Author Topic: What would be the right move and what to do?  (Read 669 times)

deviation01

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What would be the right move and what to do?
« on: August 27, 2020, 09:49:51 AM »
Hi everyone,

I have a dilemma on my hands.  I believe I know the answer but it is a difficult decision.  I have a gorgeous 2019 Mustang Bullitt thats paid off.  Total out  the door price was 43k.  I also had it ceramic coated professionally which was steep so for math purposes lets say 45k total for the car.  Insurance for the car is 2k a year (one of the main issues).  Also its not cheap on gas probably $150 a month and I don't even drive that much.  My financial situation is not bad.  I have no debt and a decent job.  I do however love investing securely mostly into blue chip dividend paying stocks.  I do want to own a home as well in the next 5-10 years depending on work and life.

Used car prices have been going up as the demand has been growing.  I had a dealership offer me 41k for the car.  For a year of having it that would be 4k depreciation loss. (Not terrible)  The car will depreciate even more down the line I believe?  I am debating of selling and buying another reliable car around 20-25k and pocket the rest.  My issue is that I love the car and it is part of my small YouTube channel.  (generates some income).  I also enjoy cars and this car keeps me very happy (I know material things).  I decided to ask you guys what you think and give me some suggestions?  On one side this material thing keeps me happy on the other side it is standing on potentially having another 16-20k invested.  (Return on my portfolio has been about 7-8%) In addition I will save on gas and insurance money. 

What do you say?

soily

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Re: What would be the right move and what to do?
« Reply #1 on: August 27, 2020, 10:25:11 AM »
I'm by no means an expert as I am still early in my MMM conversion, but that car is for a rich person. Without looking at you income, I'd say you are living above your means. My nonjudgemental advice is to sell the car and buy a cheap DD (~10k). If you still have the sports car itch after a couple months (let the hedonic adaptation take hold), buy a cheaper sports car that won't be your DD. Try to isolate your motivation for owning the mustang (speed? looking cool? convertible?) and find a cheap hobby car that fills that void.

joe189man

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Re: What would be the right move and what to do?
« Reply #2 on: August 27, 2020, 10:41:22 AM »
is your Youtube channel revenue covering the $2k a year insurance and $150 a month in fuel? If not maybe sell it and find another car that you can build up for the youtube channel that would drive views, ask your viewers what they would want to see you build and that would bring you joy?

i think you can find plenty of fun car build options to play with and $41k is a good chuck to get a Daily Driver and a project

you own it outright so you have lots of options

deviation01

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Re: What would be the right move and what to do?
« Reply #3 on: August 27, 2020, 10:53:46 AM »
is your Youtube channel revenue covering the $2k a year insurance and $150 a month in fuel? If not maybe sell it and find another car that you can build up for the youtube channel that would drive views, ask your viewers what they would want to see you build and that would bring you joy?

i think you can find plenty of fun car build options to play with and $41k is a good chuck to get a Daily Driver and a project

you own it outright so you have lots of options


Thats a great way of looking at it as the YouTube revenue does not cover the expenses of running the car.  Lots to ponder.

ketchup

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Re: What would be the right move and what to do?
« Reply #4 on: August 27, 2020, 11:03:25 AM »
Demand in the used market for cars inflating like that is a gift.  I say take it.  41k for a car you bought a year ago new for 45k is pretty much unheard of.  I'm doing something similar with real estate (taking the gift of the weird COVID housing bubble and cashing out two empty houses that have grown in value through no work of my own).

I'm more of a 2-3k car guy than a 20k car guy, but a 20k car would absolutely be a win for you to free up some cash and boost your investments.  Moreso the lower your household income (we're around 120k/yr with two ~2k purchase price cars).

terran

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Re: What would be the right move and what to do?
« Reply #5 on: August 27, 2020, 02:54:04 PM »
You might try selling privately. If a dealer is offering you $41k it's likely that either isn't the full story (it's a teaser to get to finance an even more expensive car) or you can get more by selling it to a consumer.

