# How much must I be worth to buy a Ferrari?



## diegohwang

what's a good net worth to justify buying a ferrari or any luxury sports car? should it not be more than 5% my net worth if we think of it in percentages?










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## City74

I’m sorry but what a stupid thread 


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## ady1989

City74 said:


> I'm sorry but what a stupid thread
> 
> Sent from my iPhone using Tapatalk


You need enough money to not only buy the car but afford the very high maintenance costs.


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## Hamstur

By same 5% measure, someone who owns a 30K car should have a net worth of of 600K.


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## delco714

I dunno

I have a 108k$ jaguar
I am 29
I make 209$k usd a year

Networth.. hmm. 100k
Whoops


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## delco714

delco714 said:


> I dunno
> 
> I have a 108k$ jaguar
> I am 29
> I make 209$k usd a year
> 
> Networth.. hmm. 100k
> Whoops


Oh sorry... We need pics right


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## TheWalrus

What's the point of this question? The answer is obviously, 'it depends'. Some car guys, with regular salaried jobs, responsibly drop Ferrari money into their cars - because they're passionate about them and they focus on only that hobby. Other people can overextend on a used Kia because they blow money everywhere.


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## Golder

I don't know why there are haters on this question. I've often thought about things this way. As my net worth has grown significantly over past few years I've had thoughts like, "how much money should I have in the bank before I buy a Rolex" etc.

I do think it would be very variable depending on your situation. For example if you're a bachelor vs having three kids you're going to be putting through college in the next 10 years.

If you're a bachelor I'd say yeah, if its 5% of your net worth go for it and its still fairly responsible, maybe even if you've only got $3m (10%). If you've got three kids to put through college in the future than probably more like 3% of net worth $10m. 

The $30k car to $600k net worth analogy doesn't make sense though, because a $30k car is a car and is generally considered a necessary operating cost (sure you can get a $5k car but then its not reliable). A $300k Ferrari is not a car its a toy, if you have the Ferrari then you also need a $80k Escalade or similar to go buy groceries.

To the 29 year old with the Jaguar, good for you but you should definitely consider focusing more on your long term wealth. Saving $50k a year it takes a long time to get to $1m. If you keep these spending habits up you might always appear rich, but you might never be actually wealthy.


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## Golder

double post


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## delco714

Golder said:


> I don't know why there are haters on this question. I've often thought about things this way. As my net worth has grown significantly over past few years I've had thoughts like, "how much money should I have in the bank before I buy a Rolex" etc.
> 
> I do think it would be very variable depending on your situation. For example if you're a bachelor vs having three kids you're going to be putting through college in the next 10 years.
> 
> If you're a bachelor I'd say yeah, if its 5% of your net worth go for it and its still fairly responsible, maybe even if you've only got $3m (10%). If you've got three kids to put through college in the future than probably more like 3% of net worth $10m.
> 
> The $30k car to $600k net worth analogy doesn't make sense though, because a $30k car is a car and is generally considered a necessary operating cost (sure you can get a $5k car but then its not reliable). A $300k Ferrari is not a car its a toy, if you have the Ferrari then you also need a $80k Escalade or similar to go buy groceries.
> 
> To the 29 year old with the Jaguar, good for you but you should definitely consider focusing more on your long term wealth. Saving $50k a year it takes a long time to get to $1m. If you keep these spending habits up you might always appear rich, but you might never be actually wealthy.


Lmao. You don't know me. You don't know my situation at all actually 

I've been making six figures since 23 and paying school loans and trying to enjoy life. Why? My parents got their dreams and life expectancy cut 20 years short. It changed my life.

So. I'll say it again. You don't know me and my situation. I have everything I need doing what it needs to make me financially independent before 50 and more money than I can use when I retire at that time. I've earned what I have

I have no kids, and I don't really spend money elsewhere. I also didn't pay 100k.

Don't you worry, I'll have actual wealth in a matter of time. I'd probably recommend minding your business when making statements like that


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## diegohwang

Golder said:


> I don't know why there are haters on this question. I've often thought about things this way. As my net worth has grown significantly over past few years I've had thoughts like, "how much money should I have in the bank before I buy a Rolex" etc.
> 
> I do think it would be very variable depending on your situation. For example if you're a bachelor vs having three kids you're going to be putting through college in the next 10 years.
> 
> If you're a bachelor I'd say yeah, if its 5% of your net worth go for it and its still fairly responsible, maybe even if you've only got $3m (10%). If you've got three kids to put through college in the future than probably more like 3% of net worth $10m.
> 
> The $30k car to $600k net worth analogy doesn't make sense though, because a $30k car is a car and is generally considered a necessary operating cost (sure you can get a $5k car but then its not reliable). A $300k Ferrari is not a car its a toy, if you have the Ferrari then you also need a $80k Escalade or similar to go buy groceries.
> 
> To the 29 year old with the Jaguar, good for you but you should definitely consider focusing more on your long term wealth. Saving $50k a year it takes a long time to get to $1m. If you keep these spending habits up you might always appear rich, but you might never be actually wealthy.


you raise some very interesting points considering kids and whatnot, but for someone young and with no kids in the foreseeable future, I'm trying to justify a purchase for an expensive "operating expense". So you do give some insightful feedback on appearing to look rich than to actually be rich. If you're worth $50M then the cost of a ferrari is a minuscule cost as is for a net worth of $100M. So the question would be at what point does owning a ferrari become a minuscule "operating expense"...

