The balance: saving too little vs saving too much. AND Tesla

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why not the model 3? Starts at 35k.

Presumably because it would take 3 years for OP to obtain one.

OP can hold off a few more years. Save some money.

Y'all are ridiculous. OP has a net worth 21 times higher than the average person her age. They can splurge on a car.

[Anonymous]

Don't listen to the crazy penny pinchers on this site. You can afford the car. Your savings are good. You don't need a 100k emergency fund. Your mortgage payment is fine for your income.

[Anonymous]

Your husband sounds kind of like me... more of a Nissan Leaf person than a Tesla person. But I'm also waiting a few more years for the all electric to become more mainstream.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. Since many are wondering about our mortgage I will clarify. Our PITI is $4250 with 27 year left. I do not intend to pay the 3.9% loan sooner. My general rule is 1/4 of our income for each of the 4 category: taxes, house, saving and other (food, daycare cost, vacation, etc ..). Our house was brand new so I do not expect any of the big ticket item for at least another 5-7 years. I know most of you like to own your house free and clear but I like leverage. None of this in defense of buying the car by the way.

That is a huge mortgage for your income.

Our HHI is $250k and our mortgage is $4500. It's no big deal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. Since many are wondering about our mortgage I will clarify. Our PITI is $4250 with 27 year left. I do not intend to pay the 3.9% loan sooner. My general rule is 1/4 of our income for each of the 4 category: taxes, house, saving and other (food, daycare cost, vacation, etc ..). Our house was brand new so I do not expect any of the big ticket item for at least another 5-7 years. I know most of you like to own your house free and clear but I like leverage. None of this in defense of buying the car by the way.

That is a huge mortgage for your income.

No, it's not.

[Anonymous]

I wouldn't do it at that income and with that mortgage. You don't have enough in liquid savings to pay cash and have enough liquid for 2 houses.

And the fact that a dentist driving a Tesla is ridiculous.

[Anonymous]

Anonymous wrote:Nope, as Suzie Orman would say, "DENIED!"

You need to bump your net worth before you start spending on depreciating assets and boy toys.

Aren't the Teslas all two door?

Suzie Orman is for the rubes. Do you actually watch her? OMG, how gullible.

[Anonymous]

I wouldn't get the current Tesla but you could wait abd see what Chevy's new Bolt is like-- coming this Fall for less than 1/2 the price or if you are patient you could get Tesla's next car but that may take years. The Bolt looks like a very nice car with cool tech but Tesla is sort of the Apple of cars and some people just want that.

[Anonymous]

Denied. you need to save enough cash to pay off a Tesla with cash. You don't have the liquidity.

[Anonymous]

+1 to the other poster who suggested the Tesla 3. That's a good compromise. Half the cost of the S or the X and still all the cool Tesla stuff. Although the X would be better with the kiddos. I'd be fine buying one in your financial position. We've looked at them before, but they just don't work for what we want to do. Too limited with the charging network and just wouldn't work well for trips down to Hatteras, towing the boat, drives in the Shenandoah, etc. If your primary use case is commuting though then I think it's a great option if you go into it with the mindset that it likely isn't a "buy it and hold it" car. There are just too many doodads in that car for me to believe it's going to be able to be a reliable car for 10-15 years. I think it's more of a car for people who trade up every few years or lease.

[Anonymous]

Anonymous wrote:My parents saved very little (good income, good life, generous with others but very little left). My in-laws save too much (in the last couple of years, they gave their kids 28K each due to estate planning but argue about taking a few hundred dollars flight because it is too expensive).

I am hoping to strike a balance. Enjoy our life now, save enough to enjoy retirement. My husband is more like his parents (he keeps adding oil to his 10 year old dented Civic, sticking two kids back there despite the two doors model and claims it is fine).

Our finance:
We are both mid thirties
240K HHI
200K equity in our 900K house
80K equity in our 230k condo rental
760K in our 401K/roth IRAs (we contribute 47K to these accounts each year)
20K in 529 for 1 and 3 year old (we contribute 10K to these accounts each year)
100K in saving/bonds/general-investing for Emg/whatever
cars are paid but oldish (10 and 9 year old).

