Author Topic: OMY for clown car  (Read 27600 times)

SnackDog

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OMY for clown car
« on: August 28, 2016, 07:55:28 AM »
"You used to think that it was so easy
You used to say that it was so easy
But you're trying, you're trying now
Another year and then you'd be happy
Just one more year and then you'd be happy
But you're crying, you're crying now"
Gerry Rafferty, Baker Street


A colleague of mine is in his mid fifties and ready to retire early. He has saved about $5MM and has two nearly paid for homes. I think he has 1-2 years mortgage left on one of them. He is proposing to work one more year in order to fund a clown car. He is a generally frugal guy who minimizes operating costs pretty well. However he says he has been a closet car nut for years and wants to splash out in his early retirement years. One more year will net him around $300k after taxes.

He is proposing to blow half ($150k) on a one year old Bentley (I think the model is Flying Spur or something; sounds like a spaghetti western to me). He says he will get one in a fun color (red, green or blue maybe) and drive the crap out of it. He wants to tear down dirt roads, take it tent camping, fast food drive thrus, etc.  Kind of funny. He will keep it until he is sick of it, then either trade it for something more sensible (maybe big Lexus) or donate it to charity if it lasts so long as to be fully depreciated.

I have warned him this is not a vey frugal choiceand he may regret it but he seems determined. I suggested he keep his Toyota and donate the cash to charity but he didn't seem so excited.  I guess he can afford it.

What do you reckon?

yourusernamehere

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Re: OMY for clown car
« Reply #1 on: August 28, 2016, 08:39:40 AM »
I reckon he could rent one for a week and be bored by the end.

horsepoor

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Re: OMY for clown car
« Reply #2 on: August 28, 2016, 08:42:53 AM »
It actually sounds like he can afford it and has thought it through pretty thoroughly.  Not what I'd want to spend my money on, but I might do OMY to buy a really nice horse and new trailer to last me through the active years of my retirement.

Nederstash

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Re: OMY for clown car
« Reply #3 on: August 28, 2016, 09:08:08 AM »
He saved 5 million... he can blow money on cars or whatever the hell he likes. He's not going into debt, not teetering on the edge of disaster, not hurting anyone with this choice. I don't think he should be ridiculed, so let's not be too judgmental.

snacky

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Re: OMY for clown car
« Reply #4 on: August 28, 2016, 09:12:34 AM »
Why the hell not? There's neither shame nor comedy in someone carefully thinking through their priorities and working to afford something they love. Good for him.

SeaEhm

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Re: OMY for clown car
« Reply #5 on: August 28, 2016, 09:49:12 AM »

MilesTeg

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Re: OMY for clown car
« Reply #6 on: August 28, 2016, 10:02:49 AM »
"You used to think that it was so easy
You used to say that it was so easy
But you're trying, you're trying now
Another year and then you'd be happy
Just one more year and then you'd be happy
But you're crying, you're crying now"
Gerry Rafferty, Baker Street


A colleague of mine is in his mid fifties and ready to retire early. He has saved about $5MM and has two nearly paid for homes. I think he has 1-2 years mortgage left on one of them. He is proposing to work one more year in order to fund a clown car. He is a generally frugal guy who minimizes operating costs pretty well. However he says he has been a closet car nut for years and wants to splash out in his early retirement years. One more year will net him around $300k after taxes.

He is proposing to blow half ($150k) on a one year old Bentley (I think the model is Flying Spur or something; sounds like a spaghetti western to me). He says he will get one in a fun color (red, green or blue maybe) and drive the crap out of it. He wants to tear down dirt roads, take it tent camping, fast food drive thrus, etc.  Kind of funny. He will keep it until he is sick of it, then either trade it for something more sensible (maybe big Lexus) or donate it to charity if it lasts so long as to be fully depreciated.

I have warned him this is not a vey frugal choiceand he may regret it but he seems determined. I suggested he keep his Toyota and donate the cash to charity but he didn't seem so excited.  I guess he can afford it.

What do you reckon?

The guy has 5 million and all the other financials you talk about and you are fussing him over buying an expensive car?

If you've made good decisions and have a fantastic financial position like this guy, it's not some horrible sin to enjoy a little of it. You can't take it with you, and your financial net worth doesn't equate to your net worth as a human being.

The group think here sometimes gets tedious.
« Last Edit: August 28, 2016, 10:07:23 AM by MilesTeg »

Metric Mouse

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Re: OMY for clown car
« Reply #7 on: August 28, 2016, 11:12:11 AM »
Why the hell not? There's neither shame nor comedy in someone carefully thinking through their priorities and working to afford something they love. Good for him.

Great point. Spend consciously on experiences that bring joy.

SnackDog

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Re: OMY for clown car
« Reply #8 on: August 29, 2016, 06:40:38 AM »
Good input.

My issues are -

1) if he has only $5MM saved, he will have to live on say 3.5% of that as he is retiring early.  $175K/yr is maybe $130K/yr after tax.  I  think we all probably know families spending $130K per year and they are not purchasing $150,000 vehicles to drive.  My own guidance for vehicle capex is maximum 5% of net income - in his case $6500/yr.

2) Bentleys are notoriously unreliable, so the joy factor may turn into the agony factor quickly, especially if he abuses the car.

3) I'm always a bit nervous about litigious Americans and a flashy car can attract the wrong type of behavior in a fender bender or, heaven forbid, major accident.

But, the way he lays it out as one more year for a frivilous pursuit of joy, he can afford it and has worked the numbers.  I hope he gets a wild color, haha.


MilesTeg

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Re: OMY for clown car
« Reply #9 on: August 29, 2016, 09:29:14 AM »
Good input.

My issues are -

1) if he has only $5MM saved, he will have to live on say 3.5% of that as he is retiring early.  $175K/yr is maybe $130K/yr after tax.  I  think we all probably know families spending $130K per year and they are not purchasing $150,000 vehicles to drive.  My own guidance for vehicle capex is maximum 5% of net income - in his case $6500/yr.

