NOT a net worth thread, just want some info.

How much do you think is a fair amount to be making BEFORE you were to buy say... a 250K dollar car? Just wondering because I know of some people that spend this kind of money on a car making 250K a year, some people would with 100K a year, and some wouldn't touch it without a million a year. What would be responsible to do?

I would say 700K a year, or 1/6 of your assets.

 

i would agree if not more. if they were smart.

but what is more sad is the people making 25k per year that buy new suburbans for 40k

john

 

that is sad, indeed.

 

Too me it's about debt to income ratio, and what area of the world you live in. If you have no bills and live in a low cost of living area, your 250k/year (or 500k etc.) is going to go farther than someone making equal money in the Bay Area or New York. With that in mind, I would say that in order to spend $250k on a car, a person shouldn't "feel it". When you purchase the car, it should have zero effect on living style, investments, how many vacations you take etc. Just buy the car, and carry on financially like you did the day before.

 

Nice way of putting it. Anything else?

 

Hmmmm.... If they can swing something like that then....... I'm gonna have to get going, Barrett closes in a half hour

 

mark, its not getting it, I can probably get you a ferrari today, its how long you will be able to keep it before they take it away.

People buy stuff beyond their means everyday. On my old car lot I had a couple that had a 30k truck with $700 payments, that their sister or something cosigned on. they made $2600 combined income. I would bet they ruined there sisters credit within 6 months. Sad but true!


john

 

That's why I got the Vette, I crunched the numbers and decided I didn't want to have to try and live on a budget

 

^^ Amazing how the type of car can differ SO much throughout forums in general. The people take a complete 180.

 

)

 

Well, a $250K car is, lets face it, a toy. A toy that will not provide extended value in the long run if you play with it as much as ( I would hope. ) you will want to.

I would as a general rule not spend over 10% of my post tax income on a toy unless it was a once in a life time, or something I had been saving for a long time.

But that is me.

So if you make $10mill, divide by 2 for taxes and you have 5 mill if you owe nothing at all, 10% of 5 mill is 500k so a $250k car is not out of the question in my book.

 

A couple of things everyone is overlooking:

This was alluded to by the person who mentioned cost of living. It would be fine if I were 50 years old right now, had my house paid off, and with an income of say, 200k a year I wanted to buy a used 360 for about $140k. Payments on that (assuming financing 100k w/ $40k down) would be a $2k/month. If I don't have a house note, that's no biggie.

I'm I get out of law school at age 26, making $150k/year, but have a house note, student loans, etc, it's a VERY different ball game. In that case, I would keep driving my Honda Accord for a couple of years until I lowered my debt.

People get into financial trouble because they're not willing to WAIT, or not willing to compromise. E.g, I would be content to drive my Honda Accord for TEN years, even if my income was $200k, so long as I have something great in the garage for the evenings/weekends.

 

markets some of its cars based on 1/3 of your income. When they came out with the little hatch back C class Benz it was projected to costs $25k and their target consumer had an income of $75K. This marketing concept only holds true up to a certain point and certain income. Using this theory for a Ferrari purchase will not hold up becasue of the cost of up keep. Just my $.02

 

We are all forgetting that we live in America! Just buy it! Ya make $75K a year? You have some equity in your home? What the hell, just sign on the dotted line and worry about the payments later!

 

That's very ambitious. You're not going to be making that kind of cash right out of law school unless you end up at a huge firm in NYC or D.C. And even then, only a few of them are going to be paying that much to a first year associate. Oh, and if you do end up working there, you will be working 70 + hours each week and won't have time to enjoy anything.

Scott

 

That's not that far off for Andy... he cleaned up on the LSAT and will likely go to a top 10 (if not top 5) school. There are plenty of firms in NYC, DC, Chicago, LA, SF, SD, Newport, Seattle, Dallas, Houston, Austin, Philly, London, Paris, Hong Kong and Tokyo offering $125-140k right now - probably 100+ firms in the country - and four years from now I think things will have picked up enough to say $150k isn't unreasonable. With cost-of-living adjustments some big US firms abroad are offering $180-200k to start.

Show me a 26 yr old who makes 3 times the average US household income who doesn't work 60-70+ hrs a week!

 

It's true that most large firms are paying around 125k in large cities. But don't expect that to rise necessarily. Those are the same wages that were being paid 5 years ago. Law firm salaries shot up astronomically over the last 5-8 years but I don't think they are going up anytime soon.

If he does get into a top ten school then he will have a very good chance of getting a job at one of these firms. But remember, the trade off for the pay is your life. You WILL be working ALL of the time. You WILL be expected to come into the office every weekend. You WILL be expected to check your voice mail all weekend and come in on a Sunday to work 10 hours at a moments notice.

As you can probably tell, I used to work at one of these firms and decided that having my life back was much more important than making a lot of money. I have one friend who is currently pulling 20 hours days to get a deal done. Everyone I worked with ate out because they didn't have time to cook. They all had maids because they didn't have time to clean their own house. All of the partners were divorced because they didn't have time to spend with their wives - a lot were remarried to ones half their age. No one had any hobbies. All they did on the weekend was rest (if they didn't have to work).

I was in an airport in PA returning from a trip to France when I ran into another attorney (a friend) who was returning from Rome and catching the same connecting flight as me. He was going into the office that SAME NIGHT. Yeah, you'll have a lot of money but that is all you will have.

It's not necessarily a bad deal if you go right out of law school and only stay a year or two but you will be seriously burned out after that. Save all of your money while you're there and don't buy anything expensive that forces you to stay.

My. $.02

Scott

 

well cost of living is a big factor. where i live(delaware) the cost of living is not very high. $2 million will buy you about 8000sq ft. i remember once looking on dupont registrys site. a house in california close to LA was going for $400-$500 and had 1000-1500. then i looked somewhere in oklahoma or kansas. that price range will buy you about 5-6000sq ft. and then you have to take every other expense into account. i was thinking about this the other day.
lets say two people were each making a $100,000 a yr. one was single, lived in a 1 bedroom condo in a middleclass area even though he could afford a slightly nicer one. he drives say an old pickup to work.
now the other guy was married with 2 kids. he lived in a suburban home that was on mortgage. his wife drove an SUV. he drove an old sedan.
so who would have the money for a $250k car or something a little cheaper, $95k?
obviously the single guy
so besides cost of living you have to look at all your expenses. so one could make $250k a yr and afford a car worth that much if they lived in an appartment, drove a beater, single but maybe a girlfriend living with them, and didnt have a lot of expenses.(i.e. a timex does the same job as a rolex, or not staying at the most expensive hotels or eating at the fanciest restaurants)
rant off my $.02