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Why are you even talking about YOU buying it. You buy NOTHING. Your company buys. . it. Stick you company name on it somewhere. Small, unless you really want to get your contact info out there in that manner. Now it's a depreciating business expense. The tax implications are huge (I'm in Pal Beach, that's what I did). Talk to your corporate account or lawyer. I assume that you have those. You're 22 and working. Unless you're paying your parents rent time to get your own place.
 

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Only you can answer the question of whether or not to buy an R8 today or maybe tomorrow.

If you buy it and then decide the price was too high - Cost, Maintenance Insurance, etc... then you can sell it and call it a learning experience.

There will be a lot of those in your future. They are good learning tools (Experience is what you get when you don't get what you want.)


My daughter recently graduated from college and after 3-4years in the IT Industry is making bank $300K+

She has been taught to write down her 1 year 5 year and 10-year goals and always have a written budget.

At 18 she had over 20K in the bank just from working coffee and budgeting and bought her 2nd-second car a SCION xB.

She now owns a Townhome, a Mercedes and is looking at getting a Porsche Cayenne.

She is now asking me about how to properly invest her money for the future. - Very Proud of Her


I bring this up because you have your whole life ahead of you.

There are so many opportunities you can take advantage of with your income that will help move your life forward and set you up for the R8 in the future.

Some questions to ask yourself are where are you going to keep your R8? In your parent's garage? Rent a Storage Space?

Personally, at your age and with your income I'd be looking for a home so I could have a place to keep my future supercar.

The home will appreciate over time and you could you that appreciation as leverage to buy a supercar if so inclined.

Buying a home first will make date nights less awkward when your asked, Where do you live? You won't have to say 'With your parents'


My wife's uncle has always been a 'live for today kinda guy', who has never owned a home and has rented for the last 50 years, and now he's complaining how much rent has gone up.


I purchased my first home when I was 23. I was in the Navy and had a family.

When I was in my 20's, I used to go to dealerships and drive a lot of high-end cars and thought I would have an Acura NSX when I got older.

As the kids grew up, I never lost my goal of owning a supercar and would take the kids and go on test drives with them.

When I got out of the Navy I worked in IT for many years.

I now own an IT Company and bought a 2014 Sepand Blue R8 V10 with Stitched Leather Seats and Carbon Fiber everywhere a couple of years ago (paying cash).

This car has been everything I expected it to be and love taking it to the track and letting her run (The V10 with the Stassis Exhaust Sounds Amazing 😱 ).

It took some time to get to this point, but have no regrets.

After buying my R8 I think I've caught a supercar bug and am now looking at a Ferrari F430 Scuderia, Mercedes AMG GTS, or maybe even another 2017 R8 V10 Spyder for my garage.


I'm sure there are a lot of awesome stories from R8 Owners in this forum and thought I would share a little about mine.

You'll have to write your own story and we all look forward to hearing about what you decide to do.
 

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I would say buy the car. You only live once. Theres a once in a lifetime pandemic going on, who knows if you will make it out. Find something you can finance 1500$ per month or so. Try to write it off. Who cares how many percents 18000 a year makes over a lifetime. You see most of the guys ages on the forums above 40 years old (no offense to anyone) Why would you want to wait that long? I bought it at 31 and I feel like that was too late. Just like everything else, once you have it, it does not interest you anymore. My “thing” for cars is done. I could care less if I drive a minivan at this point. If it was all in the perfect scenario, i would buy the car at age 23-25, you just start hitting that next level of maturity, this way you won’t get carried away with speeding and wreckless driving. Enjoy it now, its cool to have, gives you confidence and “swag”. In the long game, 100K here or there wont dictate anything if you live a frugal life elsewhere which it seems you do. Try to find like a 2014/15 facelift in the 75-90K range and you will be fine. Good luck.
 

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My advice at 31... if it's something you want don't overthink it. What's the worse that will happen? Business takes a blow and you have to sell the car. And that's worst case.

Life is short. I've learnt to always go as big as I can. Eg If mortgage company says you can borrow up to £500k, then buy a £500k house if you know you can afford the payments. Yes cars depreciate but don't feel guilty for spending some money on yourself on something you want.