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## TJ Boogie

I don't know, you can have a high net worth via cars/real estate, but you'd want to consider your worth in terms of liquid assets. I think you have to consider your debt, your income, and talk to a wealth management expert before making such a purchase. Also do visit Ferrari, I know that it can take a couple years for your order (depending on the car), and that the car needs to go in frequently (operating costs as you mention). Get an idea of of maintenance costs. If you can afford it, do it -- we only live once


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## Gunnar_917

If you have to ask the question, probably not enough


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## Golder

diegohwang said:


> you raise some very interesting points considering kids and whatnot, but for someone young and with no kids in the foreseeable future, I'm trying to justify a purchase for an expensive "operating expense". So you do give some insightful feedback on appearing to look rich than to actually be rich. If you're worth $50M then the cost of a ferrari is a minuscule cost as is for a net worth of $100M. So the question would be at what point does owning a ferrari become a minuscule "operating expense"...


Of course it all depends on your goals and your income as well as your net worth. You are young so you should be looking at the growth of your net worth year over year. How much does the ferrari impact your ability to grow your net worth? A standard assumption is that you will get 7% return on your invested funds long term in the market. So take your net worth and multiply it by 0.07 and add the $$ you are saving every year from income.

Maybe space the cost of the car out over 4 years. Assume $300k Ferrari so $75k plus the operating costs, I really have no idea what these are but lets say $10k a year I imagine insurance is nuts. So $85k a year. If you spend $85k over the next 4 years does this have a major impact on your ability to grow your net worth? If you are growing your net worth by $150k a year now then $85k is a pretty major hit to that. If you're growing it by $400k a year then its still a 20% hit on your growth, but $315k left gets you pretty close to a $1m growth in 3 years so you're doing just fine even with the Ferrari.

Think about your goals. What is your net worth now and what do you want it to be in 5 years? 10 years? Look at your annual savings rate, are you on track to hit those goals? How much does the Ferrari slow you down?

A nice number to look at is $3m net worth, assuming 7% return this gives you $210k /yr - taxes ~$180k. You can live comfortably as a family of 4 on $180k a year and you don't even need to work. But the market will have down years you can't count on 7% every year so even with $3m being retired at a young age doesn't look sustainable. But once you have $3m your investment growth really starts to hit a stride and you can jump to $5m or $8m in a reasonable period of years depending on income savings rate. Once you hit $8m thats $500k a year of investment income. Now you are wealthy but a few down market years in a row could still hurt you if you're not bringing in employment income. If you get to $15-$20m, then you are truly safe you'd have to be pretty stupid to drop out of sustainability even without working.


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## ZIPPER79

Hey dude don't overthink it.....If you can afford it no matter if it's 5% or more, and you seem too anal to own one anyway. Once you get it you'll probably not let your wife/girl friend or significant other drive it. Then when you do drive it, Sundays only, you won't stop for food or a P break so nobody could look at it.....Best for you is to get a big poster and pin it on the garage wall take a seat in front of it and have a single malt and dream.....LOL



diegohwang said:


> what's a good net worth to justify buying a ferrari or any luxury sports car? should it not be more than 5% my net worth if we think of it in percentages?
> 
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> Sent from my iPhone using Tapatalk


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## cruzmisl

This question has so many variables it cannot her accurately answered. For me the biggest question is which Ferrari are you buying? Is it a 2016 LaFerrari which auctioned for ~$7 million or is it the stunningly beautiful (rolls eyes) 1985 Ferrari Mondial which can be had for ~$30k

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## Tommywine0

Imo, for a younger person owning a Ferrari, it's more about cash flow than net worth. Unless you're paying the full amount in cash, I don't think net worth has much to do with it. By bringing net worth into it, you're trying to justify it as responsible, which doesn't go hand-in-hand with owning a Ferrari at any age.
We all did irresponsible stuff when we were young. If you have the cash flow, your obligations taken care of, and want to do it, go ahead.


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## bigclive2011

Not a lot to buy a Mondial, certainly in the UK.

A new one obviously significantly more, but unlike Porsche 911’s which I have owned, and proved to be relatively cheap to run and maintain, are very expensive to service, and the intervals are very frequent.


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## seedubs1

Golder said:


> sure you can get a $5k car but then its not reliable


False. I'm admittedly not a car guy. I don't care what I drive in regards to what it looks like or fanciness.....as long as it is reliable, that is ALL I care about. I have never spent over $5k on a vehicle. $5k can get you a GOOD used Honda with under 100k miles on it. It'll run for another 100-200k miles if properly maintained.

I hear all the time from some acquaintances that they complain about not having their finances under control.....and they're driving around in $30k + new cars. Entitlement is an issue. I had one tell me "well, not everyone wants to live like you." That's fine, but don't complain about your debt then. Because this notion that only $30k cars are reliable is some of the most ludicrous junk I've ever heard.


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## diegohwang

Tommywine0 said:


> Imo, for a younger person owning a Ferrari, it's more about cash flow than net worth. Unless you're paying the full amount in cash, I don't think net worth has much to do with it. By bringing net worth into it, you're trying to justify it as responsible, which doesn't go hand-in-hand with owning a Ferrari at any age.
> We all did irresponsible stuff when we were young. If you have the cash flow, your obligations taken care of, and want to do it, go ahead.


I like your perspective on this.

