I know there are many people that do well here, and I take your advice seriously. I want to be open about my finances and see what you think. The CS came out when I was in college and of course at the time owning something like that would have only been a dream. I was a waiter and so was my now wife at the time and I had to pay my way through college. Not a chance, but I've always liked setting high goals. As the years have gone by, I have made more and more money and have amassed a fairly large 7 figure collection in another hobby/assets. I got distracted away from cars slightly. Formed my own business, and have poured money into that, only to have it now become very stable and successful. Always loved cars, but just not obsessed with them like I was in college and like many other 20 something year olds are. I swear, the Challenge Stradale keeps calling to me every single year though, and I hop online, look at their sales, look at pictures, want one, but then think "I need to invest. I need to grow the business. I need to be super stable. I want no debt at all.". Don't get me wrong, those decisions have been good for me, but I can't stand having this constant want for a CS. I had the serious conversation with my wife tonight (who has heard me talk about wanting one since she met me in 2005) about wanting to get one, and how I missed the boat in 2010 when they were close to their cheapest. She said "That's ok. You've been talking about getting one for 20 years. Get it!" She's awesome. Now for my personal information, and the only reason I'm posting it is because I feel that it affects the decision. For the average couple, we do well. We bring in around $350,000 to MAYBE $400,000 a year with her job and my business and it does go up every year (so far). Business has been fairly steady for me for about 10 years and her job is extremely stable. We are only in our 30s, have two young kids, no debt except for two mortgages on two really nice houses. The house we live in and a rental property of ours that currently pays for itself plus maybe $300 additional a month. Both of our credit scores are in the low 800s and we have both never missed a single payment on anything ever. We do not have a ton of extra cash lying around, as I have always invested my money into items, and during my entire adult life I have been glad that I have done that instead of keeping it as paper money or blowing it on parties and beer. I am not in a hurry to get one, and although I could sell some other assets of mine and buy one in a couple weeks, I really do not want to. Would it be smart to just wait 2-3 years, set aside some funds, and buy one for cash? That's kind of how I like to be. Then no interest, and I have always been taught that's just responsible. Is a Ferrari purchase supposed to be responsible though? I have lusted after one for 20 years and keep getting distracted and buying now exceeding 7 figures of other fairly liquid assets I'm just not interested in selling either. Also, I am worried about where the market is going with this economy. One side of me says the market will stop or even dip (then waiting would be smart) and another part of me says it will only continue to fly up and in 3 years I'll have to come up with $500,000 to buy one which I simply cannot see affording. Maybe I could? Who knows. Lastly, if I wait 2-3 years, I can put that money back into my company and probably be making $100,000 more a year or even more by that time with it. Or the other option......should I go ahead and maybe within the next year just finance one. 20%-30% down on roughly $300,000 plus or minus. I have looked at payment calculators and it looks like my payments could be around $2,000 a month which would be easy if I did a long term loan. Then maybe just pay it off in 5-6 years or less and be good to go. But is that smart? Then there are other things I keep thinking up. Pay off one of our houses. Invest in the business more and in 5+ years I'll be making a TON more anyways. Etc, etc, etc. But then in 5 years what if these are a million? You just never know. Anyways, I might be rambling here a bit, but many of you are very/extremely successful and I value your opinions. -Wait and save. -Wait and put more money into the business making me make even more money, then just buy one day. -Finance. -Or other option you suggest? Thanks everyone for listening to my question and ramble.
Everybody has a different tolerance for risk, different outlook on future growth of earnings.. pessimism vs optimism, different safety net totally self sufficient vs if the stuff hit the fan you can count on a wealthy relative or trust fund…… In my line of work and based on my values and low pers fin risk tolerance I pay cash for toys. but I was brought up by depression era mentality parents and grand parents… and I work in a boom or bust commodity sector…. Gl and congrats that you have a wife that is letting you entertain the idea…. And on your continued success.
