I (37m) am a car person. I love cars and spend an inordinate amount of time researching cars that I will never buy. My style is usually sub $10-15K cars in great condition that have already hit the bottom of the depreciation curve. I love the feeling of having no car payments. I love the fact that if my car were to be set on fire, it would hardly make a financial dent.
However, I'm getting older and there is a little voice telling me "Hey I should act like a grown up and get a real car. A nicer newer car that people would enjoy riding in like the successful 30-something that I am!".
I am hoping for Reddit to help me decide whether or not to listen to this little voice given the following facts:
- Single, no kids
- Net worth is approximately $500k (combo of mutual funds and cash, renter so no home equity, no debts, about $136k in retirement accounts)
- I am making a career pivot and going back to school. My income trajectory for the next five years is: Year 1 ($0), Year 2 ($0), Year 3 ($75K), Year 4 ($100K), Year 5+ ($100-150K)
- My expected living expenses over the next 2 years when I'm making zero is $120k (including education costs) which will just come out of my savings. So my net worth will take a 25% hit.
- The car I'm looking to buy is a 2021 model year and will be about $40k including taxes, and I'm planning on just using cash. It will likely depreciate by $10k over the next 3-5 years, which is about the time frame I plan to hold onto it.
- My current car is worth around $10K but I love it too much to sell, so it'll just become a weekend toy. Maybe I'll gift it to someone in my family on the condition they don't sell it!
Irresponsible, or am I a tightwad?
EDIT: Lots of great responses, appreciate the input. One thing I think people are getting attached to is the $40K number, but like...when I inevitably resell it I will only be out the cost of depreciation which is maybe $10K. If job prospects are bleaker than my current outlook I can always revert back to my normal cheap car ways no?
Submitted October 08, 2023 at 11:15PM by Odd-Interaction-2858 https://ift.tt/jhNAJbI
