Author Topic: Bizarro New Car World  (Read 23171 times)

danny9m

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Bizarro New Car World
« on: October 21, 2015, 08:42:29 AM »
Jim Creamer to Sergio, who runs Chrysler,
I went looking for a jeep for my daughter the other day, are you really getting 55,000 for these.
Sergio – Yes, However, this won’t last forever, there will be another downturn.  He is trying to merge with another car maker before the downturn hits.

I went to a Chevrolet dealer looked at an Impala, it was 35K.  This is nothing a Chevy Tahoe had a sticker of 65K
I went into a deep sleep and woke up in a bizarro world where Chevy Tahoe’s sell for 65K. 

Is this the same Chevy Tahoe my brother in law owned that was a piece of junk?  Hopefully, the newer models are better than the model he had.  I believe his manifold had a crack in at with 70K miles and it road like a Sherman tank. 

It all looks good until it doesn’t, I remember back in 2006 when the housing market seemed to defy reality, than it didn’t.  I don’t think there is an endless run way of people who can afford to pay 50K plus for a Jeep, Tahoe or pickup.  Just as the home builders got greedy the car makers are digging their own graves now, they will be there in due time.

 

coppertop

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Re: Bizarro New Car World
« Reply #1 on: October 21, 2015, 08:50:57 AM »
From what I can see, most people don't really care about the total cost of the vehicles they buy - they go into the dealership and say 'This is what I can pay per month,' and buy their vehicles accordingly. 

My first condo in the late 1970s cost about $28,000 - so vehicle prices $50,000 and up are shocking to me.  Myself, I would never buy a new car again.  I purchased a brand-new Honda Civic in 2010 for $15,500.  The next winter, a deer came running out of the woods and landed on my hood.  The extensive damage was repaired, but my car will never be the same again.  I'd rather spend less and buy a used vehicle (I always pay cash), so that if the unexpected happens, it will not sting so much to see my crumpled-up vehicle disabled on the side of the road.

fiveoh

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Re: Bizarro New Car World
« Reply #2 on: October 21, 2015, 09:23:43 AM »
I agree.  SUVs(and trucks to a lesser extent)  seem to be significantly overpriced.  Yet, I look around the parking lot at my office and 70% are SUVs or trucks. 

ETwagon

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Re: Bizarro New Car World
« Reply #3 on: October 21, 2015, 09:34:22 AM »
From what I can see, most people don't really care about the total cost of the vehicles they buy - they go into the dealership and say 'This is what I can pay per month,' and buy their vehicles accordingly. 

Bingo!   I 've said many times take 10 people off the street with new car loans/payments and 9 if not all 10 could not tell you what they actually paid for the vehicle total at the end of their self inflicted sentence.

AZDude

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Re: Bizarro New Car World
« Reply #4 on: October 21, 2015, 09:51:19 AM »
Yep, plus people who save $0 each month have lots more to spend on ridiculous things. Just imagine how much money you could spend if you did not have a 401(k), IRA, or any savings. That $600 a month car payment wouldn't be so bad...

nereo

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Re: Bizarro New Car World
« Reply #5 on: October 21, 2015, 10:02:27 AM »
...can't find it right now, but a while ago I came across some graphs showing the real-adjusted median cost of passenger cars and pickup trucks over the last 50 years.  From the 1950s-1970s you could buy a pickup truck for less than half of what the typical passenger car sold for.  Since the 1980s pickups have become more expensive relative to passenger cars - in the 1990s the two crossed. 

Trucks have gotten more and more expensive, while passenger cars have actually decreased in real$.

KarefulKactus15

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Re: Bizarro New Car World
« Reply #6 on: October 21, 2015, 10:11:43 AM »
9 out of 10 people couldn't tell you what they paid.    The sad part is they signed "the truth in lending" or some form that showed exactly how much the total + interest would be and they didn't care.  . . . .     

Its nice to be in a mustachian state of mind so that we know better, but it kinda makes me sad to watch all these people screw themselves over so bad. 

Debts_of_Despair

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Re: Bizarro New Car World
« Reply #7 on: October 21, 2015, 10:14:30 AM »
Get the Tahoe buyer into a six or seven year loan and they don't care what the price is.

captainawesome

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Re: Bizarro New Car World
« Reply #8 on: October 21, 2015, 10:20:05 AM »
I think people tend not to hold onto cars that long based on the "this is what I pay per month" principal. I mean they may not be leasing the car, but I think for a lot of people leasing would be the way to go (outside of a mustachian mindset).  I've seen several people go through multiple cars in a two year period just to get newest and best model, so long as their payments don't change appreciably they accept this as the societal norm.

Hell, my wife used to think car payments were something "people always have and always will" until after we got married. And for the first time in her life, she owns a car outright.  Now she understands. But most people either never will out of resistence or just plain ignorance.

clarkfan1979

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Re: Bizarro New Car World
« Reply #9 on: October 21, 2015, 10:25:02 AM »
I have a friend that lives in a major city and hasn't really had a car for the last 15 years. He has a cargo van for house flips, but that it. He make about 130K at his corporate job and he makes another 50k doing 3-4 house flips a year. He works a lot.

He recently found himself in a luxury car dealership. He called me to tell me the prices and he was like, "Holy F*&K" Even he can't justify buy a 65K car and he is not very MMM.

Alex321

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Re: Bizarro New Car World
« Reply #10 on: October 21, 2015, 10:32:34 AM »
Low interest rates certainly play a role. That was a Washington Post article someone referenced above that did an excellent job looking at the long-term price trends of the F-150, still the most popular vehicle in America for over three decades now.

One caveat to keep in mind, however: with regular maintenance, you can expect a new car to last upwards of 15 years and 250,000 miles. So while the acquisition price is higher, I would argue that the overall lifecycle costs are lower. And that doesn't even account for improved safety, performance, and efficiency. The $60k Jeeps are a bit of a red herring to this discussion. Most aren't selling for that price, and not everyone who is buying them is too stupid to understand how much it actually costs. Many of those people do, legitimately, have a lot of money, and as much it will pain some people to hear this, many of them have healthy retirement accounts, too.

lackofstache

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Re: Bizarro New Car World
« Reply #11 on: October 21, 2015, 10:37:42 AM »
Get the Tahoe buyer into a six or seven year loan and they don't care what the price is.