Only thing I'd recommend is buying a house. Sooner you do that the easier everything becomes later. Maybe look for something close to your rents so you can frequently visit them

On this forum you're talking to people who are the exception, they've stuck to their guns and bought their dream car - even those who waited at first. But if you wait, you'll become the rule. 99% of people who wait are too scared or "sensible" so plan to wait until they're older and more comfortable but problem is your priorities then change, you have other dependants and all of a sudden you're accepting that it doesn't make sense to buy your dream car.

If you look at the wealth curve of most people they're wealthiest in their 40's onwards. I'd be surprised if even one person over 40 or 50 wouldn't take the opportunity to send a chunk of their money back in time to their younger 20's self to enjoy life as much as possible. Get the dream car, go on the dream holiday, see the world while you're young, get the nice house, live a nice life. Time is the one thing you can't get back.
 

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My advice at 31... if it's something you want don't overthink it. What's the worse that will happen? Business takes a blow and you have to sell the car. And that's worst case.

Life is short. I've learnt to always go as big as I can. Eg If mortgage company says you can borrow up to £500k, then buy a £500k house if you know you can afford the payments. Yes cars depreciate but don't feel guilty for spending some money on yourself on something you want.

Only thing I'd recommend is buying a house. Sooner you do that the easier everything becomes later. Maybe look for something close to your rents so you can frequently visit them

On this forum you're talking to people who are the exception, they've stuck to their guns and bought their dream car - even those who waited at first. But if you wait, you'll become the rule. 99% of people who wait are too scared or "sensible" so plan to wait until they're older and more comfortable but problem is your priorities then change, you have other dependants and all of a sudden you're accepting that it doesn't make sense to buy your dream car.

If you look at the wealth curve of most people they're wealthiest in their 40's onwards. I'd be surprised if even one person over 40 or 50 wouldn't take the opportunity to send a chunk of their money back in time to their younger 20's self to enjoy life as much as possible. Get the dream car, go on the dream holiday, see the world while you're young, get the nice house, live a nice life. Time is the one thing you can't get back.
This can be a recipe for financial disaster and setting yourself up for an unsustainable situation. I'm sure you've heard the saying, "keeping up with the Jones" right? This is exactly the warning of that phrase.

Do you know where the term "mortgage" comes from? Its meaning comes from the term "death pledge." Think about that for a moment. This was a debt that was designed to be with you for life (and often until the end of life). Banks aren't approving you for $X in YOUR best interest. They're approving you for $X in THEIR best interest. If I'm a bank, I want you to take out the very most you can "afford" and pay me a long, endless stream of payments with LOTS of interest piled on. This is literally a drain on your ability to build wealth during your life.

Add fancy cars, fancy vacations, and "going big" because "YOLO"... and these are exactly the types of people who find themselves at 50 or 55 scratching their head because they've finally realized that (a) they don't want to work forever, and (b) they have NO IDEA how they'll now afford to retire in 5 - 10 years... or even 15 - 20 more years!

An important concept that people need to learn is "delayed gratification." There's a difference between people who LOOK rich and those who actually ARE rich. Those who simply look the part rely on their income to buy a lifestyle. If that income stream is ever cut off, their life falls apart. Those who actually ARE rich have figured out that you need to build a self-sustaining income stream that doesn't come from an employer - it's called "financial independence." This only comes from saving and investing heavily - ideally as early in life as possible to allow the compounding effect to occur sooner.

Let's say you're a young urban professional (Average Joe) making $200k/year - Joe's income isn't average (far above it), but his behavior towards finance is very average. Average Joe can buy a nice place, drive a nice car, take two or three vacations a year, go out to eat every weekend, the whole nine yards - "go big." But Average Joe will also need to work forever, and there's a good chance that when the time comes to retire, Average Joe will SEVERELY need to cut back on his lifestyle because he hasn't saved enough to support continuing it. At a safe withdrawal rate of 4% from a well balanced portfolio of equities and bonds, Joe needs a portfolio of $5M to provide that same $200k/year income. $5M is a LOT of money.

Let's say Average Joe, mentioned above, doesn't start seriously saving for retirement until 30 years old - which is still pretty decent, but very average. He'd need to save around $2,300/mo for 35 years, making an average return of around 8% annually, to hit roughly $5M - enough to replace his $200k/year income at a very ordinary retirement age of 65 years old.

