When is your "time to spend"?

Dylan33

Dylan33

I've just bought my first "nice car". Audi a4 avant. Sat here thinking it over for weeks. Should I shan't I ? Then decided its now or never! At what time in our lives do we decide to go for the little luxury s ? What's the point in all this investing and saving if we're going to get to 70 years old and finally discover we can now afford to get that soft top Merc or the boat or whatever? Will we be too old to appreciate them?

I managed to salary package it. I could have gone for the new falcon or such like but thought what the hell! It's not going to hinder my investing in the near future too much so I went for it.

I think there might be a few better options than the Novated lease system out there but at the moment this suits me.

So! At what point do we say its time to cash in a bit?
 
Pretty much need to ask one self whether its cars or such doodads that make ones life meaningful over everything else, or is a plain simple car that gets you from A>B ok and the resulting savings go into bigger and better things like retiring earlier.

Dunno, but that's just me.

Either way, it's your life, you decide, and it looks like you already did, so why question it?
 
Anytime that you can afford it. If you have 5mil cash or investments, it is not unreasonable to buy a 100k mercedes e class but probably unwise to buy a 1mil rolls royce. Spending on a 3 mil house would also be excessive.

So it all depends on how old you are and how much dollar you have and how much passive income you have achieved. Retirement / ability to not work for money/ financial independence is certainly the number one luxury item I am saving for at the moment. Some save for cars, mansion deposit, holidays but I think that financial independence or high passive income generation is a much more worthwhile savings goal. Once this is achieved, hopefully, at a relatively young age, then I think we can consider luxury discretionary items.

As a principle, it is best to be able to pay cash for depreciating items or liabilities / non-income producing goods. But don't have regrets or buyer's remorse. If you are young and splash out on an audi a5, you have plenty of time to recover. Just aim to really splash out next time on a rolls royce phantom ( you know you have made it and so does everyone else) - it is so much better than run of the mill mercs, audis, bmws which you will find as routine cars in certain suburbs of sydney and melbourne.
 
china said:
Anytime that you can afford it. If you have 5mil cash or investments, it is not unreasonable to buy a 100k mercedes e class but probably unwise to buy a 1mil rolls royce. Spending on a 3 mil house would also be excessive.
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We fit this description almost spot on, except we drive a Toyota Tarago.
An expensive PPOR can lead to some impressive capital growth with no CG tax, especially if you buy well.

I think of more importance is, how strong is your cashflow....
 
Ace in the Hole said:
We fit this description almost spot on, except we drive a Toyota Tarago.
An expensive PPOR can lead to some impressive capital growth with no CG tax, especially if you buy well.

I think of more importance is, how strong is your cashflow....
Click to expand...

The only problem with expensive PPOR is that you cannot really access it to buy cars, flights to Europe and groceries without incurring significant interest costs. So if a person's net worth is all tied up in their 5mil PPOR and there were no other assets nor income, their lifestyle would be significantly impaired. In fact, they would qualify for the age pension. Selling to downgrade to a 2mil ppor to free up funds for living would mean immediate downgrade of lifesyle.
 
china said:
The only problem with expensive PPOR is that you cannot really access it to buy cars, flights to Europe and groceries without incurring significant interest costs. So if a person's net worth is all tied up in their 5mil PPOR and there were no other assets nor income, their lifestyle would be significantly impaired. In fact, they would qualify for the age pension. Selling to downgrade to a 2mil ppor to free up funds for living would mean immediate downgrade of lifesyle.
Click to expand...

oprah-disagrees-with-your-nonsense.gif
 
china said:
Selling to downgrade to a 2mil ppor to free up funds for living would mean immediate downgrade of lifesyle.
Click to expand...

Yeah I know, a 2 million ppor is practically a hut with a mud floor for the upper class. If they moved into one they would have missionaries at their door showing them the miracle of ice and showing them the light from their heathen ways.

And the Mercedes would not fair too well from not being in a heated garage. Its a truly shocking state of affairs to be in.
 
DaveM said:
Yeah I know, a 2 million ppor is practically a hut with a mud floor for the upper class. If they moved into one they would have missionaries at their door showing them the miracle of ice and showing them the light from their heathen ways.

And the Mercedes would not fair too well from not being in a heated garage. Its a truly shocking state of affairs to be in.
Click to expand...

Haha.

China does make a somewhat valid point. $2M vs $5M houses are vastly different. About $3M in fact :p

$2M houses can simply be an average house in a good neighborhood. $5M houses... you actually get a fairly impressive house as well. That is going by what ive seen in the past at least.
 
My point is that if all your net worth is tied up in your PPOR when it comes to retirement and there are no other assets / income, it will mean a definitive downgrade in lifestyle if it requires selling of PPOR to free up funds for living. Therefore, I believe that to facilitate financial independence, it is best not to spend too much on ppor.
 
DaveM said:
And that place is a dump for someone who has spent their life in something worth $10m and so on and so forth ad nauseam.

Do you have anything to contribute to the forum after all these months apart from trolling?
Click to expand...

Thats incorrect. In Sydney, there reaches a plateau in prices high end houses with high end suburbs.
 
In the answer to the op, if you can fight the desire for "stuff" ala mustachion style, then you never really end up letting loose with over the top purchasers. If you can get your head around the fact that a vast amount of consumption is only a want and there is a only a fleeting buzz from buying the stuff, you never really would spend or need whole lot of cAsh ever.
Good for the planet too
 
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