Hello all,

I hope all is well. I'm new to the forum and I would like some feedback. I have always admired porsche's quality, heritage and just everything about it. I'm interested in buying a brand new panamera GTS, hoping for the new model that will come out mid 2016 as a 2017 car. I have to say that while many people have issues with how the panamera looks, to me it is beautiful, especially in person.

The GTS, after all the addon options I want run to about 150k give or take. I want to buy it cash or at least put around 80-100k in cash and finance the rest.

I'm 24 years old, graduating this may as a pharmacist and with the current job offers I have, I know I can make at least 10k a month AFTER taxes with no issues, maybe even a bit more. All in all, I can make around 120k-140k after taxes as a pharmacist. Yes normal pharmacists take home 80-90k home after taxes but I have a better job offer, lets put it this way.

I'm also single, no kids nothing. I plan to move out as soon as I graduate and get my own place and hopefully get married in a few years but for now I'm free.

I can never see myself buying a very expensive car when I'm married and have kids, I would invest it properly for the kids future or whatever.

Sure, you may propose to get a house first but I plan to get a house when I get married so we can both decide on it, not me alone. And house can come any point, but buying a porsche now will be cool.

I have some student loans but I also plan to get them out of the way quick, I plan to work very hard first 2-3 years.

Your thoughts?

Thanks!!!

 

If I were single and had no kids I would get a 2-seater.

 

The time to buy expensive toys is after you've built up investments. Speaking as a guy who spent $170k cash on a couple of cars last year, I'm not against spending money on toys - but the money I spent was half what I made on investments that year.

The secret to building up that kind of passive income is to have your spending under control from the start. It's always possible to outspend your income, but if you make a point of staying well within your total income, your total income will steadily grow, because that's how investments work. They snowball, so that $1 saved today is $1 every year after 10 years.

Don't sweat the investment knowledge. There's nothing wrong with index funds, provided you have the temperament to wait out bad years. The main thing that kills investment returns is souring on stocks in general in down years, and selling at the bottom.

You said "I can never see myself buying a very expensive car when I'm married and have kids," but the thing is, with the figures you're talking about, it will be easy to have that kind of recreational income later if you're saving it now. I've been through the "I won't be able to do this later" reasoning in my early 20's, but the reality is, it turned out to be much easier to do expensive stuff in my 40's than it was then. You don't die when you're 30, and marriage and kids aren't the end either.

I don't know what your expenses are, but I saved half my income after taxes most of my working career. If that seems high, 25% should still be doable. Look at your living expenses, set aside $30k for savings, and the rest you can put toward a car.

Which won't buy you a Panamera GTS this coming year. And frankly, I wouldn't take out a loan or a lease. I'd get something boring now, and get a Cayman GTS when I had the cash after my savings goals were met.

My own take: I much, much prefer driving my wife's Cayman S over the my Panamera S e Hybrid. I have the Panamera because it hauls stuff while still being a performance car - but it's just not as fun as the smaller car.

 

I bought my 1st Porsche at 22 (that was a very long time ago) and it was used, I agree with Gus. As someone who has owned 40 Porsche's 4 Ferrari's 3 Maserati's and a Lamborghini, along with 425+ more cars, I can tell you this, a car will not make you cool (or whatever they refer to it as these days). These days (I am old now) I look back on all the money I spent on cars (and then even more to modify them and say what a moron I was. I rarely take out my flashy cars anymore I got tried of the attention they bring a long time ago. I have owned 11 homes in my life and I had three before I ever got married at 43 (which did not turn out that well for me). You already are starting out with debt (your student loans) my advise is not to add to it. You have plenty of time to do the things you want, think hard before you jump into something like a 150K car which will be worth half of what you paid for it in three years. Not what I would call a wise investment for someone in your position, and that would not be cool, at least in my definition of cool.

 

Definitely agree with the others. Since you still live at home you should be saving your cash for a larger down payment on your first home not an expensive car. There are many great 30-40k cars out there that would make you happy, both new or a few years old (used 911, M3, etc).

 

Purchase a house now.

 

The buy vs. rent decision is a lot more complex than the car-buying decision. Yes, rent doesn't turn into equity, but neither does the interest portion of a mortgage. When you're single and in your early 20's, you often don't need that much space. A one or two bedroom apartment should cost less in rent than the interest on a mortgage on a house.

There's also the problem that selling a house involves significant frictional costs. Moving out of a house after a couple of years can increase the ownership costs significantly. Markets can be either a boon or a bane - making a profit is nice, but if you want to move when the market is soft, that can cost you money as well.

I tend to look at houses as a quality-of-life thing. When you're used to living in a 1800-2000 square foot house, moving into a 1000 square foot apartment even temporarily is painful.

 

I've been thinking about the housing market.. I wanted you guys thoughts.. I live in the DC area and I feel the market is inflated. Even if you're 30 minutes outside of Washington DC for a decent single family house with some land and a good neighborhood your are going to have to spend close to 500k and up. I'm not sure the true value is there. At 500k you're spending at least 250k on location. The rest on land and raw materials. And in my opinion the location isn't even great. Am I thinking about this wrong?..

 

It's all relative. That sounds pretty inexpensive to people around San Francisco, considering that just the location cost of homes is approaching $1million and that's for just enough land to stick a house on.

 

Fortunately the interest portion is very low right now and it's still deductible. People who don't buy now and want to in a few years might kick themselves (assuming we don't have another major real estate meltdown.)

 

While interests rates are low right now, that reasoning only holds if you're going to buy a house now and stay there. If Kman were to buy a house now, but finds himself wanting to move in 2-3 years, either because of a change in employer or a change in life, he still ends up paying whatever the interest rates will be then, plus he's out 6% of the cost of the house for a realtor's fee.

I used to move a lot, particularly in my 20's and 30's, so "what if you move?" is a consideration I always take into account. As a programmer, the next lucrative job offer was almost always in another state. I have no idea if that's common for pharmacists.

It's different if you're expecting to stay in a house 10 years or so, but he's 24, so it's seems likely he'll move for one reason or another.

 

I agree.

 

Pay off student loan first and get a condo or house. IF the budget allows get your self a CPO used 911, Cayman S/R or Panamera so that you don't fork out a ransom out the gate.

As others have said, being 20's and already having a large student loan to deal with and plans (IF) buy a house, it wouldn't be a good idea to add on a NEW 100K+ vehicle which will drop by 20K in price the second your drive it off the lot.

 

Excellent point.. At the same time as you get closer to DC the home prices approach and surpass the million dollar mark.. Overall it is subjective.. By definition market price is set by what people are willing to pay..

 

Thanks. What's funny is seeing what you get in San Francisco for around $1.75 million and it's an over hundred year old, 1700 sq ft dilapidated Victorian in a crappy part of town. Then you watch a real estate show where people are looking at veritable plantations in the East for way less than that.