Now let's say we have Extraordinary Joe, who finds himself in the very fortunate position to have $130k at 22 years old that he can either (a) spend on an R8, or (b) invest in the market. Extraordinary Joe decides to invest it. He then decides to live very frugally for 5 years (as the OP is doing) with his family, investing $10k of the $12k/mo he's making. After 5 years, at the ripe "old" age of 27, he moves out and lives the exact same lifestyle as "Average Joe" mentioned above - saving $2,300/mo. Extraordinary Joe reaches his $5M investment goal around 43 years old - over twenty years sooner than Average Joe. Extraordinary Joe can then decide to quit his job, travel the world, or do WHATEVER while still in his young 40's with a very nice $200k/year perpetual income from his investments. Average Joe? Well, he's still going into the office... for another 20+ years until he's gray, tired, and burned out.

The moral of the story? Money blown while you're young is worth SEVERAL times that amount to your future self. Blowing $100k in your young twenties is literally the same as blowing millions in your 50's. And that's thanks to the compounding effect of investments... investments you're choosing not to make.

Now, this isn't to say that everyone needs to follow this path in life - it's a choice. But very few people are actually financially literate. They don't understand the dynamic between money spent today and the loss it represents down the road. Many of them don't figure this out until they're in their 40's and 50's, tired of working, and dreaming about the ability to retire one day... only to realize that compounding takes time... time they no longer have. So, they end up in a situation where they're struggling to put away enough money AND hoping to retire by the time they're 65 years old.

But let's say Extraordinary Joe actually does enjoy working and has no desire to retire in his 40s. He now has a LOT of freedom - freedom to switch careers, even into a less lucrative one that he finds more fun. Freedom to start a new business. Freedom to move to a foreign country and explore while working elsewhere. He has "financial independence" - true freedom. Let's say he keeps working, though, and continuing his investment routine, never even increasing his monthly contribution. By his early 50's he's now worth over $10M. By Average Joe's retirement age of 65, Extraordinary Joe is now worth close to $25M - FIVE times Average Joe's wealth. His $25M net worth means his idea of a vacation can be dropping $100k for a charter flight to the exotic destination of his choice, the finest resorts, chauffeurs, you name it. Heck, he can take $100k and drop it on chartering a Yacht in the Caribbean. Or, what the heck, Extraordinary Joe may just splurge a little and BUY the yacht, chartering it for some income. Average Joe's lifestyle, meanwhile, looks very much like his lifestyle in his 30's (if he's lucky).

A little sacrifice early in life, combined with the smarts to make early investments, can change the entire course of someone's life. In the situation above, after Extraordinary Joe's 5 years of early sacrifice, Average Joe and Extraordinary Joe both put away the very same $2,300/mo, presumably meaning both had the same income potential while working, and they both made the same 8% return. But Extraordinary Joe was either (a) able to retire 20+ years earlier than Average Joe or (b) if he chose to continue working, ended up 5x more wealthy than Average Joe and living a very different lifestyle. When you start doing the math behind it, "YOLO" is a really hard pill to swallow.
 
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There's also a lot more to it than just the financial aspect. Buying a car like this might enable you to "level up" and motivate you to accomplish even more than you think you're capable of.
Do you have an R8 or a supercar?

That's one of those things that my brain has wondered about, and not a lot of people will relate to if you're not running a business/able to increase your annual earning/earning 6 or multiple 6 figures a year.
 

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Do you have an R8 or a supercar?

That's one of those things that my brain has wondered about, and not a lot of people will relate to if you're not running a business/able to increase your annual earning/earning 6 or multiple 6 figures a year.
I've owned 2 R8's and currently own a Huracan and GT3RS. I don't own a business, but I'm an Executive level at a large corporation with a multitude of investments in financial markets and real estate.

Prior to owning an exotic car, I was hungry and driven, but not to the point that I am now. Through cars, I've met people in the community that have influenced, motivated and mentored me to aim higher and achieve more. Most of these people would never have bothered to engage me outside of this "community" or "brotherhood".

Also, once you catch the exotic car bug, it's never going to be enough. You'll keep wanting more. I used to look at cars thinking "if I can have that, I'll be set for life." Yeah, that doesn't last long. The constant urge for more will drive you to strive for more.

Make the investment in yourself and you won't regret it.
 

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Discussion Starter #48
This can be a recipe for financial disaster and setting yourself up for an unsustainable situation. I'm sure you've heard the saying, "keeping up with the Jones" right? This is exactly the warning of that phrase.

