Is this assuming that the person that paid $140k for a car in 1988 bought it INSTEAD of a house or investing in the stock market? Because the odds on that aren't good, I'm betting that CEO, investment banker, hedge fund manager, etc. if they're still alive is doing just fine.
Even as an opportunity cost lesson are we thinking the person bought it for $140k and kept it till it was sold for $8k? Or did they lease it and write it off as a business expense, or did they put down $40k, finance $100k, drove it for 3 years and sold it for $110k? There are a bunch of scenarios we could come up with but the reality probably isn't them paying cash for it and keeping it long term.
The lesson isn't nuanced enough, not that I disagree with the intent.
I agree with this post. Spending the equivalent of a median Sydney house ($1.1 million) is a lot of money, but that's in hindsight with 31 years of investment outcomes at your disposal. You could run the comparison any number of ways. If you spent $10,000 on a car a few years ago instead of putting it into Bitcoin, the opportunity cost would be the same; does that mean it's fair to say you lost out on becoming a millionaire?
Private school fees in Australia commonly run to $30,000+ per year, but I don't see many people doing an opportunity cost analysis on that.
A few years ago I bought a car for over $100k. It's purely a weekend toy. I can write a large chunk of the maintenance costs and depreciation off as a business expense, due to a tax loophole. This includes the costs of preparing for track days, lol. After tax, it probably costs me $10k a year to run, including depreciation, fuel, maintenance, and track expenses/consumables. Is that a lot of money? Yes. Do I get a lot out of having a wonderful fun toy? Yes.
Do I think it's an incredibly bad financial choice? No, it's probably 1/3 of what other families pay in school fees, or church donations, or whatever their financial sin of choice is.
Am I still gonna be able to retire at my target age despite budgeting $20k a year (ie double my current figure) in "car expenses"? Yes. As a car guy, it's worth it to me and I like my toys.
I suppose if you're not a car nut and you're buying an entry-level German banger just for "status", then yes, it's a poor investment. But you could say the same for many many lifestyle expenses, all of which are bad investments.
