What income do you need to consider purchasing a $10k watch? $100k car?

[CombatChuk]

This thread is kinda funny, it's almost like it's directed at me.

In 2014 I bought my first Rolex a YachtMaster with the blue face. Been wanting a Rolex forever and this one fit my needs and looked terrific. I paid cash for it. It was a grey market model, so instead of paying $11500 new (plus taxes) for it, I paid $8750 for it. It was brand new, never worn. But I saved quite a bit of money. Enough where I felt foregoing the Rolex warranty was worth it. I wear it everyday and I Love it.

In 2015 I bought my wife a 2015 Tesla Model S (MSRP $102470) brand new. No negotiation, I sold my paid off Jeep Wrangler and put down quite a bit of money (about 41% down) for a fairly reasonable payment of $950 a month. Lease wasn't an option because we put so much mileage on it and got the full $13500 worth of rebates (federal and state) that went into the principal so I'll be paying it off early. Plus the Wife likes to keep her cars for a while.

There really wasn't so much of an "a-ha!" moment when we decided that we could afford these things. Felt kind of gradual, and between raises in jobs for her and new jobs and promotions for me (I work in Sales for a telecom company) we've just doubled our earning power in the past few years.

Between my wife (34 years old) and I (32 years old) we pull just under 300k a year on straight income... We have several forms of savings and investments that we contribute monthly to

We each contribute our company's 401k program
I buy stock through my company's program
Brokerage account for long term savings and expenditures (major home renovations, future major purchases, higher return savings, no penalty to withdraw. Just capital gains tax)
Contribute to our IRA accounts from 401ks we've rolled over from previous employers
Contribute to our kids' 529 accounts

I suppose the key is, outside of buying a flashy watch for me and some nice diamond jewelry for her and the Tesla. We don't live day to day that expensively. We live in a house that's pretty modest compared to what we make, since we bought it in the bottom of the real estate market in 2011 and we live in a state with fairly inexpensive living costs (Colorado). So many of the friends we have bought much bigger houses once their income went up that they ended up house poor. But we live in a nice cul-de-sac in a great location, and I hate moving so we ended up in great shape by staying. Last year I did a full home remodel, so it looks like a million dollars a fraction of the price of new home. Although a 3rd car garage would have been nice... Vacations (once a year), fairly big expenditures ($4000-$7000 once a year) are covered by my monthly commission checks. Don't even have to dip into savings, I don't keep that much in liquid savings (around $15k). Any months were I don't have a vacation or big expense I just shovel that commission money into my brokerage account. All of my fixed expenses are easily covered by mine and my wife's base salary, and investments

TLDR;

Earn a lot (it is a lot, but it isn't the millions a year you think you need)
Invest in a whole bunch of different accounts
Live fairly modestly
Have fun

 

[MixMasterTang]

This thread is kinda funny, it's almost like it's directed at me.

In 2014 I bought my first Rolex a YachtMaster with the blue face. Been wanting a Rolex forever and this one fit my needs and looked terrific. I paid cash for it. It was a grey market model, so instead of paying $11500 new (plus taxes) for it, I paid $8750 for it. It was brand new, never worn. But I saved quite a bit of money. Enough where I felt foregoing the Rolex warranty was worth it. I wear it everyday and I Love it.

In 2015 I bought my wife a 2015 Tesla Model S (MSRP $102470) brand new. No negotiation, I sold my paid off Jeep Wrangler and put down quite a bit of money (about 41% down) for a fairly reasonable payment of $950 a month. Lease wasn't an option because we put so much mileage on it and got the full $13500 worth of rebates (federal and state) that went into the principal so I'll be paying it off early. Plus the Wife likes to keep her cars for a while.

There really wasn't so much of an "a-ha!" moment when we decided that we could afford these things. Felt kind of gradual, and between raises in jobs for her and new jobs and promotions for me (I work in Sales for a telecom company) we've just doubled our earning power in the past few years.