Do you know where the term "mortgage" comes from? Its meaning comes from the term "death pledge." Think about that for a moment. This was a debt that was designed to be with you for life (and often until the end of life). Banks aren't approving you for $X in YOUR best interest. They're approving you for $X in THEIR best interest. If I'm a bank, I want you to take out the very most you can "afford" and pay me a long, endless stream of payments with LOTS of interest piled on. This is literally a drain on your ability to build wealth during your life.

Add fancy cars, fancy vacations, and "going big" because "YOLO"... and these are exactly the types of people who find themselves at 50 or 55 scratching their head because they've finally realized that (a) they don't want to work forever, and (b) they have NO IDEA how they'll now afford to retire in 5 - 10 years... or even 15 - 20 more years!

An important concept that people need to learn is "delayed gratification." There's a difference between people who LOOK rich and those who actually ARE rich. Those who simply look the part rely on their income to buy a lifestyle. If that income stream is ever cut off, their life falls apart. Those who actually ARE rich have figured out that you need to build a self-sustaining income stream that doesn't come from an employer - it's called "financial independence." This only comes from saving and investing heavily - ideally as early in life as possible to allow the compounding effect to occur sooner.

Let's say you're a young urban professional (Average Joe) making $200k/year - Joe's income isn't average (far above it), but his behavior towards finance is very average. Average Joe can buy a nice place, drive a nice car, take two or three vacations a year, go out to eat every weekend, the whole nine yards - "go big." But Average Joe will also need to work forever, and there's a good chance that when the time comes to retire, Average Joe will SEVERELY need to cut back on his lifestyle because he hasn't saved enough to support continuing it. At a safe withdrawal rate of 4% from a well balanced portfolio of equities and bonds, Joe needs a portfolio of $5M to provide that same $200k/year income. $5M is a LOT of money.

Let's say Average Joe, mentioned above, doesn't start seriously saving for retirement until 30 years old - which is still pretty decent, but very average. He'd need to save around $2,300/mo for 35 years, making an average return of around 8% annually, to hit roughly $5M - enough to replace his $200k/year income at a very ordinary retirement age of 65 years old.

Now let's say we have Extraordinary Joe, who finds himself in the very fortunate position to have $130k at 22 years old that he can either (a) spend on an R8, or (b) invest in the market. Extraordinary Joe decides to invest it. He then decides to live very frugally for 5 years (as the OP is doing) with his family, investing $10k of the $12k/mo he's making. After 5 years, at the ripe "old" age of 27, he moves out and lives the exact same lifestyle as "Average Joe" mentioned above - saving $2,300/mo. Extraordinary Joe reaches his $5M investment goal around 43 years old - over twenty years sooner than Average Joe. Extraordinary Joe can then decide to quit his job, travel the world, or do WHATEVER while still in his young 40's with a very nice $200k/year perpetual income from his investments. Average Joe? Well, he's still going into the office... for another 20+ years until he's gray, tired, and burned out.

The moral of the story? Money blown while you're young is worth SEVERAL times that amount to your future self. Blowing $100k in your young twenties is literally the same as blowing millions in your 50's. And that's thanks to the compounding effect of investments... investments you're choosing not to make.

Now, this isn't to say that everyone needs to follow this path in life - it's a choice. But very few people are actually financially literate. They don't understand the dynamic between money spent today and the loss it represents down the road. Many of them don't figure this out until they're in their 40's and 50's, tired of working, and dreaming about the ability to retire one day... only to realize that compounding takes time... time they no longer have. So, they end up in a situation where they're struggling to put away enough money AND hoping to retire by the time they're 65 years old.

But let's say Extraordinary Joe actually does enjoy working and has no desire to retire in his 40s. He now has a LOT of freedom - freedom to switch careers, even into a less lucrative one that he finds more fun. Freedom to start a new business. Freedom to move to a foreign country and explore while working elsewhere. He has "financial independence" - true freedom. Let's say he keeps working, though, and continuing his investment routine, never even increasing his monthly contribution. By his early 50's he's now worth over $10M. By Average Joe's retirement age of 65, Extraordinary Joe is now worth close to $25M - FIVE times Average Joe's wealth. His $25M net worth means his idea of a vacation can be dropping $100k for a charter flight to the exotic destination of his choice, the finest resorts, chauffeurs, you name it. Heck, he can take $100k and drop it on chartering a Yacht in the Caribbean. Or, what the heck, Extraordinary Joe may just splurge a little and BUY the yacht, chartering it for some income. Average Joe's lifestyle, meanwhile, looks very much like his lifestyle in his 30's (if he's lucky).

