Hobbies and where to draw the line financially?

[Mrkineticz]

Hey  everyone I have been fighting with myself on what to do with my hobby/ passion for cars. Before finding mmm 2 months ago I bought a 1974 bmw 2002 to restore. I have to spend money on this car to restore. I know if i spend 10-15k on this car i will get at least 80% back if i ever dcecide to sell. I used to be a mechanic in my younger years, went to school for it and i want to maintain the skills as my hobby. When i am FIRE I plan to keep up with this hobby. I believe i'm mustachian but can still improve. I have a car loan and a student loan that I will also be paying off this year as well.  I wont be dropping all the money at once. THis restoration will be done within 2 years time. I dont plan on getting the car done all at once.This car will be my weekend car with my fiance/ wife to be. I know having 3 cars is not mustachian but this is something I will be enjoying .


questions
-can i indulge and not feel bad im spending that much money?

Full restoration would cost 9-15k (i know face punch)

stats about me
- 75k +29k travel reimbursement (me)
-80k (my soon to be wife)
-maxing out 401k and roth ira this year (me /fiance)
-no credit card debt.
-126k mortgage @ 3.375% 30 year
-57,000 @3.75% 30 yr rental property that makes me $400 monthly on top of mortgage
-25k to buy another house and convert my primary to a rental
-13k student loan ( my fiances loan @3.33%) currently paying $661 monthly (paying this off this year
-16k car loan @ 8% (paying off this year)

[larmando]

The hard rule is "you do anything you want, as long as it's in line with your budget and priorities". How much is the car "as is" worth? (e.g. is it worth selling it and just paying off debt? keep in mind that any value in the car you're paying right now 8%, and as of later 3.75%, and that there will always be old cars to buy)

What are your priorities w.r.t. reaching FIRE? How much time will the cost of keeping, running, insuring 3 cars add? How does it fit with your other expenses?

[frugaljo]

nice Mrkineticz jealous of your property portfolio :)

keeping your skills up is a great idea especially if you think you could make your hobby of car repairing as way to bring in extra cash. is that you are thinking of doing? do you maintain your other cars yourself?

 IMO I would probably focus on getting rid of the car loan (8% ouch) in a couple of months if possible.

[gooki]

For your hobby, I'd be inclined to prevent your garage becoming a car museum. I.e. Sell your last restoration before jumping into the next one.

[Mrkineticz]

The hard rule is "you do anything you want, as long as it's in line with your budget and priorities". How much is the car "as is" worth? (e.g. is it worth selling it and just paying off debt? keep in mind that any value in the car you're paying right now 8%, and as of later 3.75%, and that there will always be old cars to buy)

What are your priorities w.r.t. reaching FIRE? How much time will the cost of keeping, running, insuring 3 cars add? How does it fit with your other expenses?

How much is the car "as is" worth? (e.g. is it worth selling it and just paying off debt?
2010 prius with 68k miles. I use this for my job and I drive 500 miles a week I will be paying this off by the end of the year. the student laons will be paid off this year as well.. besides my mortgage I will have no other debt by the end of the year.

What are your priorities w.r.t. reaching FIRE?
I intend to FIRE by 45. my fiance is totally on board with this.
after I pay off my loan and car this year I play on paying off my house of 126k
Im planning to buy rental properties and invest in stocks.
How much time will the cost of keeping, running, insuring 3 cars add?
2010 prius (my car)
2012 ford focus (fiances fully paid)
1974 bmw 2002 (not insured)

my car and fiances car are very low maintenance at this time. i just do the basic oil change/tires/fluids.

How does it fit with your other expenses?
my expenses are relatively cheap this is my break down per month
internet $45
cell $ 130 (for 2)
food $400 ( for 2)
student loan $661
car payment $ 327 (after wedding in may will be paying it off)
gas $ 90 (i drive 2k miles a month)
car insurance $80
home gas $37
mortgage $1358
gym $21

nice Mrkineticz jealous of your property portfolio :)

keeping your skills up is a great idea especially if you think you could make your hobby of car repairing as way to bring in extra cash. is that you are thinking of doing? do you maintain your other cars yourself?

 IMO I would probably focus on getting rid of the car loan (8% ouch) in a couple of months if possible.

I got lucky with my interest rates! I do think it can be an extra side hustle to bring extra cash. Yes i maintain my cars myself and prevent any major issues from occuring. im 1 month away from getting married and shortly after my wedding is when I plan to pay off the car. We both dont have kids yet. we are both frugal and are not consumer driver people.

[Le Poisson]

I have an old Mercedes sitting in the driveway. Nearly the same story. I think its going to be sold. I just can't justify the expense of restoring it. Once complete, I'll have spent $10,000 on a $5,000 car.

Better to buy a fully restored car and let someone else take the loss.

In your cost to restore, don't loose sight of the nickel and dime items. They add up fast!

[MountainBeard]

Havent priced 2002's in a while, but would it be better to start with a roundie for a full reno?