I'm not sure you grasp just how much money $5 million is, or how much $175k gross a year is.

Quote
3) I'm always a bit nervous about litigious Americans and a flashy car can attract the wrong type of behavior in a fender bender or, heaven forbid, major accident.

Umbrella Insurance. Someone with that much net worth should have it regardless of what kind of car they drive.

Quote
But, the way he lays it out as one more year for a frivilous pursuit of joy, he can afford it and has worked the numbers.  I hope he gets a wild color, haha.

He could afford to buy 20 or 30 of the damn things and still retire extremely comfortably.... Even when you don't factor in his continued rental income.

Again, you can't take it with you....

Chris22

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Re: OMY for clown car
« Reply #10 on: August 29, 2016, 09:37:00 AM »
The group think here sometimes gets tedious.

If he was planning to spend the same money on biking across country, donating it to the library, or "slow traveling" around somewhere like a native, this group would be fighting to stand in line to pat him on the back.  But "OMG Cars!"

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Re: OMY for clown car
« Reply #11 on: August 29, 2016, 09:48:29 AM »
Based on the numbers, it doesn't look to me like the car will be a serious threat to this guy's financial independence, particularly if he's got a frugal lifestyle overall and $5MM saved up. It's one car, not five or six, and he's got more than enough cash flow to cover it even with the secondary spending.

It would be a different story if he had only half a million saved, a hefty new mortgage, and an over-leveraged lifestyle. But that's not his situation.

GuitarStv

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Re: OMY for clown car
« Reply #12 on: August 29, 2016, 09:49:51 AM »
The group think here sometimes gets tedious.

If he was planning to spend the same money on biking across country, donating it to the library, or "slow traveling" around somewhere like a native, this group would be fighting to stand in line to pat him on the back.  But "OMG Cars!"

Is it even possible to spend 150k cycling across the country?  If it took a year to do you could buy a new pretty awesome carbon fiber race bike each month (5k per bike = 60k), stay in a fancy hotel room every night (average 100$ per stay = 36k), exclusively eat out for every meal of your bike tour (average 100$ each meal = 36K), and then have enough left over at the end (17k) to buy a new car and the gas needed to drive home with.  That's an ass-ton of money to blow on a luxury vehicle.

Donating money to a public service like a library benefits everyone.  Driving an expensive luxury car actually does harm to people (partly through the waste to create the car, partly through the pollution created over the lifespan of the car).  Do you really equate these two ideas in your head somehow?

Chris22

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Re: OMY for clown car
« Reply #13 on: August 29, 2016, 09:56:13 AM »
The group think here sometimes gets tedious.

If he was planning to spend the same money on biking across country, donating it to the library, or "slow traveling" around somewhere like a native, this group would be fighting to stand in line to pat him on the back.  But "OMG Cars!"

Is it even possible to spend 150k cycling across the country?  If it took a year to do you could buy a new pretty awesome carbon fiber race bike each month (5k per bike = 60k), stay in a fancy hotel room every night (average 100$ per stay = 36k), exclusively eat out for every meal of your bike tour (average 100$ each meal = 36K), and then have enough left over at the end (17k) to buy a new car and the gas needed to drive home with.  That's an ass-ton of money to blow on a luxury vehicle.

Who the fuck knows or cares?  You get my point.  Which is that....

Quote
Donating money to a public service like a library benefits everyone.  Driving an expensive luxury car actually does harm to people (partly through the waste to create the car, partly through the pollution created over the lifespan of the car).  Do you really equate these two ideas in your head somehow?

...MMMers like to use "frugality" as an excuse to pick and chose amongst behaviors they like and don't like, even when the "frugality" part is spurious.  You guys hate fancy cars, just be intellectually honest and say that, don't pretend this guy can't or shouldn't afford it.

GuitarStv

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Re: OMY for clown car
« Reply #14 on: August 29, 2016, 10:59:07 AM »
...MMMers like to use "frugality" as an excuse to pick and chose amongst behaviors they like and don't like, even when the "frugality" part is spurious.  You guys hate fancy cars, just be intellectually honest and say that, don't pretend this guy can't or shouldn't afford it.

Being able to afford something isn't really the point of this website though.  "Can I afford it?" is just a simple sanity test . . . certainly not an important question when considering a purchase.  If the answer to "Can I afford it?" is no, you shouldn't even be considering the purchase.

http://www.mrmoneymustache.com/2012/09/18/is-it-convenient-would-i-enjoy-it-wrong-question/

MilesTeg

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Re: OMY for clown car
« Reply #15 on: August 29, 2016, 11:22:03 AM »
...MMMers like to use "frugality" as an excuse to pick and chose amongst behaviors they like and don't like, even when the "frugality" part is spurious.  You guys hate fancy cars, just be intellectually honest and say that, don't pretend this guy can't or shouldn't afford it.

Being able to afford something isn't really the point of this website though.  "Can I afford it?" is just a simple sanity test . . . certainly not an important question when considering a purchase.  If the answer to "Can I afford it?" is no, you shouldn't even be considering the purchase.

http://www.mrmoneymustache.com/2012/09/18/is-it-convenient-would-i-enjoy-it-wrong-question/

We know MMM likes to take ridiculous positions like needing "infinite money" to purchase anything but the bare necessities of life, but just because MMM takes his own advice to a ridiculous and illogical extreme does not mean everyone does or has to act like they do when having discussions.

GuitarStv

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Re: OMY for clown car
« Reply #16 on: August 29, 2016, 11:33:48 AM »
...MMMers like to use "frugality" as an excuse to pick and chose amongst behaviors they like and don't like, even when the "frugality" part is spurious.  You guys hate fancy cars, just be intellectually honest and say that, don't pretend this guy can't or shouldn't afford it.