A little sacrifice early in life, combined with the smarts to make early investments, can change the entire course of someone's life. In the situation above, after Extraordinary Joe's 5 years of early sacrifice, Average Joe and Extraordinary Joe both put away the very same $2,300/mo, presumably meaning both had the same income potential while working, and they both made the same 8% return. But Extraordinary Joe was either (a) able to retire 20+ years earlier than Average Joe or (b) if he chose to continue working, ended up 5x more wealthy than Average Joe and living a very different lifestyle. When you start doing the math behind it, "YOLO" is a really hard pill to swallow.

ezmaass, thank you so much for your incredible advices! If you have any kids, man they are insanely blessed to be your parent. As I said before, they do not teach a single bit of these advices when I was in school, and my parents have never done this. So thank you for providing me these advices!! As much as the other responses makes me so tempted to just get it, I will just “sacrifice” it and wait until later in life to get the R8 when it is the right time. For now, I will continue to grow my businesses and increase my income and invest a ton of my income for now. But, once my income does increase tremendously, i MIGHT pull the trigger, but will very most likely still listen to your advice. I think having balance will be just fine, and where the YOLO mindset may be acceptable. To the point where the R8 is equivalent to me buying a 20-30k car right now.

I do have another plan with investing in investment properties as well. I live in a newly built nice neighborhood and will be planning on buying a new house for me a few houses down from my mom’s house. My mom often gets sick, so I want to be close to her so I can easily take care of her in the future. One of my goals is to make my investment properties pay for my mortgage payments so I can live in my own house for “free”. I’ll be able to park my R8 in my own garage lol.

Anyways, I’d still like to hear any inputs and advices from other members. It is very interesting to me. I’m actually glad I had posted this thread.
 

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I've owned 2 R8's and currently own a Huracan and GT3RS. I don't own a business, but I'm an Executive level at a large corporation with a multitude of investments in financial markets and real estate.

Prior to owning an exotic car, I was hungry and driven, but not to the point that I am now. Through cars, I've met people in the community that have influenced, motivated and mentored me to aim higher and achieve more. Most of these people would never have bothered to engage me outside of this "community" or "brotherhood".

Also, once you catch the exotic car bug, it's never going to be enough. You'll keep wanting more. I used to look at cars thinking "if I can have that, I'll be set for life." Yeah, that doesn't last long. The constant urge for more will drive you to strive for more.

Make the investment in yourself and you won't regret it.
That's rad,dude. I'm fully aware of the bit-by-the-bug. I've driven my share of exotics and supercars - my end-goal is the 458 Italia. Not quite comfortable jumping into that thing just yet budget-wise, though I'm at a point where I'm comfortable looking at stepping into something like a 2014 V10 or V8.

There are no shortage of folks who talk about how bad a financial decision it is etc, so it's kind of refreshing to hear from someone who's jumped in and is enjoying it who also earns well. I feel like if you're good/responsible with managing your money there's no shame in enjoying some of it too. If you're only earning $40k a year, yea, don't do it. :p

I feel like stepping into my first supercar is kinda like the next evolution - it's definitely a stretch in my context, though when I ran the numbers on different payment simulations it wasn't really all that costly for my annual expenses (including personal taxes + paying down the max % on my mortgage over the next 5 years and owning the place outright)
 

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Discussion Starter #50 (Edited)
I've owned 2 R8's and currently own a Huracan and GT3RS. I don't own a business, but I'm an Executive level at a large corporation with a multitude of investments in financial markets and real estate.

Prior to owning an exotic car, I was hungry and driven, but not to the point that I am now. Through cars, I've met people in the community that have influenced, motivated and mentored me to aim higher and achieve more. Most of these people would never have bothered to engage me outside of this "community" or "brotherhood".

Also, once you catch the exotic car bug, it's never going to be enough. You'll keep wanting more. I used to look at cars thinking "if I can have that, I'll be set for life." Yeah, that doesn't last long. The constant urge for more will drive you to strive for more.

Make the investment in yourself and you won't regret it.
This is also a perspective I would have if I were to get the R8 now. Seeing it out my window or in the garage, and driving it everyday will literally make me strive for even more and make me work even harder. It is not motivating driving a Toyota corolla lol. There‘s no other car that I want other than the R8, so I went for a very reliable and cheap car to help me reach my goals faster.
 