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## diegohwang

ZIPPER79 said:


> Hey dude don't overthink it.....If you can afford it no matter if it's 5% or more, and you seem too anal to own one anyway. Once you get it you'll probably not let your wife/girl friend or significant other drive it. Then when you do drive it, Sundays only, you won't stop for food or a P break so nobody could look at it.....Best for you is to get a big poster and pin it on the garage wall take a seat in front of it and have a single malt and dream.....LOL


you're hilarious man.. might as well save myself the trouble and buy the poster. good thinking

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## FinancialComplicaton

To justify any luxury, I would say *it's such that in some amount of years, the impact of the purchase on your net worth is negligible ( <5%)*. This is not to say spend less than 5% of savings, because of variabilities in peoples savings to income ratio. In the case of a car, I would say 5 years as presumably this is the life that you would keep a luxury car. So you want to make sure that owning the car for 5 years doesn't drastically negatively affect your net worth in 5 years. Additionally, this conservatively assumes no salvage value though in reality you might be able to get some money back after selling your car after 5 years.

What we're trying to calculate is "*W*", which is percent of excess savings after needs that can be spent on superfluous things like luxury cars or watches. The main lever that affects this is income to savings ratio, some people early on their life have more income relative to savings while those further along in their careers will likely have it the other way around. For example, if your income was 100k a year but you only had 10k of excess savings after emergency fund and retirement, you could probably justify spending 100% of that 10k. On the other hand, if your net worth was 100m and your income was only 50k, spending even 10% of your savings could be quite detrimental. Obviously that 10% means 10m... but those are extreme examples. Hopefully the below calculation takes into account the nuance:

I used this formula to calculate how much I could spend on watches but I think it could be repurposed for any luxury spending.

I = Interest rate on investments. (Example 7%)

P = Percent of your Excess cash savings that your annual income savings represent. I.e. If your excess cash savings is 100,000 and you save 20,000 a year after all your expenses, your P = 0.2

T = Time horizon. (Let's say 10 years)

W = Percent of your Excess cash savings spent on marginal luxury. (Marginal Luxury is the difference in value from what you need and what you want. i.e. if you need a 20k car to commute to work. If yo ucalculate W to be 10%, and your excess cash savings is 200k, you can justify 10%*200k+20k = a 40k car).

Essentially, you take the money you would have in 10 years if you didn't buy the watch and compare it to the money you would have in 10 years if you did buy the watch, and you decide if the difference is upsetting.

A formula is excel is this:

% poorer you would be after T years after spending W% of your savings on a watch=(FV(R,T,-P)+(1-W)*(1+I)^(T))/(FV(R,T,-P)+(1)*(1+I)^(T))-1

(FV is an excel formula that calculates future value of payments)

Anyway, the guiding principle is that for a luxury splurge, your finances are not materially affected. (I reiterate luxury so separate the necessity component from the luxury component. For a watch, i considered it a 100% luxury since the necessity component of telling time essentially free on other devices.)


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## captainscott

You should listen to him, I agree with everything he said. The illusion is easy, actual wealth not so easy. Read rich dad /poor dad.


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## lawtaxi

Honestly, too much money EVEN if you have $5M in the bank. It is status, not value IMO.


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## mt_timepieces

Did you buy Ferrari yet?

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## PrisonEscapementWheel

Most everyone I know with a Ferrari is six figures in debt, at least.


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## dan360

what are your plans with the car? daily driver? weekend toy? 5 month affair? flipper?

I owned a Ferrari when I was making less than six figs/year. Bought an auction 'fixer upper', enjoyed it while I pimped it out, and sold it for a profit. Sweat equity. 

It's a complex situation difficult to answer in simple terms, really.


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## panzerr

If you have to ask...you probably can't afford one.

On the other hand, who cares? Sports cars might look neat, but they are terrible to drive.


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## rewind

I don't know what your worth is. My wife drives a Ford King Ranch for her horses, and I drive a Ford Platinum to watch over everything. So hmmmmmmm?


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## mpatton4re

Robert Kiyosaki (Rich Dad Poor Dad fame) advises .... First acquire assets not liabilities. If your assets throw off enough income to pay for your Ferrari... go for it. 


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## mr.mozes27

You're just setting goals! Not a dumb question at all! Would agree with the 5% rule. Also I've heard people who just have a regular job and bought a super exotic car and all their money went into the car. The question is how bad do you want it and how much are you willing to spend into one car. 5% is definately a safe percentage.


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## Drksaint

Go for it.

I’m 44 now and have owned a few nice cars over the last 15 years (360,430,m3,Lotus,m5,911,Gallardo). I started when I was about 30 yrs old and, at the time, had no real net worth to speak of. I don’t believe there is any correlation between your net worth and your car. I know people worth $20m and they drive a Lexus. You either love cars or you don’t.

Some tips...
- never buy new....buy used (2-5yrs old). Let the first buyer take the 30-40% hit.
- buy low mileage Ferrari’s preferably under 10,000 miles.
- the cheapest Ferrari usually turns out to be the most expensive one.
- when you find a car, insist on a ppi from a reputable dealship.
I usually put little to no money down on every car. Use PenFed (or other credit union) for financing...usually around 2.5%-3.5% interest (will vary with your history and credit) 60-72 months to keep the payment down. Swap cars every 2 years or so. If you buy right, you won’t get hurt. 

I have an 09’ 911 for the last 2 years and love it so much that I decided to keep it. Reliable, cheap to run, and visceral to daily drive.


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## Drksaint

Double post


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## Toothbras

I just bought a Porsche and might even buy another. Be warned, though, it's not going to arrive for like another week even though I have Prime. Why buy the real thing when you can run this across your desk while making "vroom" sounds?