Thanks for the fast reply and the kind comments. I am halfway like that too. My parents were one to not finance anything and taught me to partially be like that. Ther were born in the very late 1940s and were raised in a different, and in many ways, smarter time. I don't finance a lot, but when I have, I always paid it off early. 6 year car loan? Paid it off in 2 years. College debt for 10-20 years? Paid it off in 3 years. Etc. I like to think I use a little debt periodically to help my success I guess? Different than my parents but they have been very happy with how I've done being like them, but a little riskier. Plus I always have a lot of assets I could dump for sale if I was ever in a bind. This would be new debt NOT helping me though other than my smile growing. Anyways, back on topic. Thanks for your insight. I am ok with waiting to just pay with cash. I guess my main fear is saving up $300,000, then looking to buy one and they are magically $500,000 in 2025. Need that dang crystal ball I guess.
Leverage is a tool, like any other tool. To be taught only to pay in cash is a poor man's way of thinking because use of leverage is nuanced. If I can use the Bank's cash to buy an investment, cars are never really investments, and I can get a return on my investment higher than the cost of the money, then it is smart to use leverage before your own cash. No way would I use my cash to prepay a mortgage that cost me 3% when I could use that same cash to earn 10-12% elsewhere. This is making cash work for you, not the other way around. Over the last 10 years, smart people have been using fixed interest rates to acquire assets that return more than the 2-3% they are paying for the money. Rising rates makes that a little harder today than it was, but its still doable. You don't say what line of business you're in or what industry your wife is in, but this would be a factor in my decision. What is your businesses ROI, ROA or ROE?The wealthiest people in the world are also smart users of leverage. With all that being said, everyone's risk tolerance is different. There is little risk in the short term to scratch that itch of owning a CS. Buy it and if you get bored, resell it back out into the market. You shouldn't really lose much if any money. Be warned though. Buying one Ferrari is a gateway "drug" to buying more Ferrari's. Each time you want more speed, more options and newer tech. Driving a Ferrari is not like driving any other car made and its near impossible to describe it to someone. Each time you take the car out its an event for you and for other enthusiasts who see it. I never get tired of seeing mine.
I completely understand this notion. However, the way things are going right now I'd be highly surprised if there isn't a significant correction in the market (not just cars) in the coming year with a lasting depression. (I wrote more but think it would be deleted due to potential political chat) The last thing you want to own is a car that you borrowed money for to buy, that'll be worth less because everyone is selling to free up some cash. I'd love to have posted a more uplifting post but I really can't see any positivity right now. Personally what I'd do if I was you is find a decent (manual if you want) 360 and put some CS bits on such as the exhaust (can also be an F430 exhaust since the factory CS exhaust is hard to find/get) and wait to see how the financial climate plays out. If it's bad, you haven't taken a loan out and it doesn't cost you a whole lot more. If values keep climbing...you can create a CS clone in the spec you want for a fraction of the cost (ok, things such as mirrors are insane money but very good carbon copies are fairly priced), and you'll have a car you won't be afraid to drive for hurting values. See the 360Trev thread for inspiration.
What is an auto loan int rate on a 20 yr old exotic? What are the chances we are in a used car bubble w the prospect of a correction? as Kent said you can not think like a poor person and leverage your money……. Other factors- Tangible asset risk/ How will you use it? Any risk of car accident or theft or vandalism? Risk of major service? Having gone through these mental exercises makes me appreciate the people who own these fun cars that much more. if you want it bad enough you will find a way.
you can also buy a 335i and slap M3 bits on it, and make it look alike, and even have more performance with a tune. Guess what. It will never be an M3; and you'll know it in the back of your head.
Absolutely, if his cash flow is strong. Let's say he has two investment options with his cash and no cash flow problems created by the leverage. One investment is putting the cash into a multifamily property with an ROI of 18% and the other is a car, with a 0% ROI and 5% interest expense. Assume a flat depreciation curve on the car. Which would you rather do with your cash, earn 18% or pay 5%? Its called a positive carry. This is how private equity makes money. If the car depreciates too much over the ownership, then you can get a negative return. https://www.investopedia.com/terms/p/positivecarry.asp#:~:text=Positive carry is a strategy,positive carry in currency markets.