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This is also a perspective I would have if I were to get the R8 now. It will literally make me strive for even more and make me work even harder. It is not motivating driving a Toyota corolla lol. There‘s no other car that I want other than the R8, so I went for a very reliable and cheap car to help me reach my goals faster.
The R8 is such a great car. Something always draws me back to it. It also makes a great daily driver and gets way more attention than a GT3RS. I'm sure I'll own another one in the future.

I still remember watching Iron Man and seeing the R8 for the first time. It makes my spine tingle.
 

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Heya Egqjr!
Sounds like you've been getting some good momentum with your online business. There's a ton of great advice here - figure I'd chime in as someone who brings in multiple 6-figures a year from an online business on how I've been working toward getting my first supercar (not there yet, on the way).

First off - how long have you been running your e-comm business and generating $12k/month? Congrats on getting it to that point - I remember hitting my first 6 figures in one year from my online business and it was pretty wild! If you've been consistently banging out $12k/mos for a few years, cool! There's probably an even more 'confident feeling' of moving forward with the car, and that will lead me to my second question.

Second: If you're just hitting $12k/mos, what's stopping you from taking that to $24k/mos, $36k/mos, etc without compromising on being able to enjoy life?

Seems like right now you're in that 'hustle' lifestyle, and if you dig it, cool. I personally would go insane by just doing the 'wake up, gym, work, repeat', though I'm also in my early 30s. There's so much time-saving systems and automation that can be implemented with online work - you might be surprised what happens with the 'right inputs' in your business and you might be able to free up some of your daily hours.

Third: I feel it's really important to define what are the things that would make you feel 'secure' and what is important to you, and build your game-plan from there. That way YOU'RE making the decision based on your truths and what you value instead of just getting a mix-bag of advice from people of all different walks of life and experience.

So let me ask you:
  • How comfortable are you with your money right now?
  • If we were chatting 12 months from now, where would you LOVE to see your business earnings at?
  • Do you have a good buffer account in case things go upside-down and force you to go a few months with a drop in sales?
I wouldn't even feel comfortable considering an R8 til I hit my own personal 'checklist' items, so that's my challenge to you.
 

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Just FYI - in the last 2 weeks, ive had mag ride go out for a repair bill of just short of 12k. Then air filter change for 300 or so. Then oil change for a few hundred. Today i got in my car and AC stopped working. I assume that will be a few grand more. And i need new tires soon which i think is about a grand.

Im lucky that i bought a really good 10 year 100,000 mile warranty and it covered the 12k bill. Hopefully it will cover the AC, but my point is, the running and repair costs can add up quickly. If you finance at 1,500 a month and then get hit with 15k to 25k repair bills a few months later, would you be ok with that?

I have a bunch of motorcycles and cars and sometimes i think about all the other toys and trips i could have instead of the R8. I am 100% happy with R8, but i dont think i would be happy if it was my one big spend in life. Id have missed out on so much else (like a killer motorcycle trip down to Costa Rica).

But again, i can certainly relate to the YOLO crowd on here who say just do it. Just be ready for repair bills and make the decision after doing a thoughtful analysis.

This has been a very interesting thread and fascinating to learn the thought process of so many fellow owners.
 

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Am I the only one looking past financials and reacting to the fact that he just got his license a few years ago? Screw financial abilities, the age to HP ratio equates to his or someone else's death. He needs a Miata.
 

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This can be a recipe for financial disaster and setting yourself up for an unsustainable situation.... Huge long post with tons of great info... When you start doing the math behind it, "YOLO" is a really hard pill to swallow.
This is a terrific post and something that I have tried to preach to co-workers and employees my entire life. I sometimes think that I should have created a different career as a financial advisor because I feel so strongly that so many people are given an amazing opportunity in life and then they squander it.

Small example that I have used: I was shopping for a new car for my wife. We went to the local Toyota dealer and this nice tall dude came up to us and introduced himself. We said hi and nice to meet you and we're here to buy a car. He was working hard to sell us a Toyota and in the end it didn't work out. We later found out that he was a former professional basketball player and was locally famous during his 10 year career. My wife and I were new to the area and don't follow basketball, so he was just another car salesman to us. Here's a guy that probably earned more in a few years than I will earn in my life and there he was, selling Toyotas to us kids who didn't even know who he was. YOLO. How do you want to live your one life?