MrThatsDifferent

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Re: What would be the right move and what to do?
« Reply #6 on: August 27, 2020, 03:30:37 PM »
Be brave. You know the answer, youíve been reading and learning and you see a better path, now act. Yes, itís uncomfortable but it will complete your growth. This sacrifice will teach you so much, you donít need everything now that you thought you did. It will sink in. You will feel powerful for making the difficult but smart choice. Build your stache, get to where you want to be and maybe, later down the line when youíre free and have the opportunity and means to do it again, you revisit this car and truly enjoy it. Take your ego and emotion out, and manage your finances like you would for a company.

seemsright

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Re: What would be the right move and what to do?
« Reply #7 on: August 27, 2020, 03:58:05 PM »
This is not about the car. This is about what is your ultimate goal? And how fast do you want to get there? You can have anything you want you just cannot have everything you want.

I am not a car person. I flat out do not care what I drive as long as it goes and I do not have to deal with it being broken down.


slappy

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Re: What would be the right move and what to do?
« Reply #8 on: August 28, 2020, 07:07:16 AM »
This is not about the car. This is about what is your ultimate goal? And how fast do you want to get there? You can have anything you want you just cannot have everything you want.

I am not a car person. I flat out do not care what I drive as long as it goes and I do not have to deal with it being broken down.

Car people are a different breed I think.

OP, you say the car is not generating enough youtube revenue to cover expenses. Can you change that?

Also, I feel like the recurring expenses is not the real issue here. The real issue is that you see a chunk of cash ($20kish) that you can take and invest.

My answer would be to get rid of the care, but I don't care about cars. I would rather have the $20k. This forum can be weird sometimes. Sometimes its "if it brings you true joy and you can afford it, then do it." Sometimes its "that car is for a rich person". I think it will end up being a personal decision. You could always post a case study if you want.

FIRE 20/20

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Re: What would be the right move and what to do?
« Reply #9 on: August 28, 2020, 09:55:52 AM »
I can definitely empathize.  I was in a roughly similar place, with a car that was even more expensive but insurance and fuel costs were lower.  I was also able to offset some of the running costs by having a co-driver for autocross and track days, not youtube videos.  All that is to say I definitely understand where you're coming from.  If you want more details send me a PM; I usually keep additional details off the forums because the car was made in small enough numbers that it would make me identifiable.

For me, about a year after finding MMM and FIRE I finally sold the car.  Overall I'm happy with the decision.  It accelerated my time to FIRE, and FIRE life has been even better than I expected.  My happiness level now without work and without the car is far higher than it would be with work and with the car.  Yes there are days when I think about how nice it would be to take a drive just to enjoy the drive, but those are vastly outweighed by the happiness that I get from being FI.  Even before I FIREd I was happy with the decision because I was in a better financial position.  Knowing that the money that had been sunk into the car was growing and getting me closer to my goals definitely offset the sadness at seeing the empty space in the garage. 

I have a question; what do you enjoy about the car?  Do you like going to Cars and Coffee events?  Car shows?  Autocross?  Drifting?  Drag races?  Weekend drives?  The community?  In almost every case, there's a cheaper way to do it.  For me it was Autocross and track days, and if I wanted to I could have bought a car for 1/10 the price and still have a blast.  In addition, getting a much cheaper car and doing the work yourself to get it up to snuff for whatever it is you want to do could be vastly more fulfilling and will give you skills and tools that you can use for each subsequent car you buy.  That way you may be able to have your cake and eat it too - enjoy whatever you love about cars plus take a big step forward on your financial and life goals. 

red_pill

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Re: What would be the right move and what to do?
« Reply #10 on: August 28, 2020, 10:44:05 AM »
I ditched my albatross (a leased Audi that was sooooo fun to drive) and we bought a lightly used $20K car instead.  It was, without a doubt, the best move ever.  Hard to do, but rip off the bandaid and don't look back.

joe189man

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Re: What would be the right move and what to do?
« Reply #11 on: August 28, 2020, 11:15:57 AM »
I ditched my albatross (a leased Audi that was sooooo fun to drive) and we bought a lightly used $20K car instead.  It was, without a doubt, the best move ever.  Hard to do, but rip off the bandaid and don't look back.

i had a similar situation 10-12 years ago, i had big expensive diesel trucks for no reason other than i loved them, i realized the truck was killing me financially and traded it in at a loss for a mazda 3 hatchback and havent looked back sincei havent had a car payment in 4 years and its awesome.

on the other hand any of the diesel trucks i purchased, could today be sold for that same purchase price even after 10 years, strange market for them.

sell the mustang, get a used mazda 3 hatch to drive and a used miata to turn in to a race car