At this point I think 84 months is the norm, with plenty of folks going w/ 96...

Alex321

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Re: Bizarro New Car World
« Reply #12 on: October 21, 2015, 11:03:36 AM »
At 1.9% or less, I would do the same thing if they offered it.

TheAnonOne

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Re: Bizarro New Car World
« Reply #13 on: October 21, 2015, 11:16:49 AM »
Get the Tahoe buyer into a six or seven year loan and they don't care what the price is.

At this point I think 84 months is the norm, with plenty of folks going w/ 96...

The interest rate has a lot to do with this.

The average sold car is around 30-33k not the posted 65k+

I own an expensive car for fun track days, but it isn't the financial suicide that it's made out to be. The rest of a persons life can be "MMM" worthy a bad habbit or two shouldn't effect FIRE time by more than 3-6 months and even at that, I plan on doing SOMETHING to generate income after fire, so most can FIRE sooner than they think.


RangerOne

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Re: Bizarro New Car World
« Reply #14 on: October 21, 2015, 11:36:36 AM »
I really think a lot of nice cars at this point are also just leased. I've also heard its hard to get a car loan for a $50k plus car. But almost anyone can lease... vehicle costs for a lease are pretty easy since you don't have the car long enough to need any kind of work or maintenance.

Works good I guess for people who are willing to shell out $300+ a month to drive not including gas and full coverage insurance.

If I were feeling stupid I could probably stop saving or paying loans and less a $500 a month car.

powersuitrecall

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Re: Bizarro New Car World
« Reply #15 on: October 21, 2015, 01:27:58 PM »
I've noticed that print advertising rarely states the actual cost of the vehicle.  It's all "$119 Weekly OCA!!!" or "1.9% Financing!!!".

The_Dude

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Re: Bizarro New Car World
« Reply #16 on: October 21, 2015, 01:43:05 PM »
...can't find it right now, but a while ago I came across some graphs showing the real-adjusted median cost of passenger cars and pickup trucks over the last 50 years.  From the 1950s-1970s you could buy a pickup truck for less than half of what the typical passenger car sold for.  Since the 1980s pickups have become more expensive relative to passenger cars - in the 1990s the two crossed. 

Trucks have gotten more and more expensive, while passenger cars have actually decreased in real$.

There are a variety of factors in play here but you can also thank protectionist policies that shielded the domestic automakers from direct foreign competition.  Aka the chicken tax: https://en.wikipedia.org/wiki/Chicken_tax

Toyota and Nissan have now gotten around this by making full size light trucks here in the US or at least part of it but I think the chicken tax played a key role in why passenger car pricing would of taken a different path than truck pricing.

jms493

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Re: Bizarro New Car World
« Reply #17 on: October 21, 2015, 01:55:23 PM »
Unless you have tons of money to blow, buying a new luxury car is a horrible idea financially.  I love Lexus...they are #1 on the list of reliability and maintenance costs.  You can bring those cars to a Toyota dealer and they can work on them cheaper than a Lexus dealer.

Buying them new is liking taking 10K kicks to the groin.  You can buy 2-3 year old IS, ES, GS models and save anywhere from 10-20K off the MSRP on a REALLY nice car only a few years old.  2013 ES with 25K miles on it...you can probably get in one for 25-28K.  Those cars have stickers of 45K+.

I love cars and they are a necessary evil in suburban areas this is one area where people make HUGE financial mistakes and never realize it.  I was one of them...:(
« Last Edit: October 21, 2015, 01:57:25 PM by jms493 »

jms493

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Re: Bizarro New Car World
« Reply #18 on: October 21, 2015, 02:01:55 PM »
it is mostly the leasing deals and financing deals...I mean if we couldn't finance a car they couldn't charge as much as they do.

Imagine Car articles with just the sticker prices.

29,999
39,999
49,999

people wouldn't even look at it.  Put $0 down and 0% interest...everyone looks.

ETwagon

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Re: Bizarro New Car World
« Reply #19 on: October 22, 2015, 05:36:46 PM »
At 1.9% or less, I would do the same thing if they offered it.

 You would still get to go through pure agonizing Hell... https://www.youtube.com/watch?v=hP1d7KSmgEg



DollarBill

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Re: Bizarro New Car World
« Reply #20 on: October 22, 2015, 06:39:43 PM »
This is so funny because two days ago I had the itch to look at the Jeeps, Trucks and Tahoe's...lol. I was dry heaving! The salesman said almost everyone that leaves with one is on a lease. At least when I was considering it I was thinking cash.


big_slacker

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Re: Bizarro New Car World
« Reply #21 on: October 24, 2015, 03:10:54 PM »
I don't even know that you can get a jeep to 60k? I though a fully loaded rubicon unlimited was like 50k. Regardless you're right, most sold aren't that. My jeep was under 25k and costs almost nothing to maintain. Granted you wouldn't want to drive it 50 miles round trip but we don't do that here right?

On the greater point, I live in spendyland and a lot of the SUVs and so on I know of are financed or leased and these folks do have 401k, houses and so on. For instance a friend of mine has a Jeep Grand Cherokee and Toyota Tundra in his driveway. otoh that truck will last for freakin ever, he only lives a few miles from work and he's set to retire at 55 with a paid for house anyway so....

Low interest rates certainly play a role. That was a Washington Post article someone referenced above that did an excellent job looking at the long-term price trends of the F-150, still the most popular vehicle in America for over three decades now.

One caveat to keep in mind, however: with regular maintenance, you can expect a new car to last upwards of 15 years and 250,000 miles. So while the acquisition price is higher, I would argue that the overall lifecycle costs are lower. And that doesn't even account for improved safety, performance, and efficiency. The $60k Jeeps are a bit of a red herring to this discussion. Most aren't selling for that price, and not everyone who is buying them is too stupid to understand how much it actually costs. Many of those people do, legitimately, have a lot of money, and as much it will pain some people to hear this, many of them have healthy retirement accounts, too.

lbmustache

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Re: Bizarro New Car World
« Reply #22 on: October 24, 2015, 10:51:53 PM »
I've noticed that print advertising rarely states the actual cost of the vehicle.  It's all "$119 Weekly OCA!!!" or "1.9% Financing!!!".