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## longsk8

Golder said:


> To the 29 year old with the Jaguar, good for you but you should definitely consider focusing more on your long term wealth. Saving $50k a year it takes a long time to get to $1m. If you keep these spending habits up you might always appear rich, but you might never be actually wealthy.


+1 - To each his own, but he could retire in 10 years with the right investments. 29yo becomes 49yo quicker than you think.


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## Uncle Miltie

I suppose you buy what you can afford to spend. We lived in a small town in Ohio. My father was not a wealthy man, but he purchased a new Ferrari (250 GTE) in 1964 for $9,990 because he wanted a Ferrari to drive and had a wife and 2 kids to haul around. It was a great car, and he loved it. My father was a scientist and car enthusiast, and never let anyone work on the car, except himself. Again, far from wealthy, he kept the car until he sold it the late '70's, and he enjoyed it for a long time. As far as watches go, my dad wore nothing but Timex until Pulsar came out with the P2 Astronaut.


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## wolfwatch

Everyone will have their own opinions based on their own life situation, so take them with a grain of salt.

For me, it is no more 1 year's net income so you don't touch your capital. And pay cash.


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## wolfwatch

Everyone will have their own opinions based on their own life situation, so take them with a grain of salt.

For me, it is no more 1 year's net income so you don't touch your capital. And pay cash.


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## riff raff

Skip a used Altima and pick up this Mondial for $20k, with only 70k on it. It's probably been babied, so no worries.
https://www.hemmings.com/classifieds/dealer/ferrari/mondial/2224041.html


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## matador203977

You can have a high net worth via cars/real estate, but you'd want to consider your worth in terms of liquid assets. I think you have to consider your debt, your income, and talk to a wealth management expert before making such a purchase. Also do visit Ferrari, I know that it can take a couple years for your order (depending on the car), and that the car needs to go in frequently (operating costs as you mention). Get an idea of of maintenance costs. If you can afford it, do it


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## paulhotte

delco714 said:


> Lmao. You don't know me. You don't know my situation at all actually
> 
> I've been making six figures since 23 and paying school loans and trying to enjoy life. Why? My parents got their dreams and life expectancy cut 20 years short. It changed my life.
> 
> So. I'll say it again. You don't know me and my situation. I have everything I need doing what it needs to make me financially independent before 50 and more money than I can use when I retire at that time. I've earned what I have
> 
> I have no kids, and I don't really spend money elsewhere. I also didn't pay 100k.
> 
> Don't you worry, I'll have actual wealth in a matter of time. I'd probably recommend minding your business when making statements like that


Provided you can afford it, maintain it and still have some money left to take GOOD care of yourself, I say why not o for it...One might decide to save for the future he might never see due to uncertainty of life...SO WHY NOT?


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## De Wolfe

Whats your goals? > Will the purchase prolong your goals? > Are you ok with the extra time occurring due to the purchase? > If yes, then go ahead. 

I being enthusiast of both cars and watches, my purchases usually are out of the "financial" methods of calculating how much I need to by X value item.


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## delco714

paulhotte said:


> Provided you can afford it, maintain it and still have some money left to take GOOD care of yourself, I say why not o for it...One might decide to save for the future he might never see due to uncertainty of life...SO WHY NOT?


that's what my parents did now they're in their late sixties both have conditions that scraped off 10 to 15 years from their very high life expectancy and they can't really travel and spend their retirement money. I wasn't going to succumb to the same fate, though I was prepared to be like them before all that happened. Really changed my perspective on life.


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## Royal68

Depends on income and expenses. I'm 26 don't have housing expenses (rent/mortgage) I make 80k a year and drive a 2014 Maserati Quattroporte sq4 that was bought pre owned ( because depreciation sucks ya know?)


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## datbme150

it had to have been mentioned earlier here, but just in case it hasn't... if you have to ask, you ain't there yet.


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## schieper

With ferrari's its easy. Go to their show room and they will tell you if you are rich enough to be allowed to buy one. Let us know how that worked out for you 

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## TheWalrus

I just found out that I make enough to buy a Honda Fit.


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## delco714

Royal68 said:


> Depends on income and expenses. I'm 26 don't have housing expenses (rent/mortgage) I make 80k a year and drive a 2014 Maserati Quattroporte sq4 that was bought pre owned ( because depreciation sucks ya know?)


I heard mas owners are known well at the mechanic shop. You know, bc they are there so much.

Your decision makes mine look like a fiscally responsible no brainer..

Also, I didn't see any pics


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## Royal68

delco714 said:


> Royal68 said:
> 
> 
> 
> Depends on income and expenses. I'm 26 don't have housing expenses (rent/mortgage) I make 80k a year and drive a 2014 Maserati Quattroporte sq4 that was bought pre owned ( because depreciation sucks ya know?)
> 
> 
> 
> I heard mas owners are known well at the mechanic shop. You know, bc they are there so much.
> 
> 
> 
> 
> 
> 
> 
> 
> Your decision makes mine look like a fiscally responsible no brainer..
> 
> Also, I didn't see any pics
Click to expand...

Actually the Maserati isn't too bad. Haven't really had any problem with it besides the infotainment system being slow. Jags and Range Rovers also have the rep of being always at the mechanic's. The F Type is an asking car especially the exhaust... *****


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## Negan68

Talk about 1st world problems.


