The 1/10th Rule For Car Buying

[Model Citizen]

Originally Posted by trevorovert

All of this is moot.

Car = hobby, for all of us.

People get car manufacturer tattoos.


This isn't a game.










Well, for some of us it is.

[cfusionpm]

Originally Posted by serialk11r

If you're like some people I know (cough female) who like to go on shopping sprees and impulse buy everything they see on the rack, then yes you'll run into trouble spending money in advance.

My girlfriend used to be just like that, and unknown to me had nearly 5 digits of credit card debt when I met her. When she was in high school and college, her parents never taught her the value of money. They were decently well off and said that if she needed something, just throw it on the credit card and we'll take care of it later. Well... 7.5k debt later and we have some problems.

After meeting me and my frugal spending, she asked for help. I personally use a justification system for each purchase, and being the OCD, number-counting nerd I am, I made it based on point values. You need at least 6 points to justify buying something in the 6 point plan. Each justification is based on a 1-5 point scale. This means that you need at least two reasons to get something, with at least one huge reason and one additional small reason. OR you need several contributing small reasons. The points in of themselves are kind of meaningless once you build this into your buying habits. It basically boils down to justifying your purchases to yourself as if you were justifying them to someone else. I can't tell you how much money this has saved me and how much more I appreciate and value the things I do end up buying.

Example: I want a new set of nice bed sheets.
+3 One of my sheets has a small tear in the bottom from a hang nail and should be replaced, but since I rotate two sets, I don't need it immediately
+1 Both my current sheets are blue, I want to mix up with a different color
+1 The nice 800 thread count set is on sale at Target
+1 They have the right size in stock in a sand cream color that matches perfect with my carpet

Or more appropriate here: I want a Perrin exhaust for my FRS.
+2 adds HP
+2 sounds amazing and not too loud
+1 on sale for some holiday, plus free shipping
+1 replaces tiny, silly looking stock exhaust tips

And there's your six points. Completely arbitrary and uniquely individualized, but is a structured way to talk yourself into or out of buying things you may or may not really need (or even want). Going through this style of thinking, nearly 2 years after we started dating, she has not only cut down purchases significantly, she has been able to take the extra saved money and pay down the debt almost entirely (less than $500 remaining, to be finished before August when she moves in ).

[Dave-ROR]

Originally Posted by suaveflooder

Lol, make good decisions in your 20's and there is no reason why you can't be driving a $100k car in your mid to late 30's. There is no need to wait until retirement. Just do things in the correct order

What happens is that people live in their means or above it. They have their work 401ks, a car loan, mortgage and CC debt….by the time they get to retirement, they are using their 401ks to continue to pay off their debts! It really is about balance. I started late, but I will still have my $100k car probably by the time I'm 40

I could go buy a 100k car right now and put 50% down without touching investments or retirement savings. Using your own logic though, you still shouldn't if your focus is financial responsibility.

I get the authors point but he's coming from purely a financial point of view. It makes sense in that world but humans are emotional creatures so it doesn't work for most of us. (Although except for the BRZ my other cars easily fit in with his 1/10th rule)

I put $800/month into my car bank account (yes I have an account just for car shit/racing/HPDE funds/etc). I basically just use that and if there is money there I spend it otherwise I wait for it to build up. I do over 10% of gross in retirement funds/investments. The rest of my money I view as disposable for whatever I want and for normal bills. I keep at least 6 months of "severance" just in case.

So i can waste money on a BRZ if I want to

[suaveflooder]

Originally Posted by Dave-ROR

I could go buy a 100k car right now and put 50% down without touching investments or retirement savings. Using your own logic though, you still shouldn't if your focus is financial responsibility.

I get the authors point but he's coming from purely a financial point of view. It makes sense in that world but humans are emotional creatures so it doesn't work for most of us. (Although except for the BRZ my other cars easily fit in with his 1/10th rule)

I put $800/month into my car bank account (yes I have an account just for car shit/racing/HPDE funds/etc). I basically just use that and if there is money there I spend it otherwise I wait for it to build up. I do over 10% of gross in retirement funds/investments. The rest of my money I view as disposable for whatever I want and for normal bills. I keep at least 6 months of "severance" just in case.

So i can waste money on a BRZ if I want to

You want a cookie? I'm in the same boat, only I dump about $2k into my saving…do I get a cookie too? I could have easily bought my car with cash. Doesn't mean I need to go blow money on another car, or even my current car for that matter? Not at all. THAT WAS THE WRITER'S POINT.

" No one is stronger or more dangerous than a man who can harness his emotions. " - Act of Valor

If you truly live off your emotions, I would be happy to introduce you to my wife. Sadly, I do not.

edit: you should be putting MINIMUM 15% of your income into investments. Imigine how much more money you COULD have and still play with your BRZ

[Dave-ROR]

Originally Posted by suaveflooder

You want a cookie? I'm in the same boat, only I dump about $2k into my saving…do I get a cookie too? I could have easily bought my car with cash. Doesn't mean I need to go blow money on another car, or even my current car for that matter? Not at all. THAT WAS THE WRITER'S POINT.