Dealers around here advertise "PER DAY." Like, "Get a brand new Kia Optima for only $5 a day, that's less than the cost of lunch." Crazy.

My neighbor had a Nissan Altima and just bought a Cadillac SUV, and told me that her payments went up by "only $80" so it was clearly a "better deal." Right...

use2betrix

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Re: Bizarro New Car World
« Reply #23 on: October 25, 2015, 08:28:42 AM »
I know it's hard for most people in this fathom, but not everyone plans on having a retirement at 40. Some people enjoy working, and their jobs.

This obviously escapes everyone here in virtually every thread.

Here's some simple math: if a couple each max out their 401k from 25-65, they will have $10 mil by the time they turn 65. And that's if they spend every single other dollar they make. For two spouses who each make over 100k, this isn't too difficult. My brother and his wife are both very high income earners and they both love their jobs and are career driven. They work regular hrs and several days a week from home.

But then again, this forum also assumes every person with a $60k vehicle must live paycheck to paycheck.

I'll use myself as an example for a moment. I drive a $60k truck. I bought it before I every dreamed of FIRE. Yes, my payment is high, and I'm 27, but let's see what I've done this year in addition to making my truck payments: maxed out 401k, maxed out Roth IRA for myself and for what will be my spouse before the end of the year, paid off remaining 12k in student loans, paying for 10k wedding, put an additional 10k into VTSAX, AND I have enough cash saved to pay off my remaining 40k truck balance if I wanted to (but I'd rather invest that money)

I should also mention I live in a 5th wheel full time and move several times a year so need the truck to pull my 5th wheel. Maybe since I live in a 300sq ft 5th wheel, I should be calling everyone here that lives in anything bigger unmustachian, because it truly is more than you "need" to survive?

nereo

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Re: Bizarro New Car World
« Reply #24 on: October 26, 2015, 06:37:04 AM »
I know it's hard for most people in this fathom, but not everyone plans on having a retirement at 40. Some people enjoy working, and their jobs.

This obviously escapes everyone here in virtually every thread.

Here's some simple math: if a couple each max out their 401k from 25-65, they will have $10 mil by the time they turn 65. And that's if they spend every single other dollar they make. For two spouses who each make over 100k, this isn't too difficult. My brother and his wife are both very high income earners and they both love their jobs and are career driven. They work regular hrs and several days a week from home.

But then again, this forum also assumes every person with a $60k vehicle must live paycheck to paycheck.

I'll use myself as an example for a moment. I drive a $60k truck. I bought it before I every dreamed of FIRE. Yes, my payment is high, and I'm 27, but let's see what I've done this year in addition to making my truck payments: maxed out 401k, maxed out Roth IRA for myself and for what will be my spouse before the end of the year, paid off remaining 12k in student loans, paying for 10k wedding, put an additional 10k into VTSAX, AND I have enough cash saved to pay off my remaining 40k truck balance if I wanted to (but I'd rather invest that money)

I should also mention I live in a 5th wheel full time and move several times a year so need the truck to pull my 5th wheel. Maybe since I live in a 300sq ft 5th wheel, I should be calling everyone here that lives in anything bigger unmustachian, because it truly is more than you "need" to survive?

Not quite sure I see the same from this forum.  There are lots of SWAMIs here, and plenty of advanced mustachians spend far more than what is necessary on homes, cars and vacations than is strictly necessary.  The focus, IMO is always on whether a person can afford the expenditures and whether it adds value to their life.  If you can afford to max out your retirement accounts while paying for a $60k truck the you genuinely enjoy, great!  The only major question I'd have is whether you get a substantial increase in happiness driving a $60k truck than a $10k version that will do essentially hte same thing.  To each their own though...

Cork

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Re: Bizarro New Car World
« Reply #25 on: October 26, 2015, 07:39:58 AM »
What blows my mind the most are the luxury versions of the already cost-inflated trucks/SUVS.

It's like seeing a unicorn made out of poor decisions whenever one of these drives by:
Lincoln blackwood luxury truck
$56,000 MSRP (no longer sold)

Or one of these:
Toyota Landcruiser
$83,000 MSRP (competes with the Range Rover)

I wish the beloved landcruiser didn't turn into a luxury grocery cart :( 

rtrnow

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Re: Bizarro New Car World
« Reply #26 on: October 26, 2015, 08:03:00 AM »
I know it's hard for most people in this fathom, but not everyone plans on having a retirement at 40. Some people enjoy working, and their jobs.

This obviously escapes everyone here in virtually every thread.

Here's some simple math: if a couple each max out their 401k from 25-65, they will have $10 mil by the time they turn 65. And that's if they spend every single other dollar they make. For two spouses who each make over 100k, this isn't too difficult. My brother and his wife are both very high income earners and they both love their jobs and are career driven. They work regular hrs and several days a week from home.

But then again, this forum also assumes every person with a $60k vehicle must live paycheck to paycheck.

I'll use myself as an example for a moment. I drive a $60k truck. I bought it before I every dreamed of FIRE. Yes, my payment is high, and I'm 27, but let's see what I've done this year in addition to making my truck payments: maxed out 401k, maxed out Roth IRA for myself and for what will be my spouse before the end of the year, paid off remaining 12k in student loans, paying for 10k wedding, put an additional 10k into VTSAX, AND I have enough cash saved to pay off my remaining 40k truck balance if I wanted to (but I'd rather invest that money)

I should also mention I live in a 5th wheel full time and move several times a year so need the truck to pull my 5th wheel. Maybe since I live in a 300sq ft 5th wheel, I should be calling everyone here that lives in anything bigger unmustachian, because it truly is more than you "need" to survive?

