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      05-15-2019, 07:40 PM   #23
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I would recommend progressing in your career a bit and saving a little more then get a late model zcp f80. There's no reason to rush as the prices will keep falling and once the next gen is out you'll be able to get some great deals on people looking to get rid of their f80's in order to get into the newest gen.
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      05-15-2019, 07:40 PM   #24
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yea, no. let's not listen to this guy.
Yep, this is a BMW forum, not a finance forum and my advice is free, as is yours.
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      05-15-2019, 07:43 PM   #25
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      05-15-2019, 07:44 PM   #26
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Originally Posted by c1pher View Post
Well, I won’t do the whole cost benefit analysis here, but unless you’re buying in a rural area or paying cash, you rarely are putting all your money into the house. You’re paying interest of course, property tax, home owner insurance, maybe flood insurance, HOA fees and dues etc. I can look at two homes side by side and the rental is typically cheaper with the owner paying the extras. That’s not the case all the time so it does pay to shop. And when you “buy” a home, with interest, you are paying 3-4x the original purchase price over the course of a typical 30 year.

Sure, if you can pay cash or pay the house off quickly, it may make sense, but someone making $65k a year asking if he can take a car loan isn’t in that situation.

Just simply look at your mortgage statement and see how much is actually going to principal. That’s what you’re saving. The rest is going out the window. Again, if you pay cash, sure it makes sense. And you may make a small profit if you have to sell which won’t be taxed if you lived in the house for at least 24 months. And what happens when you need to replace the roof, windows, or hvac?

Trust me. I’m 53, been there done that. Switching to renting was the best thing I ever did and I’ve amassed several hundred thousand dollars over the period of time I started renting in less than ten years. YMMV of course.
What makes you think you aren’t paying those costs when you rent? Sure they may not be separately invoiced but you can bet a landlord factors in property tax, insurance, repairs and maintenance, cost of capital etc. into rental prices because if they didn’t it wouldn’t make much sense to be a landlord. Plus, renting subjects you to rental inflation based on trends in supply and demand. Yes, mortgaging a home results in interest cost, but a 15 year mortgage with a sufficient down payment and a favorable rate as has been available for quite a while now is still a reasonable proposition and results in at least a portion (which increases over time) of your monthly cost going to equity vs. zero when renting.

I think if someone needs to relocate every few years, can’t make a sizable down payment, has mediocre or bad credit or is prone to getting in over their head, there is no option other than renting. Otherwise, I would not rule out ownership because it makes someone directly vs. indirectly responsible for costs of ownership.
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      05-15-2019, 07:46 PM   #27
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Originally Posted by c1pher View Post
Real estate really isnít as good an investment compared to the stock market. The market, without really trying will consistently beat a house purchase. Plus the days of buying a home, expecting to live in it the rest of your days, making owning a home in retirement, a much less likely scenario. Itís better to rent since you arenít straddled with house repairs and other expenses each month. What you pay is what you pay and you arenít concerned with the value of the home fluctuating.
I agree with what you're saying, but I'm not sure how it pertains to this conversation/OP's situation. Already having a mortgage and now wanting to take on car payments doesn't leave money for investing in anything. The mortgage is already there, as is the debt. I'd focus all my money on getting rid of my debt before making investments, whether on cars, stock, or whatever else. All that invested money won't do any good in a recession when the market tanks again sooner or later. But a roof under my head absolutely will, even if I get laid off unexpectedly and my investments suffer.
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      05-15-2019, 08:04 PM   #28
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Spending anything near annual gross income on a car to me as reckless. BUT - what are your prospects as far as future earnings?

One extreme - you're working at the bottom of a successful family business to learn it and will be the CEO in a few years.

Other extreme - you are in a shaky business / profession.

Unless you are in the first case, I'd put the money that would have gone to paying for the M3 for awhile and see how life shakes out.

Really only you can tell if you might catch yourself in a hole and have to sell your dream car.
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      05-15-2019, 08:29 PM   #29
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Originally Posted by 335dlci View Post
buying a car is different than maintaining a vehicle. Tires. Insurance. Wear and tear will be more

Edit: If you leave in California. Expect to pay a lot for registration
I did not state it in the original post but that is also on my mind. Higher costs just from the M tax.
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      05-15-2019, 09:09 PM   #30
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It is up to you whether or not you can afford it, everyone who posts here will have a different view on this subject. Some people live payback to paycheck and spend the majority of their money on cars so they will say go for it, while others will tell you to invest.