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## gopurdue999

My estimation is that if you are looking for the answer on a message board you are not even close. If you can write the check and there is no noticeable dent in your account then go for it and enjoy.


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## thetony007

Hamstur said:


> By same 5% measure, someone who owns a 30K car should have a net worth of of 600K.


somone get this guy a be .... actually, i feel sad now....


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## Mstrmusic

Life is short. Spend money and time on the things you love. Just don't go into debt.


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## ElliotH11

Buying a car such as a ferrari before you can truly afford it, will only make you resent it. It’ll forever be an object that hindered your finances, even if only temporarily. Don’t buy it just for the “look at me” affect either. The only people you’ll impress will be those who are materialistic!


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## Ross13

I've almost commented on this post a few times because there is just SO MUCH to say in response. My general rule is, if owning something specific is a life-long goal then save for it until you can pay enough down that you aren't harming your ability to pay for more important things (housing, utilities, retirement, your kid's college savings, etc.)

The bigger issue that a lot of people fail to consider with performance cars (especially exotics) is maintenance. This is where people who aren't "car people" may end up having buyer's remorse. If you want a Ferrari as a status symbol, but are not passionate about it beyond that, then you may regret the car after servicing it and dealing with Italian reliability and long term build quality.

In my opinion, anyone looking to buy an exotic car should consider: (1) How much do I need to save for said car before I can afford it? (2) Do I really understand what owning said car means? [Maintenance, reliability, insurance, etc.] (3) Is there something other than the name/image that draws you to the car? [Brand history and heritage, driving experience, does it give you "the tingles"]

At the end of day, if you aren't passionate about the actual car, as opposed to the idea of owning the car, then I believe you are more likely to regret it.


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## nicholascanada

A lot to ensure you can afford the maintenance from what I understand.


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## Kgriffin18

If you have to ask this question, then you probably cant afford the cost and up keep of one.


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## Rolla

Great advice.


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## Beastlytaco

Actually you’d be surprised how cheap you can get a vintage Ferrari. Mostly the ones that aren’t as desirable. F355 and the 308 are a few examples. Can be bought under 60k


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## Drksaint

Beastlytaco said:


> Actually you'd be surprised how cheap you can get a vintage Ferrari. Mostly the ones that aren't as desirable. F355 and the 308 are a few examples. Can be bought under 60k


Careful with 355's....timing belts will need to be changed every 4 years or so and that's an engine out service...cost is in the $10's of thousands. One of the best sounding cars on the planet though 

I'd go with a used 360 or 430 if you really want Italian. Or just buy German. Italians make the sexiest cars, but Germans build a much more reliable car. I've owned a few (Ferrari, Lamborghini, Alfa)...only car left is my 911...that I'll never sell. Best bang for the buck sports car on the market. Though the AR 4C is gorgeous and cheap for what you get...I'd probably still go with a Lotus Elise if I decide to add another car to my collection.


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## dayman-v-nightman

In my opinion, the cost of any car you buy should be less than 10% of your net worth. This may be conservative for some but really, having a depreciating asset that's is taking up more than 10% of everything you own just doesn't make sense to me.


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## TomppaHe

dayman-v-nightman said:


> In my opinion, the cost of any car you buy should be less than 10% of your net worth. This may be conservative for some but really, having a depreciating asset that's is taking up more than 10% of everything you own just doesn't make sense to me.


For buying a new car, I agree 100%. Buying a Ferrari does not have to be a bad investment. Some models that are not that highly valued at the moment, like 308 mentioned, are probably going up in future and may become a great investment as vintage Porsche owners know.

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## SequoiaMan

If you have to ask, you can't afford it.


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## forsakenfury

Like what the other 400+ replies say: it depends


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## cistercian

You should buy a Ferrari if you really, really understand what owning one means and if you love the car in question.
Obviously, you have to have sufficient capital to buy, maintain, and garage it and not do so to the detriment of your
other obligations. It is pretty simple really. You don't have to be a plutocrat to own one. But if not, you need to be dedicated.
Used ones are surprisingly affordable. Properly maintaining them is not inexpensive...to say the least.


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## cistercian

You should buy a Ferrari if you really, really understand what owning one means and if you love the car in question.
Obviously, you have to have sufficient capital to buy, maintain, and garage it and not do so to the detriment of your
other obligations. It is pretty simple really. You don't have to be a plutocrat to own one. But if not, you need to be dedicated.
Used ones are surprisingly affordable. Properly maintaining them is not inexpensive...to say the least.


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## Georgewg

Peter North owns and drives a Ferrari and he’s worth $10 million dollars.



The great John Holmes wears a digital watch.


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## Georgewg

Peter North owns and drives a Ferrari and he’s worth $10 million dollars.



The great John Holmes wears a digital watch.


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## dino888

well as along as you have no financial stress after purchasing one i guess you're good.


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## tdg2064

Shouldn't matter. If you find a great deal, buy it, drive it, sell it.

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## forsakenfury

Ain't what you are worth, its whether you can afford the payments long enough and get a good deal so that you can enjoy and sell at break even point or in some cases make money.


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## Time4Playnow

If you have to ask, you can't afford it.


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## neilziesing

For me, it’s not about the money. You can still find deals on some of the models from the 1980s. 

The issue is the inconvenience of the upkeep. These were never built for daily driving and the necessary maintenance to keep them in top shape is significant both in scope and cost.

Still there is nothing like a finely tuned Ferrari...


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## Stirling Moss

"I make young men's cars that only old men can afford"
-Enzo Ferrari

Kind of a catch 22 isn't it?