This site and forums used to be (IMO) a place where people not only focused on spending less to FIRE but also looked at what really brings happiness. It has turned into people patting each other on the back for saving more than average even while they're consumer whores. I was drawn here like many of the long time members bc there was the idea of a more simple/environmental friendly life. I really don't care if you can afford your 60K truck. I think it's a selfish purchase that virtually no one has a need to own. BTW, there are a lot of reasons to strive for early FI regardless of whether you plan to work until later in life or not. You may change your mind, get hurt, fired, etc, etc. In general not just focused at this poster, but it just shows what has become of a site I once found useful. Popularity ruins most things unfortunately.

BTDretire

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Re: Bizarro New Car World
« Reply #27 on: October 26, 2015, 08:25:34 AM »
Unless you have tons of money to blow, buying a new luxury car is a horrible idea financially.  I love Lexus...they are #1 on the list of reliability and maintenance costs.  You can bring those cars to a Toyota dealer and they can work on them cheaper than a Lexus dealer.

Buying them new is liking taking 10K kicks to the groin.  You can buy 2-3 year old IS, ES, GS models and save anywhere from 10-20K off the MSRP on a REALLY nice car only a few years old.  2013 ES with 25K miles on it...you can probably get in one for 25-28K.

 97 T-100 paid $11,000 in 2000, 97 Lexus paid $4,000 in 2003, and a 2001 Avalon paid $8000 2010.
The Lexus has 169K miles, T-100 has 95k miles, and the Avalon has 84k miles.
 My son now drives the Lexus it may not make it another 10 years, but I'm sure the T-100 and the Avalon will.
Never bought a new car and expect we never will.
 Just to brag, we really stepped up last year and bought a new* van for the business, it is a 2007 GMC!
Only 8 years old. Living in Luxury!  :-)

* new to us.
 

2Birds1Stone

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Re: Bizarro New Car World
« Reply #28 on: October 26, 2015, 09:07:57 AM »
I take pride in driving a car that is worth less than 2 weeks of income =)

When it's time to replace it I plan on getting something much newer and way more fun to drive.

Life is not a balance sheet, spend according to your values.

LiveLean

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Re: Bizarro New Car World
« Reply #29 on: October 26, 2015, 09:23:00 AM »
I really think a lot of nice cars at this point are also just leased. I've also heard its hard to get a car loan for a $50k plus car. But almost anyone can lease... vehicle costs for a lease are pretty easy since you don't have the car long enough to need any kind of work or maintenance.

Works good I guess for people who are willing to shell out $300+ a month to drive not including gas and full coverage insurance.


We've had the same next-door neighbors for 16 years. The two of them have had some combination of Lexus, BMW, or Audi on 3-year leases. Even at $500 per car a month, which I'm guessing is conservative -- I've never leased -- that comes to $192,000 over 16 years.

We buy boring American cars, admittedly new, but drive them for 100K miles-plus. We've spent $82,000 over the same 16-year period and we don't project to need replacement vehicles until 2017 and 2018 at the earliest. That 82K isn't Mustachian - even over 16 years -- and yes we probably have paid more in repairs and tires, but that's still a nice chunk of change.

gimp

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Re: Bizarro New Car World
« Reply #30 on: October 26, 2015, 03:48:57 PM »
Truck-based SUVs are ridiculously expensive, and often not terribly reliable. For the same money, you can buy serious muscle if that's your thing, or serious style / luxury if that's your thing.

regulator

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Re: Bizarro New Car World
« Reply #31 on: October 26, 2015, 04:49:07 PM »
Life is not a balance sheet, spend according to your values.

A really good summation.

DW took the camper to be winterized and we got the bad news that the roof is finally giving up the ghost and needs to be replaced to the tune of $3 to 4k.  *Gulp*  That was definitely not in the budget.  OTOH, to buy what we have would be 8 or 9k for a mystery that might be someone else's problem and we get such joy out of our little home away from home that not having one is not something we are willing to entertain.

use2betrix

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Re: Bizarro New Car World
« Reply #32 on: October 26, 2015, 05:56:36 PM »
I know it's hard for most people in this fathom, but not everyone plans on having a retirement at 40. Some people enjoy working, and their jobs.

This obviously escapes everyone here in virtually every thread.

Here's some simple math: if a couple each max out their 401k from 25-65, they will have $10 mil by the time they turn 65. And that's if they spend every single other dollar they make. For two spouses who each make over 100k, this isn't too difficult. My brother and his wife are both very high income earners and they both love their jobs and are career driven. They work regular hrs and several days a week from home.

But then again, this forum also assumes every person with a $60k vehicle must live paycheck to paycheck.

I'll use myself as an example for a moment. I drive a $60k truck. I bought it before I every dreamed of FIRE. Yes, my payment is high, and I'm 27, but let's see what I've done this year in addition to making my truck payments: maxed out 401k, maxed out Roth IRA for myself and for what will be my spouse before the end of the year, paid off remaining 12k in student loans, paying for 10k wedding, put an additional 10k into VTSAX, AND I have enough cash saved to pay off my remaining 40k truck balance if I wanted to (but I'd rather invest that money)

I should also mention I live in a 5th wheel full time and move several times a year so need the truck to pull my 5th wheel. Maybe since I live in a 300sq ft 5th wheel, I should be calling everyone here that lives in anything bigger unmustachian, because it truly is more than you "need" to survive?

This site and forums used to be (IMO) a place where people not only focused on spending less to FIRE but also looked at what really brings happiness. It has turned into people patting each other on the back for saving more than average even while they're consumer whores. I was drawn here like many of the long time members bc there was the idea of a more simple/environmental friendly life. I really don't care if you can afford your 60K truck. I think it's a selfish purchase that virtually no one has a need to own. BTW, there are a lot of reasons to strive for early FI regardless of whether you plan to work until later in life or not. You may change your mind, get hurt, fired, etc, etc. In general not just focused at this poster, but it just shows what has become of a site I once found useful. Popularity ruins most things unfortunately.

My truck is probably the most environmentally friendly vehicle capable of towing 15,000 lbs you can buy. The new emissions regulations are far better than the older diesels. Plus, diesel trucks have the highest resale of nearly any vehicle, so getting one a couple years old with 75k miles for 20% less wasn't too appealing, especially if I keep my truck for 200k.