Between my wife (34 years old) and I (32 years old) we pull just under 300k a year on straight income... We have several forms of savings and investments that we contribute monthly to

We each contribute our company's 401k program
I buy stock through my company's program
Brokerage account for long term savings and expenditures (major home renovations, future major purchases, higher return savings, no penalty to withdraw. Just capital gains tax)
Contribute to our IRA accounts from 401ks we've rolled over from previous employers
Contribute to our kids' 529 accounts

I suppose the key is, outside of buying a flashy watch for me and some nice diamond jewelry for her and the Tesla. We don't live day to day that expensively. We live in a house that's pretty modest compared to what we make, since we bought it in the bottom of the real estate market in 2011 and we live in a state with fairly inexpensive living costs (Colorado). So many of the friends we have bought much bigger houses once their income went up that they ended up house poor. But we live in a nice cul-de-sac in a great location, and I hate moving so we ended up in great shape by staying. Last year I did a full home remodel, so it looks like a million dollars a fraction of the price of new home. Although a 3rd car garage would have been nice... Vacations (once a year), fairly big expenditures ($4000-$7000 once a year) are covered by my monthly commission checks. Don't even have to dip into savings, I don't keep that much in liquid savings (around $15k). Any months were I don't have a vacation or big expense I just shovel that commission money into my brokerage account. All of my fixed expenses are easily covered by mine and my wife's base salary, and investments

TLDR;

Earn a lot (it is a lot, but it isn't the millions a year you think you need)
Invest in a whole bunch of different accounts
Live fairly modestly
Have fun

I see you didn't mention kids yet! I just turned 38 today (am divorced, so single and pay child support), but I my kids are 15 and almost 12. The 1st 5-6 years of each of their lives cost me at least 65k each and I am not sure it got cheaper from there! So like you say it doesn't take as much as you think (unless you have kids). But on the positive note I have never spent more than 20k on a car (except when I was married on my wife). That being said I'll be pulling in over 200k by myself once both of the kids are out of school and I won't have any debt at all (even mortgage) but I still won't buy a car over 30k but I may splurge on a rolex.

 

[CombatChuk]

I see you didn't mention kids yet! I just turned 38 today (am divorced, so single and pay child support), but I my kids are 15 and almost 12. The 1st 5-6 years of each of their lives cost me at least 65k each and I am not sure it got cheaper from there! So like you say it doesn't take as much as you think (unless you have kids). But on the positive note I have never spent more than 20k on a car (except when I was married on my wife). That being said I'll be pulling in over 200k by myself once both of the kids are out of school and I won't have any debt at all (even mortgage) but I still won't buy a car over 30k but I may splurge on a rolex.

lol I do have two kids, they're 8 and 5 years old. Yes, not paying for child care was a huge boon for us this year (my youngest started kindergarten this year). Saves us about 650 a month in what we were paying last year.

Rolex is totally worth it IMO. Never get tired of wearing it. I'm handing it down to my Son when I go, probably will get a Daytona in a couple of years to start a collection.

 

[s0me0nesmind1]

Life is short, if you want to buy it, buy it! WHat ever makes you happy. You can't take money with you when you past.

What about when you want to stop working? Deeeeeeeeerp.

Honestly, I wouldn't justify a $10k watch or a $100k car regardless of my income. The only exception is if I simply had some so damn much that I had to blow it - such as winning a lotto.

My most important expenses in life:
1) 401k Max
2) IRA Max
3) Living below the means in housing. I currently live in a home that's price is significantly less than our annual gross income.
4) Savings for kids, home emergencies, etc...
5) Vacations

 

[piasabird]

I would never buy a watch because my cell phone tells me what time it is. What a person wants to spend on a car is up to them. There are an awful lot of $30k -$60k vehicles on the market that are fine automobiles. If you are a businessman and the Automobile is a status symbol and you want to treat your clients nice then maybe an expensive car is just a luxury item you can afford or a business expense for a CEO.

