Just wanted to do a quick poll, how high do you feel someone's salary should be before purchasing a new 2005/2006 BMW E46 M3?
That's silly. Some people may prioritize other things like serious investing, vacation homes, boat, traveling, or other expensive hobbies before their car choices. It doesn't mean that you have debt issues or that you worship money in the bank. Which is why this question is impossible to answer.Moderato said:If my wife and I both made over 100K a year and didn't have any kids to worry about I'd be driving something a *little* more expensive then the M3. You either have some serious debt or worship money in the bank if with 200K/year and no kids you can "justify" an M3.
What I said is not silly, and if you paid attention to the wording you would have to agree. If you make 200K+ per year and you have no kids, there is no way you would have to "justify" an M3, and that's a fact.BahnBaum said:That's silly. Some people may prioritize other things like serious investing, vacation homes, boat, traveling, or other expensive hobbies before their car choices. It doesn't mean that you have debt issues or that you worship money in the bank. Which is why this question is impossible to answer.
Alex
It certainly is if you add in the either having debt issues or worshipping money part. Edit it the way you did above and I agree with you.Moderato said:What I said is not silly, and if you paid attention to the wording you would have to agree. If you make 200K+ per year and you have no kids, there is no way you would have to "justify" an M3, and that's a fact.
Not if you live in L.A. and recently bought a house (within the last year).Moderato said:What I said is not silly, and if you paid attention to the wording you would have to agree. If you make 200K+ per year and you have no kids, there is no way you would have to "justify" an M3, and that's a fact.
The person making $200k a year could also just buy a cheaper house. Surely they exist?The HACK said:Not if you live in L.A. and recently bought a house (within the last year).
Median price for a house in Irvine is reacing $750,00. For someone making $200,000+ a year it'd be somewhat financially irresponsible to own an M3...The insurance and upkeep plus the monthly payment and mortgage would basically mean nearly 85% of your monthly take home goes to the car and the house. A little too close for comfort if you ask me.
Rest of the country its another matter.
in socal then you are buying a condo, maybe even a apartment conversion condoswchang said:The person making $200k a year could also just buy a cheaper house. Surely they exist?
In L.A.? The average house price is about $500K. The average house price in OC is about $750K.swchang said:The person making $200k a year could also just buy a cheaper house. Surely they exist?
I dunno, I guess I was figuring one could just buy what one can afford - house mortgage ~35% take home salary, car payment ~20% take home salary. :dunno:The HACK said:In L.A.? The average house price is about $500K. The average house price in OC is about $750K.
And if you're buying a cheap house so you can get an expensive car, your priority is AFU. House appreciates (or depreciate less), the car lose half its value the second you drive it off the lot.
Sure you can be financially irresponsible and buy whatever you want. That's why I ended up where I am now, at one time with over $120,000 worth of cars in the garage in a $210,000 house. Very stupid move on my part.
Well at least you could always be happy about the cars you had. Which cars did you have that added up to 120K?The HACK said:Sure you can be financially irresponsible and buy whatever you want. That's why I ended up where I am now, at one time with over $120,000 worth of cars in the garage in a $210,000 house. Very stupid move on my part.
yeah, but the important thing is the fact that now you have the phat house. why do you think we all come over to your place to work on our cars? :thumbup:The HACK said:Sure you can be financially irresponsible and buy whatever you want. That's why I ended up where I am now, at one time with over $120,000 worth of cars in the garage in a $210,000 house. Very stupid move on my part.
Well we ALL know why you come over. To gawk at my neighbor you perve.liuk3 said:yeah, but the important thing is the fact that now you have the phat house. why do you think we all come over to your place to work on our cars? :thumbup:
:doh:The HACK said:Well we ALL know why you come over. To gawk at my neighbor you perve.
True but you end up changing the collateral on that loan. I love when the latest financial *****s start pitching loans to people who can't afford them or try to encourage them to "consolidate their debt" into "one low monthly payment." They push people to take credit card debt, car loans, etc. and roll it into a home equity loan. Now, guess what, you've taken some debts that were previously unsecured and backed them up with your home so if you find yourself in trouble (medical emergency, etc.) and can't make your payment then you could lose your house. This is a somewhat unrealistic situation but highlights the potential for financial problems when people either overextend themselves or choose the wrong method for paying or financing purchases.Tumbler said:For those reasonable people who own a home and are paying off their M3 I would like to offer a financial tip. Home equity loans are going for ~5.5% right now (over 700 fico score and good credit). Do the home equity loan for the five years with your same payment and the interest you pay annually is tax deductible.