Being able to afford something isn't really the point of this website though.  "Can I afford it?" is just a simple sanity test . . . certainly not an important question when considering a purchase.  If the answer to "Can I afford it?" is no, you shouldn't even be considering the purchase.

http://www.mrmoneymustache.com/2012/09/18/is-it-convenient-would-i-enjoy-it-wrong-question/

We know MMM likes to take ridiculous positions like needing "infinite money" to purchase anything but the bare necessities of life, but just because MMM takes his own advice to a ridiculous and illogical extreme does not mean everyone does or has to act like they do when having discussions.

What ridiculous or illogical extreme does MMM take things to?  He has a very nice house, hobbies that occupy his time, friends, great meals, all the time he wants to do the things he wants, a family, he's active in his community . . . If the goal of life is happiness, MMM seems to proving that spending a lot of money isn't necessary.  Is that extreme or illogical?

onehair

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Re: OMY for clown car
« Reply #17 on: August 29, 2016, 11:35:12 AM »
Since it is OPM (the best kind) and it won't affect our FIRE plans I say let him buy the thing...He may find that having is not the same as wanting to quote Spock...

MilesTeg

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Re: OMY for clown car
« Reply #18 on: August 29, 2016, 11:49:06 AM »
...MMMers like to use "frugality" as an excuse to pick and chose amongst behaviors they like and don't like, even when the "frugality" part is spurious.  You guys hate fancy cars, just be intellectually honest and say that, don't pretend this guy can't or shouldn't afford it.

Being able to afford something isn't really the point of this website though.  "Can I afford it?" is just a simple sanity test . . . certainly not an important question when considering a purchase.  If the answer to "Can I afford it?" is no, you shouldn't even be considering the purchase.

http://www.mrmoneymustache.com/2012/09/18/is-it-convenient-would-i-enjoy-it-wrong-question/

We know MMM likes to take ridiculous positions like needing "infinite money" to purchase anything but the bare necessities of life, but just because MMM takes his own advice to a ridiculous and illogical extreme does not mean everyone does or has to act like they do when having discussions.

What ridiculous or illogical extreme does MMM take things to?  He has a very nice house, hobbies that occupy his time, friends, great meals, all the time he wants to do the things he wants, a family, he's active in his community . . . If the goal of life is happiness, MMM seems to proving that spending a lot of money isn't necessary.  Is that extreme or illogical?

His biggest issue (which may just be an issue for his most devout followers) is the assumption that what makes him happy makes everyone happy. MMM thrives on what he does -- and good for him. Not everyone is like him, and not everyone derives happiness from the same things he does.
Different strokes for different folks, ya know?

And frankly, even MMM admits that he derives happiness from many purchases and activities that are not frugal. He likes fancy bikes, fancy organic foods, fancy houses, expensive foreign trips, etc. As Chris22 mentioned, lots of folks around here use "frugality" as an excuse to attempt to shame others for their choices.

MMM gives extremely good practical financial advice, but is extremely hypocritical when he starts in on the subjective parts of this "philosophy".

This thread is a perfect example. OP and others are trying to shame the person for making a purchase they don't agree with and not out of any legitimate concern for the person's financial status.

TheGrimSqueaker

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Re: OMY for clown car
« Reply #19 on: August 29, 2016, 12:19:40 PM »
I'm seldom shy about mocking stupid behavior at length. But I just don't see anything to mock here except maybe our collective knee-jerk reaction to this guy's Bentley.

The entire point of frugality is to set aside money and resources for something really important, is it not? For most of us here, that "something important" is an early retirement. We do the FI part in order to RE.

But what about people who have some other reason to get FI? The guy buying the Bentley is already a badass with $5 million plus other assets, and not much debt. He's got nothing to prove to anyone, particularly not most of us who have substantially fewer assets. He's voluntarily deciding to work an extra year for an indulgence he wants very, very much... so what?

If we look closely at ourselves, we'll see that most of us have an indulgence of some kind that we spend money, time, or resources on. Maybe it's travel, charity, concerts, or a hobby of some kind. It's not something we allow to break the bank, and it's also not a justification to spend on every random whim, but in the context of a frugal overall lifestyle, it really is acceptable to have an affordable indulgence now and then. Indulgence doesn't become stupidity unless it's allowed to continue to the point where a person's financial stability or future is seriously compromised in order to satisfy a present whim.

What is an early retirement, if not an affordable indulgence to someone who is financially independent?

1) Bentley Guy has paid his dues by racking up the $5 million plus other assets before buying the indulgence. He's not in debt up to the eyeballs, he's not over-leveraged, and he's enjoying the financial stability that comes in part from past good decision making.

2) Bentley Guy has a stable financial position overall, and the purchase is being made in the context of a conservative, frugal lifestyle (not as one more doodad in a long series of expensive whims).

3) The car, while too expensive for most of us, is affordable given Bentley Guy's overall financial position. He is enough of a badass to afford one of the traditional symbols of badassity.

4) Bentley Guy has done an informed cost/benefit analysis and determined that, TO HIM, the car is worth an extra year of work. This isn't an abstract postpone-retirement-down-the-road decision, but a very real decision he's making right now.

5) The purchase just isn't putting Bentley guy at risk. In the worst case scenario, if he lost his job today, he would still be able to continue at his present standard of living or close to it, even with the car.

If any of the above points wasn't true-- if Bentley Guy had a lot of debt, or didn't have his retirement set up, or wasn't working an extra year to pay for it, or was making a whole slew of other purchases without regard to their impact, or otherwise couldn't actually afford the car-- then I think we'd have something to mock.

Digital Dogma

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Re: OMY for clown car
« Reply #20 on: August 29, 2016, 12:23:55 PM »
Sounds like status seeking behavior, the car is not a form of transportation in that case, its a "lifestyle" proclamation to the rest of the world. He wants everyone around him to recognize that he has made it to a point in his life where he can blow cash out his tailpipe if he wants to.

I think thats what the french call nuveaux riche

MoneyCat

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Re: OMY for clown car
« Reply #21 on: August 29, 2016, 12:27:49 PM »
If I had $5 million, I wouldn't really be concerned about the cost of a new car. More power to the guy. He's rich. He can do whatever he wants.