[horsepoor]

As someone with an expensive hobby, I will chime in:  You probably have a pretty good idea of your FIRE number and what it will take to get there.  You also seem to have a good handle on the cost of this car reno vs. how much it will sell for in the end.  Now you have to forecast 1) whether you are really going to do the work on it 2) really going to sell it and 3) whether you're going to do this at a loss every couple years.  Say you're going to take a $2400 loss every two years, plus the foregone opportunity to invest the money in the market.  Simply plug the numbers in and see what investing $100 less each month does to your FIRE date, and whether that feels worthwhile for you.  I spend considerably more than that on my horse hobby, but plugging in the numbers, I can still RE at 50 without a problem, and engage in the hobby as much as I want in the meantime.  If I sold my horses, truck and trailer tomorrow and did a side hustle instead, I could probably RE in like 8 years or less, but wouldn't be very happy.  Working another 5 years and enjoying my hobby and becoming a more skilled horseperson is a better balance for me.

[Mrkineticz]

I have an old Mercedes sitting in the driveway. Nearly the same story. I think its going to be sold. I just can't justify the expense of restoring it. Once complete, I'll have spent $10,000 on a $5,000 car.

Better to buy a fully restored car and let someone else take the loss.

In your cost to restore, don't loose sight of the nickel and dime items. They add up fast!

Fully restored bmw 2002s fetch for about 12-20k depending on what kind you want. I feel as if I have a good base already the big cost is just the restoration and paint. I will be dropping the engine in and wiring the electrical.  Im not well experienced with body work and would like to outsource thst to someone more knowledgeable.

As someone with an expensive hobby, I will chime in:  You probably have a pretty good idea of your FIRE number and what it will take to get there.  You also seem to have a good handle on the cost of this car reno vs. how much it will sell for in the end.  Now you have to forecast 1) whether you are really going to do the work on it 2) really going to sell it and 3) whether you're going to do this at a loss every couple years.  Say you're going to take a $2400 loss every two years, plus the foregone opportunity to invest the money in the market.  Simply plug the numbers in and see what investing $100 less each month does to your FIRE date, and whether that feels worthwhile for you.  I spend considerably more than that on my horse hobby, but plugging in the numbers, I can still RE at 50 without a problem, and engage in the hobby as much as I want in the meantime.  If I sold my horses, truck and trailer tomorrow and did a side hustle instead, I could probably RE in like 8 years or less, but wouldn't be very happy.  Working another 5 years and enjoying my hobby and becoming a more skilled horseperson is a better balance for me.

Thanks for chiming in horsepoor. I really enjoy working on cars. I will do the engine work and electrical part just not the paint and rust repair. I don't foresee a reason to sell it once done just keep it and maintain it.  Once the major resto is done I don't see any more mods I would have to add into it. Just drive it and go. My fire date would be around 45.. latest would be at 50.  whee or how can I plug the numbers to see if it will be worthwhile for me to keep putting money into my hobby

[Bob W]

Not to dissuade you from the Mercedes but around here we have several salvage yards that sell wrecked,  salvage title trucks.   My son bought one last year and had a local body work guy do the work.   He has 9-10K all in and could sell it today for 15K.    He surfs the net for low prices on parts and does some of the stuff himself such as installing air bags. (those are pricey). 

He is selective about the ones he buys and generally waits until a truck comes up that needs mostly body work.   The last one needed front work.  Bumper, hood, quarter panels, air bags, radiator and a few misc.   He didn't spend much time and had the project done in 2 months.   

So if you're into car work this is probably a cash positive option for you.   You could make serious money flipping trucks in this manner.   

It appears that truck buyers are not overly concerned with the salvage titles as long as there is a decent discount off of book. 

[Mrkineticz]

Bob w that's somewhatthe plan as a sidehustle/ hobby but this vehicle I'm going to pay for is going to be mine with an option to sell in the future

[Texas_Student]

8% on an auto loan?!? That is outrageous. Have you looked into refinancing it for a lower rate.
The credit union I am with gave me my loan at 1.65% and I am still booking to pay that off as quickly as possible.

I would say paying off that higher rate car should be top priority before spending on the new car.
I have a '75 Chevy Nova rusting at home I am looking to restore, so I know the struggle of wanting to get under the hood.

[Mrkineticz]

Texas student

I am paying the car off asap this year my wedding is in mid may so I have to wait until that's over to pay off my car.. I know 8% is outrageous!!! Lol thanks man I'm glad u feel the same thing

[Gone Fishing]

It's all about what you want. 

Some thoughts:

Do you have other hobbies, too?  Or is this it?  If you have multiple hobbies, it may be beneficial to take a hard look at them and pick one or two.  Then do them one at a time to save.  Set a personal rules, like perhaps that you will have to sell this car to get the next.
 
Like someone else mentioned, keep track of the nickles and dimes.  This will help temper your desire to launch into the next project when you are done with this one.

Do you plan on having kids?  If so, your free time will shrink dramatically, might be nice to have one last project without 1000 distractions before fatherhood.

