Immediate gratification vs. long-term investment

Well, thats the way the world works. You don't want to be miserable and miserly, but compounding is a glorious thing!

 

Woulda Shoulda Coulda - Welcome to my world.

heh

my

 

Rascalif,

Thank you very much for sharing your story. That is exactly what I was getting at on this thread http://ferrarichat.com/forum/showthread.php?t=14413 . I am always trying to figure out when the balance between toys and savings should come into play. Instant gratification is easy, and savings is certainly hard at least in the country we live in now. I caved and splurged a bit, but I bought used instead of new and so on.

However looking back, there was money that I wasted on toys that I should not have, but hearing your story and many others, it allows me to believe in that buying your Ferrari in your late 40s and early 50s is not a bad idea at all, especially with longer life expectancy these days.

Sure there will be people who say "live for today, you may die tomorrow and all that" but I think if one thing I have learned is save early, invest wisely, live below your means, buy your toys cash (Dr. Tax direct advice), and stay out of debt. Sure having a Ferrari in your 20s can be fun, but having 2-3 in your 40s might be more fun. Who knows, there are different schools of thoughts on this, so choose wisely.

I once again thank you for your story. Tips like these allow us youngsters to make decisions wisely.

 

Good Grief, you mean that's the only thing your sorry for, that his decisions resulted in back seats and yours didn't. That's the thing that drives you nuts in your life? That's the only bad decision you've made? How petty! Sounds like the typical whining AMERICAN!

 

First, I have enjoyed the comments you've posted over the last month, as they have been quite thought provoking and insightful. I too have struggled with this question. To me it's a delicate question of balance. Some people are extreme to one degree or another in how they live their lives and spend their or don't spend their money. Some people, like me, are in between although some would say anyone who buys a Ferrari is extreme, extremely irrational that is!

I have a business opportunity right now which I believe will bear fruit, a lot of fruit, but it may entail liquidating certain assets. What if I sell some assets, hunker down and focus for a few years and make a billion dollars? Great! Then the next day after I sell my company I get run over by a truck. Bad! (although if I do the right things here on earth, I have faith my God will have mercy on my soul and then things will be REALLY good)

Enjoying life to some degree is ok, but to what degree is it "too much" and not "ok"? Thanks for raising this question. Regards, Mike

 

The rule #1 of happiness is.. dont' count other people's money!!

I too, ignored the word "Savings" until far too late in life, along with "investments".

Of course, you can be destroyed playing those games just as easily!
My first wife has all the savings!!! LOL

Speedy"by the tracks"308

 

I am in my early 30s and I wish I knew at what point it would be OK to stop saving as much as my wife and I do and "splurge" a bit more than we do. Note I did not say stop saving, but as is right now, we save more than we spend. We live very comfortably, but there are a few toys, a Ferrari among them, that I wish I would throw caution in the wind and just get them. But then I think of the interest being made on various investments and the peace of financial freedom does feel nice. So, any "magical formula" any of the elders can come up with?

 

Rascalif,

Great post. I sometimes wonder if I could have better spent the money that I did on my GT4. After the major service, various upgrades, etc., I have spent somewhere between $25,000-30,000 on this car. I have no need for the car, and my only justification is that it is fun.

I'm 35, I make a decent salary, 6-figures (although here in Socal, so does everyone else it seems), and I do save a large portion of my salary. Like you, I have a good retirement account, stock options, lots of equity in my home, and no debt (except for mortgage). Nonetheless, I still feel that $25-grand is a big chunk of money for me.

If I had waited a few (10?) years, perhaps I would be more comfortable buying a 456, or a 360, or whatever. Then again, I could kick-over from a heart attack any day (have already had a couple friends my age with heart-attacks). I'll continue to enjoy my car, and maybe one day in the far-away future, I'll pass it on to my kids as a valuable, rare, vintage ferrari.

Ultimately, what matters is: are you happy? Is your family happy (cute kids, by the way)?

Dom

 

Dom: That's a good looking Avatar (picture) you have there. Did you build that?

 

Its always an issue. Having a family will reduce how much you can earn. Taking vacations will reduce it. Sleeping will reduce it. Having fun on the weekend will reduce it.

The question is: what makes you happy?

If its accumulating for the sake of accumulating, then by all means accumulate. If its driving fast cars, then why waste 20 years of your life driving slow cars in order to maximize accumulation?

Decide what makes you most happy and then create a plan to get you there... if that requires short-term sacrifices, do it. If not, then just enjoy life.

If you get to the end of your life, and all you've done is prepare to have fun, but never really had fun... now that's true regret!!!

 

Biggest problem with waiting for the long term investement to pan out is that nobody knows if we will be around tommorow let alone 20 years from now.

Buy & enjoy what you can now & invest some for the long term but never give up being happy today bcus you never know

 

This is a question which often comes up with first time buyers. Here's a few questions I think everyone should ask themselves before buying a Ferrari or other expensive toy.

1. How long will it take me to earn this much money after taxes and is it worth it?

2. What percentage of my net worth am I willing to blow on toys?

3. (If you have a family) How will such a purchase affect my family's financial security?

4. How much of money per month or year is acceptable to have this toy? Be honest, include depreciation, insurance, maintenance, gas, lost income on the amount you spent or interest on what you borrowed.

I didn'y buy my first Fcar until I could pay cash and I knew it would have little effect on my long term financial plans. On the other hand I could think like my wife who would not feel secure with Bill Gate's money. My final advice would be don't buy unless you are comfortable with just throwing that amount away. If you obsess about what the money might have earned elsewhere, you won't enjoy the car (or other toy) anyway. Another tip: When buying houses, cars or toys, spend less than you can afford. Your life will be much less stressful and financially successful in the short and long run.

Enjoy,
DAve