Also, I live full time in a 40' trailer. I'd call that pretty simple. I certainly live in a smaller place than probably 99% of this forum, thus having less belongings.

whydavid

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Re: Bizarro New Car World
« Reply #33 on: October 26, 2015, 11:42:03 PM »
I know it's hard for most people in this fathom, but not everyone plans on having a retirement at 40. Some people enjoy working, and their jobs.

This obviously escapes everyone here in virtually every thread.

Here's some simple math: if a couple each max out their 401k from 25-65, they will have $10 mil by the time they turn 65. And that's if they spend every single other dollar they make. For two spouses who each make over 100k, this isn't too difficult. My brother and his wife are both very high income earners and they both love their jobs and are career driven. They work regular hrs and several days a week from home.

But then again, this forum also assumes every person with a $60k vehicle must live paycheck to paycheck.

I'll use myself as an example for a moment. I drive a $60k truck. I bought it before I every dreamed of FIRE. Yes, my payment is high, and I'm 27, but let's see what I've done this year in addition to making my truck payments: maxed out 401k, maxed out Roth IRA for myself and for what will be my spouse before the end of the year, paid off remaining 12k in student loans, paying for 10k wedding, put an additional 10k into VTSAX, AND I have enough cash saved to pay off my remaining 40k truck balance if I wanted to (but I'd rather invest that money)

I should also mention I live in a 5th wheel full time and move several times a year so need the truck to pull my 5th wheel. Maybe since I live in a 300sq ft 5th wheel, I should be calling everyone here that lives in anything bigger unmustachian, because it truly is more than you "need" to survive?

So we should lay off our mocking of excess consumerism because a very small percentage of the population can afford a $60k vehicle while still saving enough for retirement?

I think you've taken this all too personally.  Just because you've done the math for yourself, taking into account your own values and financial situation, does not mean the outrageous price of vehicles and the typical folks who buy them aren't deserving of a little mockery.

Have you actually read the MMM blog posts?  You won't find a lot of "well, probably shouldn't poke fun at anyone regardless of how stupid their decisions look, because they might belong to an ultra-small fraternity of folks whose personal situation justifies that decision" in the blog, so I'm not sure why you are looking for it in the forums.  If owning an expensive truck enables you to live a scaled-down life in other ways, and you've done the math and are willing to trade the time-to-FI for the truck, then good for you.  Do you honestly think more than 0.01% of the 60k-vehicle-buying population is in the same boat? 

danny9m

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Re: Bizarro New Car World
« Reply #34 on: October 28, 2015, 07:29:56 AM »
At 1.9% or less, I would do the same thing if they offered it.

 You would still get to go through pure agonizing Hell... https://www.youtube.com/watch?v=hP1d7KSmgEg

Just blown away by this video and started to watch related videos.  Folks were right in a sense in that these guys can make a 60,000 price tag seem reasonable!!!
 

daschtick

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Re: Bizarro New Car World
« Reply #35 on: October 28, 2015, 09:10:24 AM »
I know it's hard for most people in this fathom, but not everyone plans on having a retirement at 40. Some people enjoy working, and their jobs.

I'll use myself as an example for a moment. I drive a $60k truck. I bought it before I every dreamed of FIRE. Yes, my payment is high, and I'm 27

You're 27, you've worked maybe 10 years total, perhaps 5 years in your career?  You are still bright-eyed and bushy-tailed!  Heck, you are not even married yet, and how about some kids for good measure. Talk to me in another 20-25 years about how much you still like working everyday.  Trust me - It gets old.

There, I said it.  :-)

coppertop

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Re: Bizarro New Car World
« Reply #36 on: October 28, 2015, 10:13:14 AM »
I can't figure out why folks like Trix-r are here if they are not interested in FIRE.  I thought that's what this forum was all about.

use2betrix

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Re: Bizarro New Car World
« Reply #37 on: October 28, 2015, 10:35:48 AM »
I know it's hard for most people in this fathom, but not everyone plans on having a retirement at 40. Some people enjoy working, and their jobs.

I'll use myself as an example for a moment. I drive a $60k truck. I bought it before I every dreamed of FIRE. Yes, my payment is high, and I'm 27

You're 27, you've worked maybe 10 years total, perhaps 5 years in your career?  You are still bright-eyed and bushy-tailed!  Heck, you are not even married yet, and how about some kids for good measure. Talk to me in another 20-25 years about how much you still like working everyday.  Trust me - It gets old.

There, I said it.  :-)

ive worked for 14 years and in my career for 7.

I've saved/invested/paid off student loans to the extent of around 60k-70k just this year. So because I drive a nice truck I can't be on the path to an early environment?

So who's on a better path to environment, someone who spends 50k a year and makes 150k, or someone who spends 25k a year and makes 50k?

Many people mention increasing income as opposed to extreme frugality. I happen to be one of them. It doesn't mean I can't still benefit from this site in some ways. 

use2betrix

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Re: Bizarro New Car World
« Reply #38 on: October 28, 2015, 10:40:47 AM »
I can't figure out why folks like Trix-r are here if they are not interested in FIRE.  I thought that's what this forum was all about.

At what point have I EVER said that?

I can't figure out why people like coppertop are here if they are unable to read constructively.

I'll probably be most the way FIRED by my mid 30's, then plan on doing contract work a few months a year. Sure I could fully FIRE in 5 years if I wanted to live extremely frugal forever. Just today however I was looking at season ski passes to different resorts, as that'd be something I'd like to do in fire, and that'd be around $2000-$3000 a year for a family. I have other similar hobbies, and they cost money. For all those that want to garden and read library books and eat beans and rice, more power to them, however I have other hobbies and plans which I'll sacrifice a few more years of work for.
« Last Edit: October 28, 2015, 12:41:34 PM by Trixr606 »

Digital Dogma

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Re: Bizarro New Car World
« Reply #39 on: October 28, 2015, 12:12:00 PM »

So we should lay off our mocking of excess consumerism because a very small percentage of the population can afford a $60k vehicle while still saving enough for retirement?


No, its sucka behavior, giving money to a vehicle manufacturer that you could've otherwise put towards retiring earlier is stealing from your future self, the truck in question is most definitely not worth 60k anymore.

The equation becomes a depreciating liability vs an opportunity lost to acquire more appreciating assets (VTSMX, IRA, etc).