MilesTeg

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Re: OMY for clown car
« Reply #22 on: August 29, 2016, 12:28:52 PM »
Sounds like status seeking behavior, the car is not a form of transportation in that case, its a "lifestyle" proclamation to the rest of the world. He wants everyone around him to recognize that he has made it to a point in his life where he can blow cash out his tailpipe if he wants to.

I think thats what the french call nuveaux riche

Know another thing that is a status seeking lifestyle proclamation? Early Retirement.
« Last Edit: August 29, 2016, 12:36:04 PM by MilesTeg »

MilesTeg

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Re: OMY for clown car
« Reply #23 on: August 29, 2016, 12:41:39 PM »
The original question really is just "Is it OK to work an extra 2000 hours, one year of your life to fund a vehicle purchase?" This is going to be a personal choice - what you value. Or at least, in this scenario, it's an informed, conscious choice. (Also, it's not analogous to OMY out of fear of financial failure.)

My very rough plan for many years in the future is "if, several years after I hit FIRE, I have more money than I needed after all, I'll blow some on a car my wife and I think would be fun to have around." I do not plan to work an extra year to make sure that happens. But that's my choice, my personal preference.

Thing is, he doesn't even have to work another year for it... With $5 million saved up he could fairly reliably net north of $150k a year in earnings off of that sum -- in perpetuity. Just by purchasing a dividend stock like Dupont, Coca-Cola, Colgate-Palmolive, etc. Add in rental income and SS, and he could get near $200k a year in gross earnings.

Now, if he really thinks he needs more than $200k a year to have a comfortable retirement, THAT might be worth some discussion...

Jrr85

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Re: OMY for clown car
« Reply #24 on: August 29, 2016, 12:44:21 PM »
"You used to think that it was so easy
You used to say that it was so easy
But you're trying, you're trying now
Another year and then you'd be happy
Just one more year and then you'd be happy
But you're crying, you're crying now"
Gerry Rafferty, Baker Street


A colleague of mine is in his mid fifties and ready to retire early. He has saved about $5MM and has two nearly paid for homes. I think he has 1-2 years mortgage left on one of them. He is proposing to work one more year in order to fund a clown car. He is a generally frugal guy who minimizes operating costs pretty well. However he says he has been a closet car nut for years and wants to splash out in his early retirement years. One more year will net him around $300k after taxes.

He is proposing to blow half ($150k) on a one year old Bentley (I think the model is Flying Spur or something; sounds like a spaghetti western to me). He says he will get one in a fun color (red, green or blue maybe) and drive the crap out of it. He wants to tear down dirt roads, take it tent camping, fast food drive thrus, etc.  Kind of funny. He will keep it until he is sick of it, then either trade it for something more sensible (maybe big Lexus) or donate it to charity if it lasts so long as to be fully depreciated.

I have warned him this is not a vey frugal choiceand he may regret it but he seems determined. I suggested he keep his Toyota and donate the cash to charity but he didn't seem so excited.  I guess he can afford it.

What do you reckon?

The guy has 5 million and all the other financials you talk about and you are fussing him over buying an expensive car?

If you've made good decisions and have a fantastic financial position like this guy, it's not some horrible sin to enjoy a little of it. You can't take it with you, and your financial net worth doesn't equate to your net worth as a human being.

The group think here sometimes gets tedious.

I kind of come down on the opposite side and say that the "other financials" would make me counsel against it (assuming he actually solicited my opinion and I thought he really wanted an honest opinion, because otherwise it certainly doesn't raise to the level that even close friends should stick their nose in it). 

If he is clearing around $300k this year after taxes and he's in his mid 50's, $5M may not be that high of a networth.  Saving $90k a year for 25 years at 6% will get you roughly $5M.  SO depending on how long he's been making good money, having a $5M net worth may show that he has quite a high level of spending to keep up before throwing in a $150k car.  Even then it's not like he can't afford it, it's just that he apparently enjoys the finer things to get to that level of spending, so I'd want to think hard about whether this is really "the one" thing I want to spend money on or whether it's "one of the" things I want to spend money on. 

But it's hard to say without knowing what his spending is like now and how long he has been making really good money.  If $200k a year in investment returns is way more than enough to pay for his dream lifestyle, and he wants the car, he should knock himself out.

MilesTeg

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Re: OMY for clown car
« Reply #25 on: August 29, 2016, 01:14:30 PM »

I kind of come down on the opposite side and say that the "other financials" would make me counsel against it (assuming he actually solicited my opinion and I thought he really wanted an honest opinion, because otherwise it certainly doesn't raise to the level that even close friends should stick their nose in it). 

If he is clearing around $300k this year after taxes and he's in his mid 50's, $5M may not be that high of a networth.  Saving $90k a year for 25 years at 6% will get you roughly $5M.  SO depending on how long he's been making good money, having a $5M net worth may show that he has quite a high level of spending to keep up before throwing in a $150k car.  Even then it's not like he can't afford it, it's just that he apparently enjoys the finer things to get to that level of spending, so I'd want to think hard about whether this is really "the one" thing I want to spend money on or whether it's "one of the" things I want to spend money on. 

But it's hard to say without knowing what his spending is like now and how long he has been making really good money.  If $200k a year in investment returns is way more than enough to pay for his dream lifestyle, and he wants the car, he should knock himself out.

Any way you look at it, you have people arguing that a multi-millionaire can't afford a fancy car... It's obvious most are complaining because they have an issue with what he's buying and not on the financial merits of the decision. Even if he is a very high spender, we're talking about changing what he's spending money on, not about whether or not he's able to provide for himself for a long, comfortable retirement. It's fundamentally different from someone planning to retire with just barely enough retirement funding to make it by.