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## sam08861

delete double post


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## sam08861

Way too many other factors to consider, but given the available information.... Self imposed rules for me:

I'd say no more than 5% of stable cash on hand (what you have in checking/money markets/etc. as opposed to net worth that includes invetments, 401k, cars, homes, etc) for a cash purchase of all cars as the Ferrari won't likely be your daily driver. Not sure if leases are available and how that compares to depreciation and how long. Also, annual maintenance should be no more that 1% of cash on hand.

Also I try to buy cars I will keep for a long time depreciated 6yrs (seems to be the point a lot of luxury goods settle to a slower rate) but a new car may be what you want and perhaps you switch a lot to the latest/greatest. If you're in the 2nd category, I hope you're only asking because you are very thoughtful but believe someone should be in the 'don't have to ask' category if being seen and heard in the latest/greatest are of importance. Caveat would be if owning the car helps business/income enough to pay for itself over the ownership period.


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## sam08861

ps... other caveat would be if you happen to know your own "expiry date" and it's a bucket list item. Then all bets are off!


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## Tommywine0

sam08861 said:


> I'd say no more than 5% of stable cash on hand (what you have in checking/money markets/etc. as opposed to net worth that includes invetments, 401k, cars, homes, etc) for a cash purchase of all cars as the Ferrari won't likely be your daily driver.
> .


So one should have $6,000,000-$8,000,000 in immediately liquid cash to afford a Ferrari? Think about that for a minute.


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## lvt

From WIS's point of view, you must own at least a gold Rolex before owning a Ferrari.


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## marcusp23

Enough to pay cash for it


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## Maverixk

I agree with long term saving, 

But if your goal in this life is own one, 

hustle make the money, make sure you can afford and ball out bro. 

Im fighting to do the same (;


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## Maverixk

delco714 said:


> I dunno
> 
> I have a 108k$ jaguar
> I am 29
> I make 209$k usd a year
> 
> Networth.. hmm. 100k
> Whoops


Hey I'm curious as i'm not from the US,

But if you make 209, do you get taxed 40% on that? 
Whats your take home after Tax?

Sorry if my questions are too personal


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## delco714

Maverixk said:


> Hey I'm curious as i'm not from the US,
> 
> But if you make 209, do you get taxed 40% on that?
> Whats your take home after Tax?
> 
> Sorry if my questions are too personal


Think it was like 31%. I don't have a state tax
It was all variations of federal tax

bro 50,OoO


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## slippinjimmy

FinancialComplicaton said:


> To justify any luxury, I would say *it's such that in some amount of years, the impact of the purchase on your net worth is negligible ( <5%)*. This is not to say spend less than 5% of savings, because of variabilities in peoples savings to income ratio. In the case of a car, I would say 5 years as presumably this is the life that you would keep a luxury car. So you want to make sure that owning the car for 5 years doesn't drastically negatively affect your net worth in 5 years. Additionally, this conservatively assumes no salvage value though in reality you might be able to get some money back after selling your car after 5 years.
> 
> What we're trying to calculate is "*W*", which is percent of excess savings after needs that can be spent on superfluous things like luxury cars or watches. The main lever that affects this is income to savings ratio, some people early on their life have more income relative to savings while those further along in their careers will likely have it the other way around. For example, if your income was 100k a year but you only had 10k of excess savings after emergency fund and retirement, you could probably justify spending 100% of that 10k. On the other hand, if your net worth was 100m and your income was only 50k, spending even 10% of your savings could be quite detrimental. Obviously that 10% means 10m... but those are extreme examples. Hopefully the below calculation takes into account the nuance:
> 
> I used this formula to calculate how much I could spend on watches but I think it could be repurposed for any luxury spending.
> 
> I = Interest rate on investments. (Example 7%)
> 
> P = Percent of your Excess cash savings that your annual income savings represent. I.e. If your excess cash savings is 100,000 and you save 20,000 a year after all your expenses, your P = 0.2
> 
> T = Time horizon. (Let's say 10 years)
> 
> W = Percent of your Excess cash savings spent on marginal luxury. (Marginal Luxury is the difference in value from what you need and what you want. i.e. if you need a 20k car to commute to work. If yo ucalculate W to be 10%, and your excess cash savings is 200k, you can justify 10%*200k+20k = a 40k car).
> 
> Essentially, you take the money you would have in 10 years if you didn't buy the watch and compare it to the money you would have in 10 years if you did buy the watch, and you decide if the difference is upsetting.
> 
> A formula is excel is this:
> 
> % poorer you would be after T years after spending W% of your savings on a watch=(FV(R,T,-P)+(1-W)*(1+I)^(T))/(FV(R,T,-P)+(1)*(1+I)^(T))-1
> 
> (FV is an excel formula that calculates future value of payments)
> 
> Anyway, the guiding principle is that for a luxury splurge, your finances are not materially affected. (I reiterate luxury so separate the necessity component from the luxury component. For a watch, i considered it a 100% luxury since the necessity component of telling time essentially free on other devices.)


Interesting to see how this formula works in current conditions. I would have disagreed with this even in 2018, having dealt with the real estate crisis in 2007. Any formula for luxury spending based solely on income, which this formula seems to, is variable and unreliable at best. To each their own of course, my luxury spending decisions comes from what I learned in 2007 and what I know in 2020. Income is never guaranteed, debt kills, cash is king.