But without this sort of wasteful spending my index funds wouldn't be doing as well as they are today, so thank you 60k vehicle buyers, you're just the kind of sucka that we need to retire off of comfortably. And maybe one day someone else will thank you for purchasing your used vehicle that you ate most of the depreciation on.
« Last Edit: October 28, 2015, 12:15:30 PM by Digital Dogma »

needmyfi

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Re: Bizarro New Car World
« Reply #40 on: October 28, 2015, 01:41:37 PM »
Ah trixr606.  Where to start.
Some back-of envelope math.  If you invested $60k  today it would likely be close to $120 k in 10 years, while in 10 years your truck will be just another 10 year old truck -mostly depreciated.  So if you drive 300 days a year for 10 years you will have paid $40 a day to drive the truck.  Add the extra insurance cost of a new, very expensive vehicle and you are up to $50 of added value to your life every time you get into your truck. 

A new truck (which will only be new for a while) doesn't sound like as much fun as 20 years of ski passes for an entire family.  Or even driving a new truck for a year, vrs.  starting out with a one year old truck and two years of ski passes for the whole family. Or a whole extra year spent working to drive a new truck.  But hey, if that's what you are into.

ps -love the fruedian typos " So because I drive a nice truck I can't be on the path to an early environment?"






use2betrix

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Re: Bizarro New Car World
« Reply #41 on: October 28, 2015, 04:55:43 PM »
Ah trixr606.  Where to start.
Some back-of envelope math.  If you invested $60k  today it would likely be close to $120 k in 10 years, while in 10 years your truck will be just another 10 year old truck -mostly depreciated.  So if you drive 300 days a year for 10 years you will have paid $40 a day to drive the truck.  Add the extra insurance cost of a new, very expensive vehicle and you are up to $50 of added value to your life every time you get into your truck. 

A new truck (which will only be new for a while) doesn't sound like as much fun as 20 years of ski passes for an entire family.  Or even driving a new truck for a year, vrs.  starting out with a one year old truck and two years of ski passes for the whole family. Or a whole extra year spent working to drive a new truck.  But hey, if that's what you are into.

ps -love the fruedian typos " So because I drive a nice truck I can't be on the path to an early environment?"

Actually, your math is still wrong.

I would STILL need a truck to tow my 15,000 lbs. So the alternative to my truck would be getting a free truck so I could invest that? Please inform me how to go about that.

At best I could have gotten a used watered down truck with 50k miles for $35k. Any less than that and I'd be looking at significant miles, plus I'm not driving a Dodge, nor a ford older than 2011 due to major model failures prior, and the 7.3 ford is incapable of towing my trailer.

Not to mention, I drive 25k a year so anything with significant miles will shorten my truck life, thus costing more. I have moved 3 times in the last 18 months, each 1200+ miles, and I'm unable to tow another vehicle, nor use public transportation or bike due to my typical job site locations. Unless most of you would feel comfortable riding your bike on 10 mile stretches of 70mph 2 lane roads with minimal shoulder. No thanks, personally, and there aren't usually Rv parks any closer to the job site so often the commute is necessary.

use2betrix

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Re: Bizarro New Car World
« Reply #42 on: October 28, 2015, 04:57:41 PM »
With all these opinions, someone would think when I did a mini case study regarding alternatives to my truck, virtually NO ONE had any input as to what I could do differently to be significantly more beneficial. Everyone seems to have an opinion here, however.

needmyfi

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Re: Bizarro New Car World
« Reply #43 on: October 28, 2015, 06:04:16 PM »
Ah trixr606.  Where to start.
Some back-of envelope math.  If you invested $60k  today it would likely be close to $120 k in 10 years, while in 10 years your truck will be just another 10 year old truck -mostly depreciated.  So if you drive 300 days a year for 10 years you will have paid $40 a day to drive the truck.  Add the extra insurance cost of a new, very expensive vehicle and you are up to $50 of added value to your life every time you get into your truck. 

A new truck (which will only be new for a while) doesn't sound like as much fun as 20 years of ski passes for an entire family.  Or even driving a new truck for a year, vrs.  starting out with a one year old truck and two years of ski passes for the whole family. Or a whole extra year spent working to drive a new truck.  But hey, if that's what you are into.

ps -love the fruedian typos " So because I drive a nice truck I can't be on the path to an early environment?"

Actually, your math is still wrong.

I would STILL need a truck to tow my 15,000 lbs. So the alternative to my truck would be getting a free truck so I could invest that? Please inform me how to go about that.

At best I could have gotten a used watered down truck with 50k miles for $35k. Any less than that and I'd be looking at significant miles, plus I'm not driving a Dodge, nor a ford older than 2011 due to major model failures prior, and the 7.3 ford is incapable of towing my trailer.

Not to mention, I drive 25k a year so anything with significant miles will shorten my truck life, thus costing more. I have moved 3 times in the last 18 months, each 1200+ miles, and I'm unable to tow another vehicle, nor use public transportation or bike due to my typical job site locations. Unless most of you would feel comfortable riding your bike on 10 mile stretches of 70mph 2 lane roads with minimal shoulder. No thanks, personally, and there aren't usually Rv parks any closer to the job site so often the commute is necessary.

Hey I live out in a rural area and fully understand the need for a reliable vehicle. I also have a truck just to haul a camper so I feel the love on that too. I have no idea what trucks cost so I'll assume you are right .  So it looks like your options were a 35k truck with 50k miles or a brand new truck.  Assume both would last a total of of 200,000 miles.  Then assume both trucks will sell for about $5k when they have 200,000 miles aren't reliable enough for your purposes anymore.  With a new truck you pay 55k to drive 200,000, with a used you pay 30k to drive 150,000.  If you drive 25k a year, the new truck will last 8 years and will cost $6,875/year , the used truck will last 6 years and cost 5000 a year.   Glad to hear you are getting great fuel efficiency, same truck but only 2 years older would have saved you on interest and insurance as well.  Could have saved enough for that ski lift ticket for the whole family.  At the price point of 35k lots of certified preowned options are out there if reliability is #1 priority and I seriously doubt after the new car smell is gone that you would have been able to detect much difference between the 35k and the 60k options. 

