Reply to Can we afford a $105k Range Rover or LX570?

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Reply to "Can we afford a $105k Range Rover or LX570?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]once you're wealthy (you're on the way there), cars &lt;5% of NW is a decent heuristic. I'd wait  a few years on the Range/LX.[/quote]

You're recommending up to 5% of NW for a depreciating asset that is typically replaced every 5 years or so?[/quote]

II plan to keep ours longer(more like 10), I’m saying that we are worth about $1.6mm and have $80k of cars (b/w 2, both of which are new and will last 10+ years) and that feels about right. The % will drop as we get wealthier and they depreciate. Any more than that feels like huge opportunity cost. It’s still expensive to own a couple of $40k cars and will cost us money in the form of missed investment returns (we could have bought 2 $20k cars). Our income is $400-$500k and we’re young so we can “afford” more but I like the 5% as a limiter on opportunity cost. Just a dumb personal finance rule. [/quote]

Got it.  I think I'm fortunate to be a reformed "car guy".  I now take the perspective of appreciating cars, but not feeling a need to personally own them.  So I'm perfectly content with my newish VW and old minivan.  I might get something nice when the kids are grown, but for I'm good for now.[/quote]

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