My house was purchased for $79k almost 20 years ago. It was all I could afford at the time. By today's standard it might be worth $110k.

 

[dave_the_nerd]

There are two types of people who buy those things.

1) People who are so rich, they can buy whatever and it doesn't matter.
2) People who have a reasonably finite amount of money, but CAN afford those things if they're a priority over something else.

The first type, well, yeah. The second type suffer a lot of "stop liking what I don't like."

 

[kranky]

I could never get past the extras that come with possessions like that. First I'd have to move, since nobody in my neighborhood has a car like that, and I don't want people thinking "Gee, look at that car. I bet he has a lot of expensive stuff in that house, and he's gone a lot." It was a bit awkward when a guy moved in a few houses away, saw me mowing the grass one day and came up to me and asked if I worked at XYZ. I do. Then he told me he used to work there, and wasn't I the director of <department>? The implication was why was I living there when I was surely able to afford a much nicer home.

I'd be worried anytime I had to park it somewhere that some bold thief would simply tow it away. The maintenance wouldn't be cheap, and I'd no doubt be stuck with one dealer in a 300 mile radius who services them - and if that guy sucks, I can't do anything about it. The insurance cost...

The watch would be the subject of ridicule at work so I couldn't wear it there. Then I'd be thinking "For the number of times I will be comfortable wearing this watch, I'd be better off renting one for $200 a day."

Not begrudging anyone a different choice, it's just not me. For many, those things represent achieving a goal. My goal is early retirement, and it's going to happen. It's just different goals for different people. For most people you can have anything you want, you just can't have everything you want. My priority was retiring early, so to achieve that I didn't buy a lot of things.

 

[Ns1]

Between my wife (34 years old) and I (32 years old) we pull just under 300k a year on straight income... We have several forms of savings and investments that we contribute monthly to

damn you dual income families!!!!

 

[nexus5rocks]

There are lots of factors - do you have to repay loans, # of kids to support, cost of living in your area.

Buy it when you don't have to finance it and still have money left over for emergencies and a retirement fund.

No loans, no kids, high cost of living, maxing out 401k (not eligible for roth), no need to finance either (watch or car), but would make sense to finance a car, rather than plunk down a huge amount of cash for a depreciating, illiquid asset.

 

[CombatChuk]

I could never get past the extras that come with possessions like that. First I'd have to move, since nobody in my neighborhood has a car like that, and I don't want people thinking "Gee, look at that car. I bet he has a lot of expensive stuff in that house, and he's gone a lot." It was a bit awkward when a guy moved in a few houses away, saw me mowing the grass one day and came up to me and asked if I worked at XYZ. I do. Then he told me he used to work there, and wasn't I the director of <department>? The implication was why was I living there when I was surely able to afford a much nicer home.

I'd be worried anytime I had to park it somewhere that some bold thief would simply tow it away. The maintenance wouldn't be cheap, and I'd no doubt be stuck with one dealer in a 300 mile radius who services them - and if that guy sucks, I can't do anything about it. The insurance cost...

The watch would be the subject of ridicule at work so I couldn't wear it there. Then I'd be thinking "For the number of times I will be comfortable wearing this watch, I'd be better off renting one for $200 a day."

Not begrudging anyone a different choice, it's just not me. For many, those things represent achieving a goal. My goal is early retirement, and it's going to happen. It's just different goals for different people. For most people you can have anything you want, you just can't have everything you want. My priority was retiring early, so to achieve that I didn't buy a lot of things.

That's where people screw up, thinking they have to buy up a house in order to enjoy a nicer car. I love my house just fine, it's modest, cheap, appreciated so much (up +250k since remodel when I bought it in the bottom of the market in 2011). Still would love a 3rd car garage, but whateves.

I don't think that's really that big of a problem seeing your 100k get towed, I guess if you go to a real shady neighborhood or if you live in one. Most luxury cars have so many self defeating fail safes they're not worth stealing, theives go after the Honda accords, etc.

damn you dual income families!!!!