Now-lets talk about  needing such a big truck cause your 5th wheel weighs 15,000!  My Airsteam only weighs 2500, a live-in size weighs under 5000     Our-combo camper and  6 cylinder, 15 year old  truck still getting 25 mpg on trips.

Don't mean to harsh on you-you seem headed in the right direction.  The best thing I have gotten from this forum is to question everything.

Goldielocks

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Re: Bizarro New Car World
« Reply #44 on: October 28, 2015, 06:17:54 PM »
I know it's hard for most people in this fathom, but not everyone plans on having a retirement at 40. Some people enjoy working, and their jobs.

I'll use myself as an example for a moment. I drive a $60k truck. I bought it before I every dreamed of FIRE. Yes, my payment is high, and I'm 27

You're 27, you've worked maybe 10 years total, perhaps 5 years in your career?  You are still bright-eyed and bushy-tailed!  Heck, you are not even married yet, and how about some kids for good measure. Talk to me in another 20-25 years about how much you still like working everyday.  Trust me - It gets old.

There, I said it.  :-)

Thank you!
Even if you like your job, it is so much better knowing that it is a choice, not a debt slave master.

Cpa Cat

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Re: Bizarro New Car World
« Reply #45 on: October 28, 2015, 07:06:55 PM »
We've had the same next-door neighbors for 16 years. The two of them have had some combination of Lexus, BMW, or Audi on 3-year leases. Even at $500 per car a month, which I'm guessing is conservative -- I've never leased -- that comes to $192,000 over 16 years.

Us too. When the recession hit in 2007, our neighbors had a new Audi, a new Lexus, a BMW and a boat. The husband lost his job. They immediately sold the BMW and boat, but kept the brand new Audi and Lexus. I assume the BMW was the only car they could sell without coming out of pocket.

At one point, their recycling papers blew all over our lawn. As I was picking them up, I found their bank statement with $7 in their checking account, and a filled-out application to the local Kwik Shop (which I guess he decided not to turn in). We wondered how they were even making mortgage payments and if the house was going to get foreclosed on.

As it turns out life went on and they have recovered. They still have those same cars - the Lexus and the Audi. I guess they decided that new cars weren't really worth what they went through.

use2betrix

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Re: Bizarro New Car World
« Reply #46 on: October 28, 2015, 07:44:32 PM »
Ah trixr606.  Where to start.
Some back-of envelope math.  If you invested $60k  today it would likely be close to $120 k in 10 years, while in 10 years your truck will be just another 10 year old truck -mostly depreciated.  So if you drive 300 days a year for 10 years you will have paid $40 a day to drive the truck.  Add the extra insurance cost of a new, very expensive vehicle and you are up to $50 of added value to your life every time you get into your truck. 

A new truck (which will only be new for a while) doesn't sound like as much fun as 20 years of ski passes for an entire family.  Or even driving a new truck for a year, vrs.  starting out with a one year old truck and two years of ski passes for the whole family. Or a whole extra year spent working to drive a new truck.  But hey, if that's what you are into.

ps -love the fruedian typos " So because I drive a nice truck I can't be on the path to an early environment?"

Actually, your math is still wrong.

I would STILL need a truck to tow my 15,000 lbs. So the alternative to my truck would be getting a free truck so I could invest that? Please inform me how to go about that.

At best I could have gotten a used watered down truck with 50k miles for $35k. Any less than that and I'd be looking at significant miles, plus I'm not driving a Dodge, nor a ford older than 2011 due to major model failures prior, and the 7.3 ford is incapable of towing my trailer.

Not to mention, I drive 25k a year so anything with significant miles will shorten my truck life, thus costing more. I have moved 3 times in the last 18 months, each 1200+ miles, and I'm unable to tow another vehicle, nor use public transportation or bike due to my typical job site locations. Unless most of you would feel comfortable riding your bike on 10 mile stretches of 70mph 2 lane roads with minimal shoulder. No thanks, personally, and there aren't usually Rv parks any closer to the job site so often the commute is necessary.

Hey I live out in a rural area and fully understand the need for a reliable vehicle. I also have a truck just to haul a camper so I feel the love on that too. I have no idea what trucks cost so I'll assume you are right .  So it looks like your options were a 35k truck with 50k miles or a brand new truck.  Assume both would last a total of of 200,000 miles.  Then assume both trucks will sell for about $5k when they have 200,000 miles aren't reliable enough for your purposes anymore.  With a new truck you pay 55k to drive 200,000, with a used you pay 30k to drive 150,000.  If you drive 25k a year, the new truck will last 8 years and will cost $6,875/year , the used truck will last 6 years and cost 5000 a year.   Glad to hear you are getting great fuel efficiency, same truck but only 2 years older would have saved you on interest and insurance as well.  Could have saved enough for that ski lift ticket for the whole family.  At the price point of 35k lots of certified preowned options are out there if reliability is #1 priority and I seriously doubt after the new car smell is gone that you would have been able to detect much difference between the 35k and the 60k options. 

Now-lets talk about  needing such a big truck cause your 5th wheel weighs 15,000!  My Airsteam only weighs 2500, a live-in size weighs under 5000     Our-combo camper and  6 cylinder, 15 year old  truck still getting 25 mpg on trips.

Don't mean to harsh on you-you seem headed in the right direction.  The best thing I have gotten from this forum is to question everything.

Do you live full time in your air stream? I live full time with my fiancé and chocolate lab in my 42' 5th wheel, have for almost 3 years and will another 6 or 7. And yes, it weighs 15,000 lbs. it was 13,000 with nothing in it, and I have a lot, since it's my only home.

I think living in a far far smaller dwelling than 99% of this forum is pretty mustache an, even though I bought the truck before I was aware of the site, as I mentioned before. But per your math, I only pay about $1000/yr more than my other option. Considering I take home $1000 in about 2-3 days of work, that's worth it to me...