Apples

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Re: OMY for clown car
« Reply #26 on: August 29, 2016, 01:31:00 PM »
"You used to think that it was so easy
You used to say that it was so easy
But you're trying, you're trying now
Another year and then you'd be happy
Just one more year and then you'd be happy
But you're crying, you're crying now"
Gerry Rafferty, Baker Street


A colleague of mine is in his mid fifties and ready to retire early. He has saved about $5MM and has two nearly paid for homes. I think he has 1-2 years mortgage left on one of them. He is proposing to work one more year in order to fund a clown car. He is a generally frugal guy who minimizes operating costs pretty well. However he says he has been a closet car nut for years and wants to splash out in his early retirement years. One more year will net him around $300k after taxes.

He is proposing to blow half ($150k) on a one year old Bentley (I think the model is Flying Spur or something; sounds like a spaghetti western to me). He says he will get one in a fun color (red, green or blue maybe) and drive the crap out of it. He wants to tear down dirt roads, take it tent camping, fast food drive thrus, etc.  Kind of funny. He will keep it until he is sick of it, then either trade it for something more sensible (maybe big Lexus) or donate it to charity if it lasts so long as to be fully depreciated.

I have warned him this is not a vey frugal choiceand he may regret it but he seems determined. I suggested he keep his Toyota and donate the cash to charity but he didn't seem so excited.  I guess he can afford it.

What do you reckon?

The guy has 5 million and all the other financials you talk about and you are fussing him over buying an expensive car?

If you've made good decisions and have a fantastic financial position like this guy, it's not some horrible sin to enjoy a little of it. You can't take it with you, and your financial net worth doesn't equate to your net worth as a human being.

The group think here sometimes gets tedious.

I kind of come down on the opposite side and say that the "other financials" would make me counsel against it (assuming he actually solicited my opinion and I thought he really wanted an honest opinion, because otherwise it certainly doesn't raise to the level that even close friends should stick their nose in it). 

If he is clearing around $300k this year after taxes and he's in his mid 50's, $5M may not be that high of a networth.  Saving $90k a year for 25 years at 6% will get you roughly $5M.  SO depending on how long he's been making good money, having a $5M net worth may show that he has quite a high level of spending to keep up before throwing in a $150k car.  Even then it's not like he can't afford it, it's just that he apparently enjoys the finer things to get to that level of spending, so I'd want to think hard about whether this is really "the one" thing I want to spend money on or whether it's "one of the" things I want to spend money on. 

But it's hard to say without knowing what his spending is like now and how long he has been making really good money.  If $200k a year in investment returns is way more than enough to pay for his dream lifestyle, and he wants the car, he should knock himself out.

...but both of his mortgages are paid off or will shortly be paid off.  And we don't know where he lives, but if he also put two kids through college, lives in a decent house in a decent neighborhood, well it's possible that he actually lives much more within his means than it first appears.  In some areas of the country a mortgage would take up several thousand dollars per month for a regular size house, plus the second mortgage on the other house.  If those are gone, who know, maybe he's saving at least 50% or more without college costs.

Or you're right, and he can't really afford it because he spends $200k a year.

Metric Mouse

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Re: OMY for clown car
« Reply #27 on: August 29, 2016, 01:40:49 PM »
...MMMers like to use "frugality" as an excuse to pick and chose amongst behaviors they like and don't like, even when the "frugality" part is spurious.  You guys hate fancy cars, just be intellectually honest and say that, don't pretend this guy can't or shouldn't afford it.

Being able to afford something isn't really the point of this website though.  "Can I afford it?" is just a simple sanity test . . . certainly not an important question when considering a purchase.  If the answer to "Can I afford it?" is no, you shouldn't even be considering the purchase.

http://www.mrmoneymustache.com/2012/09/18/is-it-convenient-would-i-enjoy-it-wrong-question/

We know MMM likes to take ridiculous positions like needing "infinite money" to purchase anything but the bare necessities of life, but just because MMM takes his own advice to a ridiculous and illogical extreme does not mean everyone does or has to act like they do when having discussions.

What ridiculous or illogical extreme does MMM take things to? 

You mean besides flying to Ecuador and back every year while arguing that fossil fuels are ruining the planet?

GuitarStv

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Re: OMY for clown car
« Reply #28 on: August 29, 2016, 01:49:24 PM »
...MMMers like to use "frugality" as an excuse to pick and chose amongst behaviors they like and don't like, even when the "frugality" part is spurious.  You guys hate fancy cars, just be intellectually honest and say that, don't pretend this guy can't or shouldn't afford it.

Being able to afford something isn't really the point of this website though.  "Can I afford it?" is just a simple sanity test . . . certainly not an important question when considering a purchase.  If the answer to "Can I afford it?" is no, you shouldn't even be considering the purchase.

http://www.mrmoneymustache.com/2012/09/18/is-it-convenient-would-i-enjoy-it-wrong-question/

We know MMM likes to take ridiculous positions like needing "infinite money" to purchase anything but the bare necessities of life, but just because MMM takes his own advice to a ridiculous and illogical extreme does not mean everyone does or has to act like they do when having discussions.

What ridiculous or illogical extreme does MMM take things to? 

You mean besides flying to Ecuador and back every year while arguing that fossil fuels are ruining the planet?

Sure, that's a valid criticism.  It's something that goes against the general message of his blog, and is something I wish he didn't do.  It doesn't detract from the rest of the message of the blog, just shows that he's human and fucks up now and again too.

Metric Mouse

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Re: OMY for clown car
« Reply #29 on: August 29, 2016, 01:58:23 PM »
Well, if we can forgive MMM for his follies, then, perhaps, somehow, we can find the strength to forgive Snackdog's colleuge for theirs.  Any data on how a $150k car is worse for the environment and thus every living thing on the planet than a $4k car. I would guess any difference is negligible.

Jrr85

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Re: OMY for clown car
« Reply #30 on: August 29, 2016, 02:05:36 PM »

I kind of come down on the opposite side and say that the "other financials" would make me counsel against it (assuming he actually solicited my opinion and I thought he really wanted an honest opinion, because otherwise it certainly doesn't raise to the level that even close friends should stick their nose in it). 