None of this would be possible if my wife didn't work. I've always been happy/grateful she works.

No loans, no kids, high cost of living, maxing out 401k (not eligible for roth), no need to finance either (watch or car), but would make sense to finance a car, rather than plunk down a huge amount of cash for a depreciating, illiquid asset.

Exactly, my investments are on track for 13% rate of return this year. I'll gladly finance my Tesla, Ducati at 1.99% if I'm getting those returns.

 

[PricklyPete]

Earn a lot (it is a lot, but it isn't the millions a year you think you need)

Just to clarify, I never said I would need to make millions a year, but rather that my assets would need to add up to several millions before I would be willing to spend it on a depreciating luxury item like a 100k car. To me, income does not define a person's wealth. I know plenty of people who make multiple times what I do, but still live paycheck to paycheck.

 

[Cappuccino]

so many rich people here if you have spare money PM me and you can donate to me.

 

[JulesMaximus]

That's where people screw up, thinking they have to buy up a house in order to enjoy a nicer car. I love my house just fine, it's modest, cheap, appreciated so much (up +250k since remodel when I bought it in the bottom of the market in 2011). Still would love a 3rd car garage, but whateves.

I don't think that's really that big of a problem seeing your 100k get towed, I guess if you go to a real shady neighborhood or if you live in one. Most luxury cars have so many self defeating fail safes they're not worth stealing, theives go after the Honda accords, etc.



None of this would be possible if my wife didn't work. I've always been happy/grateful she works.



Exactly, my investments are on track for 13% rate of return this year. I'll gladly finance my Tesla, Ducati at 1.99% if I'm getting those returns.

Agreed. It always amazes me when I see people say you should never finance a car. This makes absolutely no sense to me at all quite frankly. You are really advocating paying $30-40k in cash for something you could purchase with minimal cash outlay with a finance rate of less than 2%? My wife and I have $70k in the bank but I have a loan on my car and my bike. I'm not upside down in either one and I can easily afford the payments. Plus, we both have credit scores over 800 so when we want to buy a new car or bike we always qualify for the lowest rates.

If you have shit credit I guess paying cash would make more sense but I don't.

I've been looking at the Rolex Datejust II or Daytona as my next watch. Nothing super fancy, just a stainless model with white dial on the Daytona or possibly gray dial on the Datejust II and diamond hour markers. A stainless steel Daytona goes for about $12k new. That Datejust with diamond hour markers would be about $10k in stainless. I would pay cash for either one.

 

[ponyo]

Agreed. It always amazes me when I see people say you should never finance a car. This makes absolutely no sense to me at all quite frankly. You are really advocating paying $30-40k in cash for something you could purchase with minimal cash outlay with a finance rate of less than 2%? My wife and I have $70k in the bank but I have a loan on my car and my bike. I'm not upside down in either one and I can easily afford the payments. Plus, we both have credit scores over 800 so when we want to buy a new car or bike we always qualify for the lowest rates.

If you have shit credit I guess paying cash would make more sense but I don't.

I've been looking at the Rolex Datejust II or Daytona as my next watch. Nothing super fancy, just a stainless model with white dial on the Daytona or possibly gray dial on the Datejust II and diamond hour markers. A stainless steel Daytona goes for about $12k new. That Datejust with diamond hour markers would be about $10k in stainless. I would pay cash for either one.

Just like you would pay cash for $12k Rolex, I would pay cash for any car unless the rate was 0%. 2% auto loan is still 2% I still have to pay. I don't get 2% on my spare cash. Credit score has nothing to do it with it.

 

[JulesMaximus]

Just like you would pay cash for $12k Rolex, I would pay cash for any car unless the rate was 0%. 2% auto loan is still 2% I still have to pay. I don't get 2% on my spare cash. Credit score has nothing to do it with it.