Comparing my trailer I live full time in to yours you camp with is a full example. Until you've done it with no other home, it's not even close. Not as an adult and not when you make enough to afford a $500k mortgage if you wanted. I sacrifice quite a bit.

daschtick

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Re: Bizarro New Car World
« Reply #47 on: October 28, 2015, 07:51:25 PM »

I would STILL need a truck to tow my 15,000 lbs. So the alternative to my truck would be getting a free truck so I could invest that? Please inform me how to go about that.

At best I could have gotten a used watered down truck with 50k miles for $35k. Any less than that and I'd be looking at significant miles, plus I'm not driving a Dodge, nor a ford older than 2011 due to major model failures prior, and the 7.3 ford is incapable of towing my trailer.

Not to mention, I drive 25k a year so anything with significant miles will shorten my truck life, thus costing more. I have moved 3 times in the last 18 months, each 1200+ miles, and I'm unable to tow another vehicle, nor use public transportation or bike due to my typical job site locations. Unless most of you would feel comfortable riding your bike on 10 mile stretches of 70mph 2 lane roads with minimal shoulder. No thanks, personally, and there aren't usually Rv parks any closer to the job site so often the commute is necessary.

If I were you, I would seriously sit down and revisit your situation.  Buying a $60k truck to drive 25k miles a year is insane on so many levels - fuel, depreciation, maintenance, insurance.  All of this so you can tow a 15,000 pound fifth wheel 3600 miles in 18 months.  If I understand correctly, this means you have been non-towing approximately 34,000 miles over the last 18 months.  You are throwing away a fortune!

Have you considered starting over with an RV that you could move job site to job site instead of a fifth wheel, and towing a cheaper, 2-3 year old fuel efficient car to pile on the heavy mileage?  The RV would then only travel 3600 miles over 18 months, and you could pile the 34,000 miles on a significantly cheaper car.

On another note, do you really see yourself doing this long term?

use2betrix

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Re: Bizarro New Car World
« Reply #48 on: October 28, 2015, 08:14:17 PM »

I would STILL need a truck to tow my 15,000 lbs. So the alternative to my truck would be getting a free truck so I could invest that? Please inform me how to go about that.

At best I could have gotten a used watered down truck with 50k miles for $35k. Any less than that and I'd be looking at significant miles, plus I'm not driving a Dodge, nor a ford older than 2011 due to major model failures prior, and the 7.3 ford is incapable of towing my trailer.

Not to mention, I drive 25k a year so anything with significant miles will shorten my truck life, thus costing more. I have moved 3 times in the last 18 months, each 1200+ miles, and I'm unable to tow another vehicle, nor use public transportation or bike due to my typical job site locations. Unless most of you would feel comfortable riding your bike on 10 mile stretches of 70mph 2 lane roads with minimal shoulder. No thanks, personally, and there aren't usually Rv parks any closer to the job site so often the commute is necessary.

If I were you, I would seriously sit down and revisit your situation.  Buying a $60k truck to drive 25k miles a year is insane on so many levels - fuel, depreciation, maintenance, insurance.  All of this so you can tow a 15,000 pound fifth wheel 3600 miles in 18 months.  If I understand correctly, this means you have been non-towing approximately 34,000 miles over the last 18 months.  You are throwing away a fortune!

Have you considered starting over with an RV that you could move job site to job site instead of a fifth wheel, and towing a cheaper, 2-3 year old fuel efficient car to pile on the heavy mileage?  The RV would then only travel 3600 miles over 18 months, and you could pile the 34,000 miles on a significantly cheaper car.

On another note, do you really see yourself doing this long term?

I have considered sooooo many options now, but the whole thing initially was a bit of an impulse buy because I was sick of moving full apartments every 6 months. With all the stuff I had, dog, short leases, it was very difficult and often cost a lot.

RV's also cost a lot more. I am already sacrificing a LOT living in a 40' space full time. I'm not going to get a outdated dump on top of it. A RV similar sized to mine of similar quality would probably cost at LEAST 50k-100k more than my 5th wheel. They are not cheap. Not for decent ones. Plus, when you live in it full time, if things break and have to go into a shop then you're at a hotel for months, I could go way more into it, but there's a lot to this lifestyle.

I foresee doing this another 6-8 years. I'll probably have kids in 3-4 and will travel with them and my soon to be wife until they start kindergarten. By then I should be semi near fire but will also still travel
And do contract work like 3 months a year or so, so my investments can continue to grow. My 5th wheel on a 7 year loan and Rv spot are 1200/mo which isn't bad. So other than the truck, which is $$, it's still far from the end of the world. I've still had several months this year where I've saved $10k in a month. I can make as much as double doing contract work on the road as opposed to if I took a permanent job. I just need to really start taking advantage, which I've done since early to mid last year. Took some time to get over all the spending. I'm still not great but improved.

I should also add that two of the years and about 70% of my trucks miles I worked for a company that paid for 100% of my gas, work and personal, and gave me a 650/mo truck allowance.

I also have a 99 Camry my fiancé drives, and I have since started using her car for any trips over about 45 mins.
« Last Edit: October 28, 2015, 08:27:52 PM by Trixr606 »

needmyfi

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Re: Bizarro New Car World
« Reply #49 on: October 28, 2015, 08:54:30 PM »
Have spent a month at a time in the camper by choice (vacation) and three months not by choice (destroyed house).   Husband and large dog.  The three months was hell-the camper was 17' and it was the most stressful period of my life (see house destroyed above).  A 32' vintage Airsteam trailer would be totally luxe with zero depreciation, and a much smaller truck could be used to tow it. A completely overhauled one from the 60's -all new furnishings and appliances is under $20k.  All riveted aluminum, solid and stylish.  Built like a jet.   The fifth wheel really takes up your truck bed in transit -your actual living space would be the same.   To me, a fancy pants camper with the same amount of living space for less money and smaller truck to tow it would be win win win.  Your savings would be a whole lot more than $2000 a year.

What you really need to decide is if you are "making a lot of sacrifices"  or love your job and want to keep it forever. You say both.  If I loved my job and never wanted any other life than the one I had, then I too would spend,  3,4,5  thousand a year would mean nothing if I was making your kind of money.  If your job is just a means to an ends then and you have 6-7 years of big stash building and clear about 120k after taxes and business expenses, I wouldn't dismiss even 5% additional savings.  Good Luck