Depressions happen when there is widespread banking system failure which interrupts the flow of capital, which was a real threat in 2008. However, the banking system is well capitalized and the proper reinsurance industry was changed as a result of 2008, requiring it to reserve at proper levels. There is no depression in the future. Recession, yes perhaps, but all signs point to a short lasting recession. The economy is overheated, running at full RPM and unemployment is very low with increasing wages, but inflation is outpacing those wages due to demand. This is the correction after decades of falling wages. If the Fed can tighten correctly, demand will fall, along with it wages. Its a very delicate balancing act for the Fed. This is a worldwide issue, not isolated to the US. The UK could see inflation as high as 22% as an example.
Thanks everyone. All good points. -The wife is a nurse in a stable position at a stable hospital. I own a draftsman business for outdoor structures, yards, pool, etc for clients all over the country. "Started" it when I was 17 and been growing it for almost 20 years now. It has been very steady and growing, even though 2019-2021. I do bring in most of our income. -Yes, a big part of me does think a correction will happen with everything, so no real rush. I've always got my doubts though as I am no expert. -The other part of me thinks the dollar is plummeting so a loan now, might feel like nothing in a few years. -I only want a real CS. I would prefer it to be manual, but it is what it is. Gotta get a real CS even though they only have the F1 gearbox.
This is simple. Use as much as you can of the banks money keeping your money in the bank. If something goes amiss you can then use your money to pay it off or sell it
Medical is recession proof and in fact what you do is highly susceptible to consumer spending so my red flags go up. However, your business is not capital intensive which is a positive. A cheaper dollar is not necessarily good for you unless you are an exporter which you clearly are not so that's a net net. Personally, I would drive a CS, F430, Scud and 458 before you settle on the CS, even if that was your "poster" car. In no universe would I pick a CS over the others I listed, but the CS was not a "poster" car for me so my feelings on it aren't shaped by nostalgia or collectible in nature.
Thanks, recession is the word to use then, thanks for correcting. I agree with the rest. In my initial writing I wrote that about the situation affecting the world not just USA but didn't want to delve into politics. Regardless, the worry for a significant market correction still stands, and stand behind my point of getting a 360 Modena for the time being and assess the situation. I strongly doubt we'll see values rise much from this point onwards. If I'm correct on the recession, he'll likely be able to buy a CS next year orso without too much loss of the 360 (less far to fall) for a bit less than they are today...
Thank you. My business is certainly up and down. Extremely stable though because of my work ethic, and customer locations, and like I said it has only grown and grown the past 10 years. Even before I stated to focus on growing it, I was still working during the 2007-2010 times Of course anything can happen and you are correct for the concern. You probably know much more about this than I do. Thank you. I have driven three of those models you listed and a few others and a couple Lamborghinis, and to me the CS is still the winner. Just something about it. Thank for the suggestion.
If you want a CS the best time to buy was yesterday, second best time is now. Money is still cheap, if this is taking energy and focus away from your business then buy the car and put your head back down and go to work. The piggy bank will recover.
That’s ridiculous. I bought mine in 2013 when I used to make way less than 100k. Big loan paid out in a couple of years. You can’t be serious, or you need to drive a Prius.
Haha. Fair. What did you pay back in 2013 if you don't mind me asking? Maybe I should have done the same!
Thanks. After reading these comments I think I might put my head down for a year just to watch where the world economy goes, and focus on my businesses, then do a finance with 50% down just so I can get it a little earlier.
INSANE! I really should have bought one then. I put my money in other investments over the that have tripled or more in value as well over the years, so I can't be too bummed, but the problem is I don't want to sell any of them to buy a CS. Haha. Enjoy your CS in good health and your excellent purchase timing!
Thanks - I recommend you buy it and stop thinking about it. Unless the world collapses it will always be worth quite a lot. You can always sell it at a minimal loss, worst case.