Take a look around your neighborhood. Probably a third of the people in your neighborhood can't afford to live there and are a paycheck or two away from catastrophe. See all those nice new cars on the road? Nearly 30% are leased. The ones that are "owned" are mainly financed. Some of those loans are 5 years and longer that typically get rolled over into the next new car. Currently in the US there is a concern that 1 in 5 people aren't going to be able to pay next month's mortgage or rent payment due to the unemployment and corona problem. Businesses that were very successful 6 months ago are scrambling to keep afloat. Give us a few more months of pandemic and it's going to get ugly for a lot of people. Take a look at your neighborhood again and realize that in a year it's going to look different for a lot of your neighbors. YOLO. Which group do you want to be in?

The number one priority in your life is to become financially independent. YOLO is all cute and everything when you are young, but there are a lot of people pushing grocery carts down the sidewalk who have some interesting stories to tell about their younger years. YOLO is certainly true, but that one life is a lot longer than 5 or 10 years. Might as well live that one life without being under anyone's thumb.
 

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This can be a recipe for financial disaster and setting yourself up for an unsustainable situation. I'm sure you've heard the saying, "keeping up with the Jones" right? This is exactly the warning of that phrase.

Do you know where the term "mortgage" comes from? Its meaning comes from the term "death pledge." Think about that for a moment. This was a debt that was designed to be with you for life (and often until the end of life). Banks aren't approving you for $X in YOUR best interest. They're approving you for $X in THEIR best interest. If I'm a bank, I want you to take out the very most you can "afford" and pay me a long, endless stream of payments with LOTS of interest piled on. This is literally a drain on your ability to build wealth during your life.

Add fancy cars, fancy vacations, and "going big" because "YOLO"... and these are exactly the types of people who find themselves at 50 or 55 scratching their head because they've finally realized that (a) they don't want to work forever, and (b) they have NO IDEA how they'll now afford to retire in 5 - 10 years... or even 15 - 20 more years!

An important concept that people need to learn is "delayed gratification." There's a difference between people who LOOK rich and those who actually ARE rich. Those who simply look the part rely on their income to buy a lifestyle. If that income stream is ever cut off, their life falls apart. Those who actually ARE rich have figured out that you need to build a self-sustaining income stream that doesn't come from an employer - it's called "financial independence." This only comes from saving and investing heavily - ideally as early in life as possible to allow the compounding effect to occur sooner.

Let's say you're a young urban professional (Average Joe) making $200k/year - Joe's income isn't average (far above it), but his behavior towards finance is very average. Average Joe can buy a nice place, drive a nice car, take two or three vacations a year, go out to eat every weekend, the whole nine yards - "go big." But Average Joe will also need to work forever, and there's a good chance that when the time comes to retire, Average Joe will SEVERELY need to cut back on his lifestyle because he hasn't saved enough to support continuing it. At a safe withdrawal rate of 4% from a well balanced portfolio of equities and bonds, Joe needs a portfolio of $5M to provide that same $200k/year income. $5M is a LOT of money.

Let's say Average Joe, mentioned above, doesn't start seriously saving for retirement until 30 years old - which is still pretty decent, but very average. He'd need to save around $2,300/mo for 35 years, making an average return of around 8% annually, to hit roughly $5M - enough to replace his $200k/year income at a very ordinary retirement age of 65 years old.

Now let's say we have Extraordinary Joe, who finds himself in the very fortunate position to have $130k at 22 years old that he can either (a) spend on an R8, or (b) invest in the market. Extraordinary Joe decides to invest it. He then decides to live very frugally for 5 years (as the OP is doing) with his family, investing $10k of the $12k/mo he's making. After 5 years, at the ripe "old" age of 27, he moves out and lives the exact same lifestyle as "Average Joe" mentioned above - saving $2,300/mo. Extraordinary Joe reaches his $5M investment goal around 43 years old - over twenty years sooner than Average Joe. Extraordinary Joe can then decide to quit his job, travel the world, or do WHATEVER while still in his young 40's with a very nice $200k/year perpetual income from his investments. Average Joe? Well, he's still going into the office... for another 20+ years until he's gray, tired, and burned out.

The moral of the story? Money blown while you're young is worth SEVERAL times that amount to your future self. Blowing $100k in your young twenties is literally the same as blowing millions in your 50's. And that's thanks to the compounding effect of investments... investments you're choosing not to make.