" No one is stronger or more dangerous than a man who can harness his emotions. " - Act of Valor

If you truly live off your emotions, I would be happy to introduce you to my wife. Sadly, I do not.

The point was buying a 100k car by the time you are 40 is dumb as well in line with the other things you have stated in your other post. I wasn't disagreeing with your general perspective.

No cookie needed here, I didn't mention numbers beyond my waste on car shit account. :shrug: I hope by savings you mean investments and not a bank account once you have a solid source of funding for emergencies.

Men suffer from emotions as much as women, just different ones.

[suaveflooder]

Originally Posted by Dave-ROR

The point was buying a 100k car by the time you are 40 is dumb as well in line with the other things you have stated in your other post. I wasn't disagreeing with your general perspective.

No cookie needed here, I didn't mention numbers beyond my waste on car shit account. :shrug: I hope by savings you mean investments and not a bank account once you have a solid source of funding for emergencies.

Men suffer from emotions as much as women, just different ones.

Not at all dumb if you have the money, have saved, and can buy it with cash and without suffering by your family or investments. "YOLO" remember? Only I have have done it the RIGHT way and planed for my current situation as well as my future. Also, I'm willing to wait. Key words…."I CAN WAIT" I'm shooting for 40, but if it doesn't happen, I'm okay with that. Money is being set aside for a house. I wasn't kidding when I said I would like to put 50% down in my other posts. I also fund a ROTH, and have an emergency fund. I don't live in a 740 square foot condo for nothing It's not easy, but I will be comfortable and be prepared for most emergencies.

We all have different paths we take. I grew up in a poor family. I'm not willing to go down the same path. My "branch of the tree" so to speak, is going to be different than my parents. Suffering now is only "power for the course." Reason why I have two jobs, and very little free time

edit: as far as emotion is concerned, I've learned not to show mine. Long story, but in the end, numbers or results are all that matter. Sometimes it's a crappy way to live, but it gets the job done.

[n2oinferno]

Originally Posted by Dave-ROR

No cookie needed here

If he doesn't want the cookie I'll take it.

[Dave-ROR]

Originally Posted by suaveflooder

Not at all dumb if you have the money, have saved, and can buy it with cash and without suffering by your family or investments. "YOLO" remember? Only I have have done it the RIGHT way and planed for my current situation as well as my future. Also, I'm willing to wait. Key words…."I CAN WAIT" I'm shooting for 40, but if it doesn't happen, I'm okay with that. Money is being set aside for a house. I wasn't kidding when I said I would like to put 50% down in my other posts. I also fund a ROTH, and have an emergency fund. I don't live in a 740 square foot condo for nothing It's not easy, but I will be comfortable and be prepared for most emergencies.

I thought we were talking about being financially responsible? In that case, a $100,000 car is *almost always* a dumb buy. The only exception is buying collector cars during a low cycle to sell high, just like stocks. Since I don't buy cars to collect them, a $100,000 car will *always* be a dumb buy for me (and this is coming from an enthusiast pov). It doesn't matter if I have $200k in the bank, or $200m. I'd rather buy 10 $10k cars that serve different purposes/uses.. and that for the most part have already depreciated.

[King Tut]

Originally Posted by Dave-ROR

I put $800/month into my car bank account (yes I have an account just for car shit/racing/HPDE funds/etc). I basically just use that and if there is money there I spend it otherwise I wait for it to build up. I do over 10% of gross in retirement funds/investments. The rest of my money I view as disposable for whatever I want and for normal bills. I keep at least 6 months of "severance" just in case.

I like this idea. I generally decide on my "racing budget" at the beginning of the year in deciding what events I will attend and leaving some flexability to attend other events should the desire arise. I have never actually planned it to that level or made a seperate bank account for it.

[King Tut]

Originally Posted by Dave-ROR

I thought we were talking about being financially responsible? In that case, a $100,000 car is *almost always* a dumb buy. The only exception is buying collector cars during a low cycle to sell high, just like stocks. Since I don't buy cars to collect them, a $100,000 car will *always* be a dumb buy for me (and this is coming from an enthusiast pov). It doesn't matter if I have $200k in the bank, or $200m. I'd rather buy 10 $10k cars that serve different purposes/uses.. and that for the most part have already depreciated.

You see that /DRIVE video of the $116k car game? Sounds like it would be right up your alley. I agree that unless you are buying a fully depreciated $100k car then it will always be a dumb financial decision just like buying any new/used car that hasn't fully depreicated is not a wholely smart financial decision. I would probably have my $100k car just in the amount I have lost in depreciation on my combined car purchases plus the amount of value in my current cars owned.

[OrbitalEllipses]

Originally Posted by King Tut

I like this idea. I generally decide on my "racing budget" at the beginning of the year in deciding what events I will attend and leaving some flexability to attend other events should the desire arise. I have never actually planned it to that level or made a seperate bank account for it.

Hmmmm, might try this with my other hobby. See if I can budget out a year and stick to it.

[gramicci101]

Originally Posted by OrbitalEllipses

Hmmmm, might try this with my other hobby. See if I can budget out a year and stick to it.

Escorts?

[tahdizzle]

Escorts are horrible cars! You need a new hobby.

[gramicci101]

... not the car.