For those that have a home and think the payment is too much, but you're dying to have an M3...get a low rate home equity where the interest is still tax deductible and if you extend to 10 years your payment will be less than the 330 or other car you're currently paying for, but don't want. I don't recommend this unless you think at some point you can catch up and pay the loan down sooner or else the interest will eat you up even if it's tax deductible.
By the way, don't lease cars unless you can write it off. Unless you live in a state where there is no sales tax like Montana or Oregon you are paying the entire amount of sales tax on the MSRP. Most people think you're simply paying sales tax on the MSRP - residual, but that is not the case in most contracts.
I offer this up because if you really want an M3 or other $50k automobile there are ways to finance smart and then ways not to.
Or, if all your bills are paid, no debt except for a mortgage and you max out your 401(k) then look for a very low financing rate like I did. I have enough "money in the bank" for a few BMW's but I like having that money earn money for me. So I pay half in cash and finance the rest at a rate approximating inflation these days. Paying $45K in cash wasn't a smart move for me when that money earns in the 5-6% range and the cost of borrowing was lower than that.rwfisher said:If you can pay your bills, put money away for retirement, and still manage to save $$ for a car...
...save the money and pay cash when you get enough. You should be able to earn enough interest to pay for an option or two.
Even at rates of 1.9-2.9% financing, if you're not purchasing or leasing through a business, do you really think a 5-6% stocks return rate is worth it? You're dealing with capital gains taxes, fees for each stock transaction, and inflation. (I'm not challenging you, just questioning. I had originally thought low-interest finance rates were smarter, but now I'm not as sure.)jetstream23 said:Or, if all your bills are paid, no debt except for a mortgage and you max out your 401(k) then look for a very low financing rate like I did. I have enough "money in the bank" for a few BMW's but I like having the money earn money for me. So pay half in cash and finance the rest at a rate approximately inflation these days. Paying $45K in cash wasn't a smart move for me when that money earns in the 5-6% range and the cost of borrowing was lower than that.
Good questions but I'm getting over 2.5% tax free in an Arizona Municipal MM fund that has no Fed or State taxes. That doesn't include mutual funds and stocks that are performing somewhat better on the whole (some down, some up obviously) and several stocks that are sporting healthy dividends which are taxable at only 15% (i.e. MO, BAC).swchang said:Even at rates of 1.9-2.9% financing, if you're not purchasing or leasing through a business, do you really think a 5-6% stocks return rate is worth it? You're dealing with capital gains taxes, fees for each stock transaction, and inflation. (I'm not challenging you, just questioning. I had originally thought low-interest finance rates were smarter, but now I'm not as sure.)
why is that? Ive made well over 200k the past 3 years and still debate whether I should make such a purchase. Im facing a career change, and less income. I should be at around 150k yr, my house note is $1250 month, and im not sure if i can now afford a CPO 04 M3. I just dont like living month to month with a car note taking up a lot of my money.Moderato said:If my wife and I both made over 100K a year and didn't have any kids to worry about I'd be driving something a *little* more expensive then the M3. You either have some serious debt or worship money in the bank if with 200K/year and no kids you can "justify" an M3.
The HACK said:Not if you live in L.A. and recently bought a house (within the last year).
Median price for a house in Irvine is reacing $750,00. For someone making $200,000+ a year it'd be somewhat financially irresponsible to own an M3...The insurance and upkeep plus the monthly payment and mortgage would basically mean nearly 85% of your monthly take home goes to the car and the house. A little too close for comfort if you ask me.
Rest of the country its another matter.
Unless you have a drug habit you should be able swing your mortgage payment and have plenty left over for an M3 and easily pay your bills and still put money aside for the future. If you want to pay me a consulting fee I'll work out a budget for you.Ventoux said:why is that? Ive made well over 200k the past 3 years and still debate whether I should make such a purchase. Im facing a career change, and less income. I should be at around 150k yr, my house note is $1250 month, and im not sure if i can now afford a CPO 04 M3. I just dont like living month to month with a car note taking up a lot of my money.