If he is clearing around $300k this year after taxes and he's in his mid 50's, $5M may not be that high of a networth.  Saving $90k a year for 25 years at 6% will get you roughly $5M.  SO depending on how long he's been making good money, having a $5M net worth may show that he has quite a high level of spending to keep up before throwing in a $150k car.  Even then it's not like he can't afford it, it's just that he apparently enjoys the finer things to get to that level of spending, so I'd want to think hard about whether this is really "the one" thing I want to spend money on or whether it's "one of the" things I want to spend money on. 

But it's hard to say without knowing what his spending is like now and how long he has been making really good money.  If $200k a year in investment returns is way more than enough to pay for his dream lifestyle, and he wants the car, he should knock himself out.

Any way you look at it, you have people arguing that a multi-millionaire can't afford a fancy car...

Well, I don't think anybody is really arguing that the multi-millionaire can't afford a fancy car.  I think I was the only one that even implied it might possibly cramp his lifestyle, and that was conditional on him having  very high annual spending.   


It's obvious most are complaining because they have an issue with what he's buying and not on the financial merits of the decision. Even if he is a very high spender, we're talking about changing what he's spending money on, not about whether or not he's able to provide for himself for a long, comfortable retirement. It's fundamentally different from someone planning to retire with just barely enough retirement funding to make it by.

I think some people are being judgmental about what he spends money on.  I think other people are, as you said, talking about changing what he spends the money on.  Considering that with the actual desire of wanting to change the Bentley buyer's spending is a little crazy; but thinking about it from what would maximize their happiness if they were in that position is possibly useful if they are still working out what they value, and at least not harmful if they are not coming from a place of envy or unwarranted judgment. 

daverobev

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Re: OMY for clown car
« Reply #31 on: August 29, 2016, 02:12:07 PM »
Well, if we can forgive MMM for his follies, then, perhaps, somehow, we can find the strength to forgive Snackdog's colleuge for theirs.  Any data on how a $150k car is worse for the environment and thus every living thing on the planet than a $4k car. I would guess any difference is negligible.

I bet a Bentley - any Bentley - has significantly more *mass* and significantly lower fuel efficiency than any $4k Corolla :P

The Bentley would've taken more energy to build, more expensive parts, more expensive oil even. Or just more oil!

But, sure, who cares. The OP's guy is rich, they can do what they want. We can all do what we want.

I was just having a discussion with my wife this morning about McDonalds recalling 33 million happy meal toys. What's sad is not that they are doing the recall; it's that 33m happy meal toys aren't even the total number of pointless plastic shite things McD's gives out a year. That's the problem. Not one guy buying a luxury car for shits and giggles.

We're all fucked/guilty/stupid. OP's guy is just going to have a little crazy fun (assuming they go through with tent camping out of it, ha!).

Digital Dogma

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Re: OMY for clown car
« Reply #32 on: August 29, 2016, 02:16:00 PM »
Any data on how a $150k car is worse for the environment and thus every living thing on the planet than a $4k car. I would guess any difference is negligible.
I can't say about this model, however other Bentley models have been shown to exceed regulatory emissions standards in some countries.

Quote
http://www.caradvice.com.au/467722/80-volkswagen-audi-bentley-models-banned-in-south-korea/
South Korean authorities have revoked the certification of, and recalled, 80 Volkswagen, Audi and Bentley models currently or previously on-sale due to falsified emissions and noise test data.

An executive of Audi Volkswagen South Korea has already been charged with falsifying 140 documents related to emissions and noise certification.


russianswinga

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Re: OMY for clown car
« Reply #33 on: August 29, 2016, 02:33:58 PM »
I get it. Dude loves his Bentley.

1. Buy a 2006 flying spur for 1/3 the price
https://www.cargurus.com/Cars/l-Used-2006-Bentley-Continental-Flying-Spur-c5280

2. Put this year's rims on it ($4-5K maybe?)

3. Put an updated car computer / GPS / bluetooth in it, high end - maybe another $1000?

4. Enjoy and put $200,000 in your pocket.

Thing is, "classic" cars like Bentleys generally age well and don't look dated 10 years on. Here's a 2006 interior. Still looks luxurious to me. Pass the grey poupon?

 
« Last Edit: August 29, 2016, 02:38:52 PM by russianswinga »

MgoSam

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Re: OMY for clown car
« Reply #34 on: August 29, 2016, 02:37:49 PM »
I really don't see anything wrong with this. Now I would likely do something differently, but as you mentioned the guy has $5M and two paid-off houses (or nearly enough). He probably could buy the Bentley without needing to work, but oh well.

If I had $5M in the bank/Vanguard, I would be considering spending $80k on a Tesla Model S.

gimp

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Re: OMY for clown car
« Reply #35 on: August 29, 2016, 02:53:13 PM »
We love the forum members who retire and travel. Honestly, who cares? He probably enjoys his work and if he's a car guy, then car guy that shit up. He's set. Now he's just trading time for enjoyment in a very, very direct way.

But if I was him I wouldn't get the bentley. Unreliable.

I would even less get a 2006 bentley. At least a new one comes with a warranty for a few years. The old one will just eat your money.



If it was me, I'd get a new ferrari. Buy the biggest warranty I could. Then see how much Ferrari likes me after I test their warranty out. They offer a three year unlimited mile bumper to bumper warranty, and I believe up to 7 years of basic stuff and 12 years of powertrain if you elect to buy it. I would make it my full-time job to drive. I figure I could easily hit 100k miles a year just absolutely enjoying the car. See if they offer to buy the car back just to get rid of me when they see the odometer at 275k miles and still six months left in the warranty.

MilesTeg

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Re: OMY for clown car
« Reply #36 on: August 29, 2016, 02:54:28 PM »
We love the forum members who retire and travel. Honestly, who cares? He probably enjoys his work and if he's a car guy, then car guy that shit up. He's set. Now he's just trading time for enjoyment in a very, very direct way.

But if I was him I wouldn't get the bentley. Unreliable.

I would even less get a 2006 bentley. At least a new one comes with a warranty for a few years. The old one will just eat your money.