If you are looking to be responsible with money, then buying a car which costs 65% of your annual salary before taxes is a dumb move. The rule my dad taught me was if you can't afford to buy a car in cash, then you can't afford to finance it. That rule may be a little extreme, but it ensures you won't spent all of your money on a car you can't afford.
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      05-15-2019, 09:46 PM   #31
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Nothing new to add. Pay off the pad or as much as you can. Don't go crazy on the wedding but put this above the car. Save up and have a rainy day fund. If your partner is out of work you will have to cover payments. Have you thought about starting a family? $$$$! Warren Buffet said it best: "Don't save what is left after spending; spend what is left after saving." Let's say you have enough monthly income to cover your basic needs, and you want to start saving. Budget for your needs and bills, then figure out how much you want to save. Whatever is left is spending money.

$65k p/y is decent but aim higher. Get promoted or find a higher paying position. You never know one might come with a company car scheme.

This may also be worth a watch:

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      05-15-2019, 10:02 PM   #32
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Link to the M3 you want?
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      05-16-2019, 12:11 AM   #33
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Quote:
Originally Posted by c1pher View Post
Well, I wonít do the whole cost benefit analysis here, but unless youíre buying in a rural area or paying cash, you rarely are putting all your money into the house. Youíre paying interest of course, property tax, home owner insurance, maybe flood insurance, HOA fees and dues etc. I can look at two homes side by side and the rental is typically cheaper with the owner paying the extras. Thatís not the case all the time so it does pay to shop. And when you ďbuyĒ a home, with interest, you are paying 3-4x the original purchase price over the course of a typical 30 year.

Sure, if you can pay cash or pay the house off quickly, it may make sense, but someone making $65k a year asking if he can take a car loan isnít in that situation.

Just simply look at your mortgage statement and see how much is actually going to principal. Thatís what youíre saving. The rest is going out the window. Again, if you pay cash, sure it makes sense. And you may make a small profit if you have to sell which wonít be taxed if you lived in the house for at least 24 months. And what happens when you need to replace the roof, windows, or hvac?

Trust me. Iím 53, been there done that. Switching to renting was the best thing I ever did and Iíve amassed several hundred thousand dollars over the period of time I started renting in less than ten years. YMMV of course.
Fair enough, just depends on the location and your personal situation.

I'm moving into a new place soon and the rent is nearly the same as the mortgage on starter home in the area. But for the reasons you outlined I opted against the house. My dad is your age and is a strong proponent of buying, so he's pushing me to reassess in a year.
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      05-16-2019, 12:30 AM   #34
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Is it a good financial decision? No. However I don't see how buying a fancy car is ever a good financial decision, so that being said I don't think it's going to make or break you (based on the limited facts stated in OP).

Not sure if that is new, used or CPO, but I would at least go for CPO because personally the maintenance doesn't worry me, but big repair bills would. I have limited experience with the newer BMWs. Last new BMW I had was a 335 and that was a complete POS. Probably spent more time at the dealer than at my house, luckily under warranty.

If it's used get a good deal so you can dump it without taking a huge hit if the shit ends up hitting the fan with your finances down the road.
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      05-16-2019, 12:41 AM   #35
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Originally Posted by ntgarage44 View Post
I was taught to always make sure the house is paid off as soon as possible. Until then, nothing else matters besides food and health insurance. The last thing you want to be is homeless from not being able to cover your mortgage and car payment.

The best things in life take time. Use that 10 grand to help pay off your mortgage, as well as the other 30+ you were going to spend on the car. Until your Camry is broken, you don't need a new car.

Be patient. Get yourself into a financial situation where the house and car you own are actually yours, not the bank's. Nobody knows what tomorrow will bring, and a roof over your head is boring now, but a hell of a lot better than a reposessed m3 if ends can't be met later.
Quote:
Originally Posted by c1pher View Post
Real estate really isn’t as good an investment compared to the stock market. The market, without really trying will consistently beat a house purchase. Plus the days of buying a home, expecting to live in it the rest of your days, making owning a home in retirement, a much less likely scenario. It’s better to rent since you aren’t straddled with house repairs and other expenses each month. What you pay is what you pay and you aren’t concerned with the value of the home fluctuating.
I actually take a different view on owning real estate. Paying off a home early is not something I agree with. Neither do I agree with renting being a better option (for any long term housing).

On not paying off a home early. With interest rates still low, why would you pay off a home early and tie up money into something which requires significant money/time to pull out of? I've chosen to divert money I would have paid into paying down my mortgages into investing in the market. In my situation, my primary home has a 3.75% fixed rate for 30 years. My returns from investing have exceeded the interest being paid on the mortgage.

On renting, it has been said by another poster that all the maintenance along with the landlord's mortgage has been factored into your rent. So I agree with the notion, your rent payments are already covering those expenses you say you're getting away from with owning a home. But big difference is paying rent doesn't entitle you to any equity in said property nor the market appreciation.

