i learn a lot from this thread.

 

This 1-5% percent rule is just so hard to read about. I have many responsible friends and family with exotics including myself who are not millionaires by any means. Even at 5% I would have to be worth more than 2 mil to sport a S550. This seems very uptight to me. Buy the car and enjoy it. I'm the one in the 430 with the big smile passing that grumpy guy in the prius hybrid (saving gas money) who is worth double/triple me. If your gonna sweat paying cash or financing the car than it's not worth it. But I would not take this % deal into consideration. Someone with 50k in bank and making 50k a year should be able to afford a car worth more than $500 to $2500 with ease.

I do believe that most in this country live way above thier means, buying 800k homes with 10k down and driving $1000/mth leases and making 30k/yr. We all know that this country is suffering from this lifestyle. But in know way is this 26 year old in this class. To be were you are at your age you know the right answer. Hope you get - yes it's worth it.

 

I'm not usually one to stick my nose here but couldn't help but click on the thread based on the title.

Take this for what it's worth, I am by no means attacking your post.

I have some friends in Australia that have purchased and developed on the north west side of the country. They all are unanimous that things are positioned for a very large collapse in the real estate market. This would be true for the entire country. The banking structure in Australia has the potential to get hit in a big way due to this as well.

As for net worth and toys.

5% is a common number. $5 million net worth means a $250,000 car.

Of course, this number becomes less important as you go up in net worth. If you're worth $100 million, you can afford $20 million in cars (20%) and it's not going to have an impact on your daily life.

20% on someone with a net worth of $1 million is another story.

I can't think of one car purchase that a friend, family member, or myself have made thinking there would be any financial gain. In fact, they've all expected to lose money on it and classify the purchase as entertainment.

Just like a trip, drug use, or hookers, it's entertainment and you should treat it the same way.

As for if it's right for you. It all comes down to what you want out of life.

If your goal is to amass a lot of money, don't bother with the purchase right now. If you're concerned about your ability to amass enough money to live the quality of life you desire, shy away from the purchase.

If you are able to live the way you want to and this purchase will essentially have no effect on that, then go for it.

Ironically, now that I'm able to afford these kinds of cars, the appeal for me has dropped drastically. I find I am more interested in making money and that is my fun. I don't drive garbage but I'm pretty frugal with my purchases.

Sometimes I wish I had the guts to start making the bigger purchases like many of the members on here but I'm always scared to because it's $200,000 I could invest somewhere and make more money.

Good luck with your purchase. Remember to work on the numbers first, figure out what you can afford, and then work from that. Otherwise you can get carried away

 

well said. I see the 200K figure being throw around alot. If money is question as is here, I am sure something in the 60 to 140k range will do. I never purchased a new car, just can't image losing even more than I have too on a car. never was the guy who needed the newest best model out. I always suggest being patient and having prices fall to my liking. I feel I got my 430 at a great buy with 6k miles. I will enjoy it and than unload when done or if cash is needed. when all said and done- the loss should be no greater than a mid grade lux car, but the menories and fun will last forever. I still can't believe I got a Ferrari!!

 

Regardless of whether the car costs $200K or $60k, you can always invest the money instead and both keep the money you have and earn more.
The question is all about when you let go of earning money and start to enjoy what you have (or had, since it is gone once you spend it). That is a personal decision everyone has to make and the right answer varies from one to another.

What is just downright foolish, however, are the guys (or, in fairness, maybe women are this stupid, too) making maybe $4000/mo take home who buy a Ferrari or Lambo or Maserati on 72 or even 84 payments of over $1000/month. They rationalize the numbers and claim they can "afford" the car, but in fact the car owns them -- making that payment, and finding money to care for the car, end up dominating every financial decison they make in the next many years. They are "underwater" on the financing from day one and can't get rid of the car once they decide they really don't want the expense. They will always be poor.

About a month ago I was sitting in the Ferrari in a parking lot, waiting for my wife to complete her shopping, and woman in her late 70s or early 80s --old enough to think I'm young anyway -- came up to me and asked, "Young man, what breed of car is that?" (Really - "breed.") I replied it was a Ferrari. She looked it over for a moment, nodded, and said, "That means you have a lot of money."
"No, Mam," I said," It means I had a lot of money." :-)

 

We are on this planet for a good time not a long time, you sound very business savvy and have a good head on your shoulders. Sell off a couple of the 24+ properties that may not be the best producers of income for you. Enjoy your life while you are young enough, soon there will be a wife if not already then possibly children and that will eat up a lot of your time, energy, resourses and you might at that point be glad you enjoyed the experience of Ferrari ownership and say youre done and part ways with her. (the car not the wife) :-) Its the old saying to have loved and lost is better that to have never loved at all. and love is Ferrari ownership!!!
Best of luck
Jonnyenglish