If it was me, I'd get a new ferrari. Buy the biggest warranty I could. Then see how much Ferrari likes me after I test their warranty out. They offer a three year unlimited mile bumper to bumper warranty, and I believe up to 7 years of basic stuff and 12 years of powertrain if you elect to buy it. I would make it my full-time job to drive. I figure I could easily hit 100k miles a year just absolutely enjoying the car. See if they offer to buy the car back just to get rid of me when they see the odometer at 275k miles and still six months left in the warranty.

They offer warranties that don't have a mileage cap? Wow.

russianswinga

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Re: OMY for clown car
« Reply #37 on: August 29, 2016, 03:23:39 PM »
Oh, oh, wait, I just found out why he wants this year's model :)

http://jalopnik.com/bentley-has-your-in-car-booze-situation-covered-three-d-1785907295
"Bentley Has Your In-Car Booze Situation Covered Three Different Ways"

Cycling Stache

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Re: OMY for clown car
« Reply #38 on: August 29, 2016, 03:27:46 PM »
Sounds like status seeking behavior, the car is not a form of transportation in that case, its a "lifestyle" proclamation to the rest of the world. He wants everyone around him to recognize that he has made it to a point in his life where he can blow cash out his tailpipe if he wants to.

I think thats what the french call nuveaux riche

This goes too far, because it misses the point of peak experiences.  Driving a fast car fast is unbelievably fun and exciting.  Doing it at the expense of working another year, not paying off debt, etc., may not be as good an idea, but the joy of driving itself is actually a true experience for many people.  Putting aside the environmental impact, there is no difference whatsoever between this and my buying a "race" bike so that I can go a little faster in my race group.  We both can afford it, and if it has no impact on our financials, so be it. 

What gets lost sometimes in this forum is discounting what other people's true "happiness" things are.  We presume that fancy dinners are not worth it, because most people don't actually gain much lasting enjoyment from them.  But there are some people who truly relish those experiences.  Fine.  I'm not one of them, but their wanting a fancy dinner is no different than my getting a better than baseline bike because I really enjoy riding a bike fast--it makes me truly happy.

If you ever go to an event where people are tracking their cars, you will meet some of the happiest, most content people on the planet.  It's a ridiculously expensive hobby, and not one good for the environment, but the fact that you may not get it doesn't mean that the people doing it aren't truly having a meaningfully happy experience.  Like someone climbing a mountain, traveling to a secluded island, etc.  What is being factored out of the equation in OP's post is the financial cost--because it either is insignificant, or more importantly, OP's friend has decided it's worth it to him.

We can debate tradeoffs, but this post isn't about tradeoffs.  It's about one person doing something he really wants to do, at a cost that for him seems totally worth it.  Is your new bike, fancy dinner, trip to climb a mountain, trip to see a foreign country, trip to secluded island any different--if you decide it's worth the cost and it does actually bring you happiness?

Btw, I'm removing the environmental impact in this entire discussion because that raises issues that are almost impossible to control for, and it's not really the main point here.  If you're not sure, just substitute in the following: "OP's friend wants to work 2 more months to buy a new race bike so he can ride with the fast group 3-4 times per week, and his finances are otherwise flawless."  Where do you come out on that?

P.S.  I used to track a fast car.  We're now a one-car family, and I typically take metro, ride the bike, walk, and would never buy an expensive (and likely, any) car again.  But I recall how much fun it was. 

Making Cookies

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Re: OMY for clown car
« Reply #39 on: August 29, 2016, 03:31:06 PM »
I get it. Dude loves his Bentley.

1. Buy a 2006 flying spur for 1/3 the price
https://www.cargurus.com/Cars/l-Used-2006-Bentley-Continental-Flying-Spur-c5280

2. Put this year's rims on it ($4-5K maybe?)

3. Put an updated car computer / GPS / bluetooth in it, high end - maybe another $1000?

4. Enjoy and put $200,000 in your pocket.

Thing is, "classic" cars like Bentleys generally age well and don't look dated 10 years on. Here's a 2006 interior. Still looks luxurious to me. Pass the grey poupon?

 

Heck, that thing looks just like my grandfather's Crown Vic! (j/k)

gimp

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Re: OMY for clown car
« Reply #40 on: August 29, 2016, 03:34:39 PM »
Quote
If it was me, I'd get a new ferrari. Buy the biggest warranty I could. Then see how much Ferrari likes me after I test their warranty out. They offer a three year unlimited mile bumper to bumper warranty, and I believe up to 7 years of basic stuff and 12 years of powertrain if you elect to buy it. I would make it my full-time job to drive. I figure I could easily hit 100k miles a year just absolutely enjoying the car. See if they offer to buy the car back just to get rid of me when they see the odometer at 275k miles and still six months left in the warranty.

They offer warranties that don't have a mileage cap? Wow.

Hey Miles, great username.

They do in fact offer unlimited mile warranties.

Most owners are, well - they're rich people who want a rich person toy and then they baby that toy. Putting 10k miles a year on a ferrari is considered rather high; 3k is much more normal. A 30k mile one would be considered somewhat high mileage. This is part of the reason I think it'd be absolutely hilarious to put 300k on it in three years. It's a work of art, sure, but it's one that's meant to be driven - so let's bloody well drive it.



I agree with Cycling and disagree with Digital. The dude already has all the status he wants. He doesn't want a bentley for status, he wants it because he loves cars and it's a great car (if it's not falling apart.) Everyone has a few things in life they're willing to spend what seems like excessive time earning towards and enjoying.

Would you shit on someone who wants the extra money so they can sail around the world, or bike across the country, or bum around europe, or climb one of the tallest peaks, or fund a music album, or afford being able to volunteer?

As long as the dude is financially set, I don't think it much matters what he does with a few extra bucks. I'd probably judge him if he converted it to powder and snorted it, but other than that, meh.

