I've heard as high as half your annual salary for total MSRP of car to as low as 10% of net worth (the latter is absolutely ridiculous considering most people under 40 must have a negative net worth and that'd you now need a net worth of 300k just to afford a new Camry LE)
I'm 31
- No debt
- liberal 6 month emergency fund stashed up (33k+)
- Currently 30k cash available for a car
- 150k+ base salary
- Only ~5k of retirement total
Here are my rules
- I will only pay cash
- I will have 6 months of insurance/estimated maintenance stashed up first too
At 150k..I used to think I could buy most cars you see on the roads. That simply isn't the case anymore. I may be able to keep saving a year and pay 75k cash for something really nice. But..if that's half my net worth at age 32..then it might not be the best decision.
Ik....ik..how bad new cars are as investments. So, I was thinking of doing what everyone says to do and just buy a 3yo car. However, that doesn't seem much cheaper nowadays.
I'm very frugal and go by the Dave Ramsey school of thought of being pretty conservative. But fuck, sometimes you just want something nice.
Idk..how much would you spend at my situation.
Hypothetically..let's say next year when I'm ready to buy and I spend 50/100k of cash I have on a car and only have like 20k in a 401k at age 32...is it really that big a setback considering...
I'll have nice newish car for next several years (so part of this method is just getting car situation handled and then going HAM on investing for rest of my 30s)
So why do you think?
Thanks a lot!
Submitted July 28, 2024 at 12:02AM by throwmeaway_1992 https://ift.tt/n5uTKXr
