purchase, so be it. But I feel that after all this saving, investing, planning, and writing, I deserve to finally drive a luxury vehicle.
The main thing I kept on going back to is whether I could live with myself if my family got injured in a car accident because I wasn't willing to pony up for a larger, more expensive vehicle. The answer was always no.
Money is meant to be spent, otherwise, what's the point of working so hard? Now to find me a tinted window shop to keep up the stealth!
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