For the OP, seems you're young and just starting off with the next phase of your life with marriage. I agree with those saying skip the expense of the car that based on what I see is just a want and not a need.
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      05-16-2019, 12:42 AM   #36
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I'd wait another year or so because the F80s are still depreciating.
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      05-16-2019, 12:46 AM   #37
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You canít afford it. You should never buy a car that is as much or more than you make in a year. Itís not a wise financial decision at this point.
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      05-16-2019, 06:30 AM   #38
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Originally Posted by PKL View Post
If you can afford $42k, you don't have enough money for an F80, and why would you want one anyway? $42k is a fantastic amount of money to spend on an E92.

You don't want an early model F80 with high miles when you could get a late model E92 with low miles for the same price.

NOT EVEN A QUESTION!
I mean...

https://www.m3post.com/forums/showthread.php?t=1614371
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      05-16-2019, 06:36 AM   #39
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Quote:
Originally Posted by Savageenterprise View Post
If affording the car cuts into a significant amount of money that you save every month then I would say donít do it.

If youíre still stacking a healthy amount of money every month and arenít living paycheck to paycheck or needing to tap into savings because of the car then I would say you can afford it.
I agree.

If your bills are paid, and you are saving both $ (in the case of an emergency or loss of job) AND contributing to your 401(K) should be in decent shape. If buying the M3 would cut into either of the above, perhaps should hold off.

Always invest in the ability to support yourself should the situation arise: both in the present, and in retirement.
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      05-16-2019, 08:06 AM   #40
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Quote:
Originally Posted by zx10guy View Post
On not paying off a home early. With interest rates still low, why would you pay off a home early and tie up money into something which requires significant money/time to pull out of? I've chosen to divert money I would have paid into paying down my mortgages into investing in the market. In my situation, my primary home has a 3.75% fixed rate for 30 years. My returns from investing have exceeded the interest being paid on the mortgage.
Because 99% of people are not that diligent and will divert that $ straight into poor purchase decisions, like used M3s that cost 70% of their annual income....
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      05-16-2019, 08:08 AM   #41
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natedog7700 How old are you and how much are you putting away for retirement? My hunch is the answer is "In my 20s and not much." Compound out what $42,000 in the S&P will do for you over the course of 40 years.

EDIT - OK I got curious. Jump in your time machine and go back only 30 years. Drop that $42,000 into an S&P 500 fund and return back to present time. Your bank account now has $675,000 in it. M3s are not an investment. They are a guilty pleasure and a total waste of money, IF they come at the expense of sound fiscal decisions. If you are already saving and have at least 6 months' salary in the bank and your retirement fund is chugging along towards meeting your goals, and you STILL have cash left over for that M3 then by all means, get it.

Last edited by DETRoadster; 05-16-2019 at 09:46 AM..
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      05-16-2019, 08:19 AM   #42
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Quote:
Originally Posted by c1pher View Post
Well, I wonít do the whole cost benefit analysis here, but unless youíre buying in a rural area or paying cash, you rarely are putting all your money into the house. Youíre paying interest of course, property tax, home owner insurance, maybe flood insurance, HOA fees and dues etc. I can look at two homes side by side and the rental is typically cheaper with the owner paying the extras. Thatís not the case all the time so it does pay to shop. And when you ďbuyĒ a home, with interest, you are paying 3-4x the original purchase price over the course of a typical 30 year.

Sure, if you can pay cash or pay the house off quickly, it may make sense, but someone making $65k a year asking if he can take a car loan isnít in that situation.

Just simply look at your mortgage statement and see how much is actually going to principal. Thatís what youíre saving. The rest is going out the window. Again, if you pay cash, sure it makes sense. And you may make a small profit if you have to sell which wonít be taxed if you lived in the house for at least 24 months. And what happens when you need to replace the roof, windows, or hvac?

Trust me. Iím 53, been there done that. Switching to renting was the best thing I ever did and Iíve amassed several hundred thousand dollars over the period of time I started renting in less than ten years. YMMV of course.
and after 30 years of renting, where in most situations the rent is more than a mortgage payment (at least everywhere i have lived over the last 10 years), what do you have to show for it compared to paying a mortgage for 30 years?

for reference, house down the street is up for rent @ $2800. My mortgage is 1900. Northern Colorado area. Similar houses, mine is bigger.
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      05-16-2019, 08:31 AM   #43
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personally i don't think i'll buy a car that costs more than half my annual income...
spending a third of my annual income on a car is probably as high as i would go...
i guess each to his own... i got kids and stuff so gotta save for the future, if you're younger risk tolerance level is probably higher...
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      05-16-2019, 09:31 AM   #44
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OP did you get a ring already or have the funds set aside? I would make that your priority first. Wedding funds? Was always taught to never use credit on those things.

I think before you look at just a car of the price, you want to do a cost analysis including what insurance, gas, car fix funds you can allocate to live without breaking the bank.
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