You do realize that 2% interest on a $35,000 5 year loan is approx $360/year. Why would you want to tie up $35k in a car? To me it's worth the $360/yr to have more cash available if I need it. I spend more a month on dining out... hell, I've spent that much on lunch.

 

[Ns1]

I don't get 2% on my spare cash.

sounds like you need to find better investments?

 

[Pantoot]

I don't get 2% on my spare cash.

Even something as simple as VOO will give you 2% in dividends.

 

[ponyo]

You do realize that 2% interest on a $35,000 5 year loan is approx $360/year. Why would you want to tie up $35k in a car? To me it's worth the $360/yr to have more cash available if I need it. I spend more a month on dining out... hell, I've spent that much on lunch.

Because I don't want to pay $360/year. I can easily replenish $35k in short time. Being debt free is a lifestyle choice. I'm not going into debt over a car that I can easily pay in cash.

sounds like you need to find better investments?

Who said cash is investment? Cash is cash and I keep good amount in cash and that cash pile is always growing faster than I can spend. I also have substantial amount in dumb pet rocks that pay zero percent interest. Those are separate from my investments. I don't believe in being fully invested. It might cost me point here and there but I can also take advantage of opportunities and I believe everything balances out in the end. But I know. I must be dumb to keep cash and even dumber for having pet rocks.

Even something as simple as VOO will give you 2% in dividends.

I own plenty stocks that pay higher dividend. But I keep cash because I always want something that is 100% safe. I know it's not fashionable to have cash. But I'm old school who still believes in hedging.

 

[Ns1]

Who said cash is investment?

When the choice is putting 35k into a depreciating asset or putting 5k down and then 30k into an investment giving you 5% returns, thus +3%, cash is an investment.

Like you said, it's a lifestyle choice.

 

[ponyo]

When the choice is putting 35k into a depreciating asset or putting 5k down and then 30k into an investment giving you 5% returns, thus +3%, cash is an investment.

Like you said, it's a lifestyle choice.

When people start telling me investment is guaranteed return, I turn around, take my money and runaway in the opposite direction. I know the 2% loan is 100% guaranteed. That 5% could be 20% loss.

 

[Ns1]

^^

fair enough

 

[JulesMaximus]

Because I don't want to pay $360/year. I can easily replenish $35k in short time. Being debt free is a lifestyle choice. I'm not going into debt over a car that I can easily pay in cash.



Who said cash is investment? Cash is cash and I keep good amount in cash and that cash pile is always growing faster than I can spend. I also have substantial amount in dumb pet rocks that pay zero percent interest. Those are separate from my investments. I don't believe in being fully invested. It might cost me point here and there but I can also take advantage of opportunities and I believe everything balances out in the end. But I know. I must be dumb to keep cash and even dumber for having pet rocks.



I own plenty stocks that pay higher dividend. But I keep cash because I always want something that is 100% safe. I know it's not fashionable to have cash. But I'm old school who still believes in hedging.

Well, cars are certainly not that. I get not wanting to have debt but auto loans are short term, low interest debt. Stupid would be carrying credit card debt. I don't equate auto loans to that. If anything, pay your house off early. That's the thing you'll pay the most interest on by far in your lifetime (assuming you don't have any credit card debt).

 

[Exterous]

But I keep cash because I always want something that is 100% safe

[pedantic] Cash isn't 100% safe [/pedantic]

 

[OverVolt]

I don't need things to make me happy. One of my best memories was riding around in the back of a 1990's Nissan Sentra with my head resting on the crappy arm-rest as a kid with my family. It was a rental car. They hated it... I loved it.

There's too much stuff in life going on to have time to spend it worrying about things. There is a certain point where you have all your income needs met and anything more than that you are basically creating additional stress for yourself.

 

[Chaotic42]

I'm not quite at six figures and I still feel guilty about buying a $33,000 car. I'd need to be making $500-750,000 to consider a $100,000 car. I don't think I'd ever buy a $10,000 watch unless I was a multi-millionaire.