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## RyCheDay

If you have to ask then you can’t afford it 


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## Maverixk

delco714 said:


> Think it was like 31%. I don't have a state tax
> It was all variations of federal tax
> 
> bro 50,OoO


Hahahaha oh man,
Something I never really understood about the states I Guess. 
They pay so "high" but end up the take home is only reasonable.

Any way of using Accountants to help find ways to do tax saving ? 
I'm not saying go to panama 
But perhaps investments or property where you can Claim mortgage repayments as investments ?

Sent from my iPhone using Tapatalk


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## Atom_99

Check out bring a trailer my dude, nice cars going for okay prices with lot s of feedback from guys as obsessed with cars as we are about watches here.


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## olikatz

if you have to ask...


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## mikemark

Depends on how you buy it. If you buy new or used is a big difference.


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## highend

This is a very funny thread TBH. 
Is there supposed to be a worth? If you can afford it and sure to settle bills for the next 6 months comfortably, then you're ready for the Ferrari.


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## delco714

Maverixk said:


> Hahahaha oh man,
> Something I never really understood about the states I Guess.
> They pay so "high" but end up the take home is only reasonable.
> 
> Any way of using Accountants to help find ways to do tax saving ?
> I'm not saying go to panama
> But perhaps investments or property where you can Claim mortgage repayments as investments ?
> 
> Sent from my iPhone using Tapatalk


Not really.. but then again that's building wealth vs take home as well

bro 50,OoO


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## adam_svt

all depends on how much it costs


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## SolarPower

One Ferrari before the purchase and zero after :-D


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## marcusp23

diegohwang said:


> what's a good net worth to justify buying a ferrari or any luxury sports car? should it not be more than 5% my net worth if we think of it in percentages?
> 
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Sent from my iPhone using Tapatalk


5% of net worth doesn't seem unreasonable. But you gotta buy that car with cash, and gotta have a few other cars too because that's not a daily driver - that's a special occasion car. You can't put too many miles on that beauty


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## Cincy2

I've owned a couple and although they were fun, you will likely tire of it and sell. Be prepared for the savage depreciation. You are paying dearly for the privilege of driving it during your stewardship. My advice is buy used. Three to five years is about the point where the major depreciation has occurred. There are many nice examples with low mileage cars out there. Pre 2010 cars will have maintenance requirements that can be pricey. Read the forums specific to this brand and learn all you can before jumping. 

Back to your original question. I don't know how old you are but presuming you have uninvested discretionary income, take stock of your assets, your savings rate and how long you want to work before retirement. No calculation of net work will help you in deciding if you can "afford" a Ferrari. If you have saved well and you have money to spend on frivolous items like super cars, do so. Life is short. If you have neglected your long term financial planning, get that in order first. The Ferraris will still be there. Alternate Suggestion: I was a crazy gear head for many years of taking losses buying and selling Ferrari's and Lambo's. After I drove a Tesla Model S Performance, I sold all of them. If you need the experience of Ferrari ownership, nothing else will do. If you crave straight line acceleration with the whisper quiet whine only an electric car will provide, try an S. They put almost every other car under $1,000,000 to shame. The extra money you save will buy you a better retirement some day. Tesla's have no snob appeal but if you have no need for adulation from the masses, you get a better experience from this brand. Whatever you choose to do, good luck!

Cincy


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## SolarPower

Depends on a model. Take a look at this one









275 and 330 GTS went from 130K to 1.6M+

Having said that I voted with my wallet to go Porsche. My car on the left.









And if we are talking Tesla I'd rather go Model 3 performance with 0 to 60 comparable to my TTS. However, real life driving dynamics and repeated performance runs and stops are lacking. Perhaps Taycan Turbo S is a better choice here.


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## GrouchoM

Buying a Ferrari or a 911 turbo to go 0-60 is like buying a Rolex SeaDweller to wade in 2 feet of water.


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## dfwcowboy

I have two homes, four vehicles, and one airplane all paid for and 7 figures invested. I have a high income and owe nothing to anyone. I could certainly buy a 6 figure auto if I wanted one, but it just not something I care much about. I paid $32K for a Camaro with a manual transmission that is a joy to drive and already outperforms at least 95% of the vehicles on the road and is already well capable of seriously increasing my risk should I choose to drive it like a whole ass. So spending several times more in initial cost plus maintenance to get marginally better performance just seems like a case of diminishing returns to me. Especially when none of them are going to be nearly as much fun as even a low powered airplane. 

That being said I just don’t have those priorities, but I can certainly see why someone else might. If that is their priority I don’t think it’s as simple as determining an income or net worth. It’s more a matter of what you’re willing to live without. Make no mistake it’s always a matter of sacrifice regardless of your income or net worth. Unless you get extremely lucky and find a car that is worth more than you have into it, a vehicle will always have liability attached. Furthermore I just would never look at a car costing 6 figures as a daily driver so I can’t even look at it as serving my transportation needs although for some it might. 

So it’s really more of a matter of figuring out how much such a thing will cost initially and in maintenance and deciding what you are willing to sacrifice to make it happen. Money is made to be spent and we all only get so many trips around the sun. You might as well enjoy the ride because you only get one ticket.