Digital Dogma

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Re: OMY for clown car
« Reply #41 on: August 29, 2016, 04:07:33 PM »
I make lots of assumptions gimp, also Im judging those lifted trucks, bentlys, tattoos, and Im giving out lots of low scores. There is no reasoning behind it beyond idle banter.

gimp

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Re: OMY for clown car
« Reply #42 on: August 29, 2016, 04:34:26 PM »
I've started to appreciate people's interests more. As long as their lifted truck sees mud, their bentley gets driven, their tattoo ain't shit, I've stopped caring.

I still judge, but I try to judge less.

Idle banter is always fair game.

SeaEhm

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Re: OMY for clown car
« Reply #43 on: August 29, 2016, 06:21:53 PM »
He is proposing to work one more year in order to fund a clown car.
What do you reckon?

I reckon that many people don't read every line.

Instead of retiring one year, he is going to work another year TO FUND his extravagant purchase.  Now with that extra year of working, he is gaining $150k in earned income because he is not needing to use any of his $5mm net worth.  Earn $300k net spend $150k on any purchase equates to $150k more than if you didn't work and spent $0 for the year.


human

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Re: OMY for clown car
« Reply #44 on: August 30, 2016, 01:54:38 AM »
The real problem I see with this is his choice in cars. Get a lambo or ferrari or even a hellcat, why a bently? Fail.

SnackDog

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Re: OMY for clown car
« Reply #45 on: August 30, 2016, 04:12:11 AM »
Lots of interesting perspectives in here ranging from "Buy a Ferrari" to "MMM is killing the planet".

I reckon he will buy this car, as he is determined it seems. We'll see how it plays out.  I disagree that he can afford it just based on his savings as I don't see that level of spending supported by his annual withdrawals after taxes.  I'm pretty sure he realizes that as well since he is opting to work one more year to get the cash for this splurge.  That really is the crux of the issue here - working a year for the car. It really doesn't matter if he has $5MM, $50MM or $5,000 saved or what his debt situation is.  The fund for the car is coming exclusively from the extra year of work with plenty left over to cover operating costs for the thing.  He can make a little car graph on the wall at work. By March, he's paid for the engine, July the interior, November the fuzzy dice, etc.

My challenge to him is this -  has he exhaustively considered all the alternatives and considered the trade-offs?  Will he enjoy working one more year? What will it mean for his health?  Could he spend far less and get as much enjoyment from an older car or less exclusive one?  Would he prefer a $150,000 Winnebago he could live and travel in while renting out the house?  How about a $150,000 cruise around the world - 120 nights on the Queen Mary 2 in the penthouse suite?

I know he is excited about the Bentley brand, the W12 motor and the luxury interior. I don't think he cares at all about his image in the car or what anyone else thinks, but I am concerned he will look a bit of a fool in such a car. These things are best reserved for celebrities or sports stars, not some guy who slogged at his desk 30 years.  It's a bit Walter Mitty for me.

GuitarStv

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Re: OMY for clown car
« Reply #46 on: August 30, 2016, 05:56:06 AM »
Well, if we can forgive MMM for his follies, then, perhaps, somehow, we can find the strength to forgive Snackdog's colleuge for theirs.  Any data on how a $150k car is worse for the environment and thus every living thing on the planet than a $4k car. I would guess any difference is negligible.

I forgive MMM his mistakes, but I certainly wouldn't cheer him on while making them.  I would forgive this guy for buying a Bentley, but if the decision hasn't been made yet I certainly don't have to try to do something that would encourage a poor choice.

Regarding damage to other people . . . the fuel economy of 2016 Bentley cars ranges from 13 - 19 combined mpg.  (https://www.fueleconomy.gov/feg/bymake/Bentley2016.shtml)  The fuel economy of a 2016 Corolla is between 31 - 34 . . . so about twice as efficient, and the Corolla isn't exactly the best gas sipper you could buy.  (https://www.fueleconomy.gov/feg/bymodel/2016_Toyota_Corolla.shtml).

Making Cookies

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Re: OMY for clown car
« Reply #47 on: August 30, 2016, 08:12:16 AM »
On the topic of working another year to buy a car, what the guy is doing isn't that different from us regular people working another year to buy a grocery getter car.

Metric Mouse

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Re: OMY for clown car
« Reply #48 on: August 30, 2016, 10:27:06 AM »
Well, if we can forgive MMM for his follies, then, perhaps, somehow, we can find the strength to forgive Snackdog's colleuge for theirs.  Any data on how a $150k car is worse for the environment and thus every living thing on the planet than a $4k car. I would guess any difference is negligible.

I forgive MMM his mistakes, but I certainly wouldn't cheer him on while making them.  I would forgive this guy for buying a Bentley, but if the decision hasn't been made yet I certainly don't have to try to do something that would encourage a poor choice.

Poor choices abound in this world, that is for sure.

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Re: OMY for clown car
« Reply #49 on: August 30, 2016, 09:07:28 PM »
Sounds like status seeking behavior, the car is not a form of transportation in that case, its a "lifestyle" proclamation to the rest of the world. He wants everyone around him to recognize that he has made it to a point in his life where he can blow cash out his tailpipe if he wants to.

I think thats what the french call nuveaux riche

If you are referring to "New Money" vs "Old Money" this doesnt really apply. This guy has apparently worked for everything he has and is aware that he will need(maybe want) to work another year in order to justify such an expensive automobile. To me, that's not "New Money" per se.

To me, "New Money" is the rapper, football player, startup CEO, lottery winner and such, who gets a boatload of money rather quickly and blows it on stupid shit trying to impress people who he shouldn't be worried about.

This guy, on the other hand, is a person I would rather have a conversation with a figure out how he did it. Good financial role model IMHO.

"New Money" is someone who acquired their wealth while working(or working it ;), within their lifetime. Not inherited. It's money made within one generation.  It doesn't mean they spent it all or are frivolous with it. It just was not inherited money. The Rockefellers, Vanderbilts, the queen of England etc. are old money. Bill Gates, Mark Zuckerberg, Warren Buffet, etc. are new money.