   

[horsepoor]

I have an old Mercedes sitting in the driveway. Nearly the same story. I think its going to be sold. I just can't justify the expense of restoring it. Once complete, I'll have spent $10,000 on a $5,000 car.

Better to buy a fully restored car and let someone else take the loss.

In your cost to restore, don't loose sight of the nickel and dime items. They add up fast!

firecalc should do it, or google retirement calculator.  You can add your current stash and different returns and savings contributions.

Fully restored bmw 2002s fetch for about 12-20k depending on what kind you want. I feel as if I have a good base already the big cost is just the restoration and paint. I will be dropping the engine in and wiring the electrical.  Im not well experienced with body work and would like to outsource thst to someone more knowledgeable.

As someone with an expensive hobby, I will chime in:  You probably have a pretty good idea of your FIRE number and what it will take to get there.  You also seem to have a good handle on the cost of this car reno vs. how much it will sell for in the end.  Now you have to forecast 1) whether you are really going to do the work on it 2) really going to sell it and 3) whether you're going to do this at a loss every couple years.  Say you're going to take a $2400 loss every two years, plus the foregone opportunity to invest the money in the market.  Simply plug the numbers in and see what investing $100 less each month does to your FIRE date, and whether that feels worthwhile for you.  I spend considerably more than that on my horse hobby, but plugging in the numbers, I can still RE at 50 without a problem, and engage in the hobby as much as I want in the meantime.  If I sold my horses, truck and trailer tomorrow and did a side hustle instead, I could probably RE in like 8 years or less, but wouldn't be very happy.  Working another 5 years and enjoying my hobby and becoming a more skilled horseperson is a better balance for me.

Thanks for chiming in horsepoor. I really enjoy working on cars. I will do the engine work and electrical part just not the paint and rust repair. I don't foresee a reason to sell it once done just keep it and maintain it.  Once the major resto is done I don't see any more mods I would have to add into it. Just drive it and go. My fire date would be around 45.. latest would be at 50.  whee or how can I plug the numbers to see if it will be worthwhile for me to keep putting money into my hobby

[Mrkineticz]

It's all about what you want. 

Some thoughts:

Do you have other hobbies, too?  Or is this it?  If you have multiple hobbies, it may be beneficial to take a hard look at them and pick one or two.  Then do them one at a time to save.  Set a personal rules, like perhaps that you will have to sell this car to get the next.
 
Like someone else mentioned, keep track of the nickles and dimes.  This will help temper your desire to launch into the next project when you are done with this one.

Do you plan on having kids?  If so, your free time will shrink dramatically, might be nice to have one last project without 1000 distractions before fatherhood.

 

thanks for the ideas . my other personal hobby is carpentry. I like to fix stuff around the house and have been doing most of my renovations at home. I think setting personal rules is a good idea. I dont want to have 20 cars .. just cars that I will be needing.

I do keep track of the nickels and dimes because i know it does add up.

I plan on having kids but not for another year or 2 . i officially get married on may 16th and will have plenty of time getting this car finished by then. you are correct about the distractions part . Im a linear type of person that thinks very futuristic. I know that i have about 1.5 -3 years before we have kids and I need to use this time to get this vehicle done so I have more time when my first child pops out

[otter]

I understand, brother :) Given your overall financial picture, as laid out in your post, and your mechanical ability, it does not seem like an extravagant use of money. You'll have a fun car you can drive for as long as you like, and at the worst won't lost much money on if you sell it in five years. Tho I do suggest that when you say "I'll have it done in 2 years" you should automatically double that number.

My own such car is my Fiat Spider, a car that my late dad got us as a father-son project when I was in 9th grade. So I've had it for ~24 years, but by now it has reached driving-restoration-project status and needs plenty of work. My advantage is that I have very little money in the car (it was given to me, etc.) but it needs bodywork and bodywork is always expensive. I would be better off with a car with a perfect shell, but I am terribly attached to this particular car.

[Torgo]

Bit of a different situation here... grad student with limited cash flow but a few tens of K saved up, but seriously considering shelling out $2k for a ridiculawesome telescope to augment the small one I've maintained for 13 years...

[kpd905]

That car loan is horrible.  Can you get rid of it in the next month or two instead of "this year"?

[Mrkineticz]

That car loan is horrible.  Can you get rid of it in the next month or two instead of "this year"?

I would love to but I am getting married in may. After my wedding I csn sit down with my wife and figure out where our money will be going to after expenditures. Getting it paid off this year is better than 3 or 4 years in my opinion!

[CommonCents]

That car loan is horrible.  Can you get rid of it in the next month or two instead of "this year"?

I would love to but I am getting married in may. After my wedding I csn sit down with my wife and figure out where our money will be going to after expenditures. Getting it paid off this year is better than 3 or 4 years in my opinion!

Do you have the cash to do so later this year?  If so, then I'd suggest stopping the 401k savings temporarily, paying off the loan quickly and then jacking back up the 401k savings to hit the max for the year.  (This assumes that you're not getting a match that is contingent on a certain amount each month as opposed to a match for the year.  If so, readjust to do the min required to get the match.)