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## adazine

A better choice over Ferrari


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## SolarPower

dfwcowboy said:


> I have two homes, four vehicles, and one airplane all paid for and 7 figures invested. I have a high income and owe nothing to anyone. I could certainly buy a 6 figure auto if I wanted one, but it just not something I care much about. I paid $32K for a Camaro with a manual transmission that is a joy to drive and already outperforms at least 95% of the vehicles on the road and is already well capable of seriously increasing my risk should I choose to drive it like a whole ass. So spending several times more in initial cost plus maintenance to get marginally better performance just seems like a case of diminishing returns to me. Especially when none of them are going to be nearly as much fun as even a low powered airplane.
> 
> That being said I just don't have those priorities, but I can certainly see why someone else might. If that is their priority I don't think it's as simple as determining an income or net worth. It's more a matter of what you're willing to live without. Make no mistake it's always a matter of sacrifice regardless of your income or net worth. Unless you get extremely lucky and find a car that is worth more than you have into it, a vehicle will always have liability attached. Furthermore I just would never look at a car costing 6 figures as a daily driver so I can't even look at it as serving my transportation needs although for some it might.
> 
> So it's really more of a matter of figuring out how much such a thing will cost initially and in maintenance and deciding what you are willing to sacrifice to make it happen. Money is made to be spent and we all only get so many trips around the sun. You might as well enjoy the ride because you only get one ticket.


Agreed on some points, disagreed on others, but this sums it up well: "That being said I just don't have those priorities, but I can certainly see why someone else might. If that is their priority I don't think it's as simple as determining an income or net worth. It's more a matter of what you're willing to live without........Money is made to be spent and we all only get so many trips around the sun. You might as well enjoy the ride because you only get one ticket."


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## SolarPower

GrouchoM said:


> Buying a Ferrari or a 911 turbo to go 0-60 is like buying a Rolex SeaDweller to wade in 2 feet of water.


Almost  In reality you can (unlike with Seadweller in your example) use the full power spec'd going 0-60 as fast as the car can every time. Besides buying a car (any car that is) is more about driving dynamics than 0-60 time. If you never driven one of those, perhaps you may treat yourself with giving it a try.


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## JD10

If you can buy it 3 times, you can afford it. 


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## lvt

I actually can afford a nice 1:18 die-cast Ferrari.


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## 5.39×10^−44 s

I don't think this is a stupid question. But the answer isn't simple.

Like any luxury good, it depends on your discretionary income. Typically, a 5-year auto loan is expecting your car to be worth about half your post-tax income. That means you're going to be spending around 20% of your month's salary on your car note. Obviously that notion depends on your position. If you're doing that but living paycheck to paycheck and not saving any money, you should probably decrease it to 10% or maybe even just buy some cheap car that runs well with cash and focus on more important things like a mortgage. Likewise, if you're making $10M/yr, you can decide to live in a $1M house and drop $8M a year on cars in cash, or just have a nice $200K car and call it a day. I know several people who make a few million per year and drive $40k cars because that's just not their thing, and they live 5min from work. But the wife does like to spend $40k/yr on luxury clothes/purses/shoes. I definitely would NOT recommend buying a home priced car unless you already have a home, if not even a second property to lease out if you're trying to be responsible. I also know people that make $100k/yr and spend like 35% of their income on a car, they aren't hurting for cash, but it's not the best idea, especially when it's holding them back from getting a home. The same concept applies to engagement rings, don't worry about X-month of salary, spend based on your discretionary income and whether or not other major priorities are handled, such as savings for mortgage downpayment or emergency fund.


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## SolarPower

5.39×10^−44 s said:


> ...don't worry about X-month of salary, spend based on your discretionary income and whether or not *your higher priorities *are handled


I agree to that with little edit I did in bold 

BTW what is this little time in your avatar about?


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## GrouchoM

SolarPower said:


> I agree to that with little edit I did in bold
> 
> BTW what is this little time in your avatar about?


Planck time





Planck units - Wikipedia







en.wikipedia.org


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## SolarPower

In 1899, Max Planck suggested that there existed some fundamental natural units for length, mass, time and energy.[7][8] These he derived using dimensional analysis, using only the Newton gravitational constant, the speed of light and the "unit of action", which later became the Planck constant. The natural units he further derived became known as the "Planck length", the "Planck mass", the "Planck time" and the "Planck energy".

Thanks. I should've known


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## Wound Up

I have a 2017 NSX and don't often get to push it.

I do enjoy owning the car, however much driving I get to do (12,000 ish miles in 3 3/4 years).

Here's some reality provided to me from my local Ferrari dealer (a Huge one N of


SolarPower said:


> Almost  In reality you can (unlike with Seadweller in your example) use the full power spec'd going 0-60 as fast as the car can every time. Besides buying a car (any car that is) is more about driving dynamics than 0-60 time. If you never driven one of those, perhaps you may treat yourself with giving it a try.


Chicago).

Most of their clients put about 1000 miles a year on their car, they are busy folks and don't have the time to go for long rides in it (I was shocked to hear that one).

Most of the drives are point A to point A. Get the gar out of the garage, take your family member for a ride, don't park anywhere, head back home. Sometimes stop for gas.

I am conservative so I would guide to cap the car cost at 3% of your net assets. So it you order a nice new Roma for $275K, you should have $9,166,666 in net assets. My approach has not consideration for how liquid you are.

In reality, many car junkies buy toys that sum to 10-20% of their net assets.


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## SolarPower

Very nice! NSX is definitely a car meant to be driven.


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## brianinCA

A lot of factors in addition to net worth to consider. Age, responsibilities, income, etc. I think 5% is a bit conservative though.


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## Nm56

Most of the cars I have, I just enjoy owning them and only ride them once in a while.


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## flynnstone

If you can buy it in cash without it impacting your lifestyle, why not?


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