My husband is wonderful and he is not into worldly goods/or cars. But he keep talking about how nice the Tesla "concept" is (he did not say he wants one because "the Civic is good for at least another 2 years!"). He commutes 45 min-1 hr each way. I think he will enjoy the Tesla and financial we can take it (80K!) but close.What say you DCUM, should I talk him into it? or am I veering toward spending too much?

People who are enthusiastic about something derive more satisfaction/utility from ownership versus non-enthusiasts. This is why car guys tend to be willing to pay more for cars. Tesla is the nice car for non-car-guys, generally speaking. Therefore, the only people who buy Tesla tend to be executives or other high income individuals who are bored by similarly expensive cars from German or Japanese brands. Your husband does not seem to fit into this category. Granted there are many people stretching themselves to afford luxury goods, and many of them do not encounter financial ruin. However, I maintain that spending $80k on a car when your income is only $240k and a net worth of just slightly over $1M is not a good financial decision. I am a car guy and was in your financial situation perhaps 9 years ago and bought a new BMW 3 series for about $45k. In retrospect it was a bit reckless, though I did really really really enjoy driving that car and I am glad I got to own a straight six BMW.

[Anonymous]

No that's stupid. Why would you want an asset that will lose a ton of value within the 5 minutes it is driven off the lot?

And you have kids?

A tesla would be something to buy when you children are grown and you can afford that lifestyle. Dumb decision right now.

[Anonymous]

Anonymous wrote:+1 to the other poster who suggested the Tesla 3. That's a good compromise. Half the cost of the S or the X and still all the cool Tesla stuff. Although the X would be better with the kiddos. I'd be fine buying one in your financial position. We've looked at them before, but they just don't work for what we want to do. Too limited with the charging network and just wouldn't work well for trips down to Hatteras, towing the boat, drives in the Shenandoah, etc. If your primary use case is commuting though then I think it's a great option if you go into it with the mindset that it likely isn't a "buy it and hold it" car. There are just too many doodads in that car for me to believe it's going to be able to be a reliable car for 10-15 years. I think it's more of a car for people who trade up every few years or lease.

This is another point that bears repeating. Tesla's owners have been first adopters who have been quite easy going with issues related to the car. Tesla has been frantically addressing quality issues and the car is a lot better since launch. However on the whole, Tesla is still suffering from reliability problems which should give people pause if they intend to be a main daily driver without a backup.

[Anonymous]

Anonymous wrote:My parents saved very little (good income, good life, generous with others but very little left). My in-laws save too much (in the last couple of years, they gave their kids 28K each due to estate planning but argue about taking a few hundred dollars flight because it is too expensive).

I am hoping to strike a balance. Enjoy our life now, save enough to enjoy retirement. My husband is more like his parents (he keeps adding oil to his 10 year old dented Civic, sticking two kids back there despite the two doors model and claims it is fine).

Our finance:
We are both mid thirties
240K HHI
200K equity in our 900K house
80K equity in our 230k condo rental
760K in our 401K/roth IRAs (we contribute 47K to these accounts each year)
20K in 529 for 1 and 3 year old (we contribute 10K to these accounts each year)
100K in saving/bonds/general-investing for Emg/whatever
cars are paid but oldish (10 and 9 year old).

My husband is wonderful and he is not into worldly goods/or cars. But he keep talking about how nice the Tesla "concept" is (he did not say he wants one because "the Civic is good for at least another 2 years!"). He commutes 45 min-1 hr each way. I think he will enjoy the Tesla and financial we can take it (80K!) but close.What say you DCUM, should I talk him into it? or am I veering toward spending too much?

Replace the civic with a Prius.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Since many are wondering about our mortgage I will clarify. Our PITI is $4250 with 27 year left. I do not intend to pay the 3.9% loan sooner. My general rule is 1/4 of our income for each of the 4 category: taxes, house, saving and other (food, daycare cost, vacation, etc ..). Our house was brand new so I do not expect any of the big ticket item for at least another 5-7 years. I know most of you like to own your house free and clear but I like leverage. None of this in defense of buying the car by the way.

That is a huge mortgage for your income.

Our HHI is $250k and our mortgage is $4500. It's no big deal.

Actually it's a large mortgage for your inclme and you wouldn't be able to pay it on one mortgage. We make over 400k and our 15 year is 5100. I wouldn't want it any higher