Now, this isn't to say that everyone needs to follow this path in life - it's a choice. But very few people are actually financially literate. They don't understand the dynamic between money spent today and the loss it represents down the road. Many of them don't figure this out until they're in their 40's and 50's, tired of working, and dreaming about the ability to retire one day... only to realize that compounding takes time... time they no longer have. So, they end up in a situation where they're struggling to put away enough money AND hoping to retire by the time they're 65 years old.

But let's say Extraordinary Joe actually does enjoy working and has no desire to retire in his 40s. He now has a LOT of freedom - freedom to switch careers, even into a less lucrative one that he finds more fun. Freedom to start a new business. Freedom to move to a foreign country and explore while working elsewhere. He has "financial independence" - true freedom. Let's say he keeps working, though, and continuing his investment routine, never even increasing his monthly contribution. By his early 50's he's now worth over $10M. By Average Joe's retirement age of 65, Extraordinary Joe is now worth close to $25M - FIVE times Average Joe's wealth. His $25M net worth means his idea of a vacation can be dropping $100k for a charter flight to the exotic destination of his choice, the finest resorts, chauffeurs, you name it. Heck, he can take $100k and drop it on chartering a Yacht in the Caribbean. Or, what the heck, Extraordinary Joe may just splurge a little and BUY the yacht, chartering it for some income. Average Joe's lifestyle, meanwhile, looks very much like his lifestyle in his 30's (if he's lucky).

A little sacrifice early in life, combined with the smarts to make early investments, can change the entire course of someone's life. In the situation above, after Extraordinary Joe's 5 years of early sacrifice, Average Joe and Extraordinary Joe both put away the very same $2,300/mo, presumably meaning both had the same income potential while working, and they both made the same 8% return. But Extraordinary Joe was either (a) able to retire 20+ years earlier than Average Joe or (b) if he chose to continue working, ended up 5x more wealthy than Average Joe and living a very different lifestyle. When you start doing the math behind it, "YOLO" is a really hard pill to swallow.
Thanks for the reply. I'll start off by saying I absolutely was not referring to a 'keeping up with the jones' mindset, no decision especially financially should be made to 'appear' a certain way to others. Instead I was advocating OP does what he truly wants and shouldn't focus completely on long term. You're absolutely right, when you look at numbers, saving and investing and not spending is the path to more wealth but we all know that right? What you've given is a textbook answer, its lacking a real-life implementation and helpfulness. Personally to me, just thinking the way you've explained is short-sighted; it's just focussing on a long term plan/benefit realisation. Short term and medium term are just as important

I look at this stuff realistically. 99% aren't going to live through their twenties saving or investing all their spare cash and not 'blowing' any, even if you tell them - so to 99% of people that advice is useless IMO. If you start to understand the psychology of people/vast majority of young adults then you'll see this and be able to offer advice they have a higher chance of following. Eg psychology of humans = always live within your means. This is where my 'get your biggest mortgage' advice comes from. Vast majority of people will spend their surplus cash, their lifestyle will subconsciously adjust. So 2 people who earn the same; one buys a £200k house, the other buys a £500k house. Fast forward 10 years its almost certain that the latter has more wealth than that former. The former will be drawn into spending more money over the 10 years on disposable elements, all while the latter will be paying more every month into his mortgage forcing himself to save. On top of this the latter got the short term benefit of living in a nicer house.

For me, the car is unique, I see it as a passion, and it is for alot of people, it is a dream and not because of 'showing it off' but because we're brought up with motorsport and the love of how cool these cars are. However as I said in my first post (again looking at it realistically) what happens in the real world is if people wait to get it, they end up never getting it. I've had countless conversations with older chaps who say they wish they'd bought one when they could before they had kids etc. I can even see it with a couple of my mates. They could absolutely afford one now comfortably and its their dream but their missus and society convinces them its too risky and years have gone by always with 'I'll get it when this happens' but when 'this' happens theres always something else.

I'm not saying OP shouldn't have a long term plan. I'm saying my advice is it's possible to have a short term plan that plays into a long term plan or don't be afraid to base your long term plan around some short term benefits. Look for realistic ways to have what you want in the short term as well as ensuring it turns into something long term.
 

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Sounds like you are pretty responsible financially. In the end its your choice, you should do what you want. Obviously people have different priorities, if you are one of those people who loves cars, and you already got a daily driver why not? Take the compounding interest advice and invest.

I was in a similar situation as you in my early 20's, the financial markets and housing markets were super unstable in the 2006 time period in south florida. I had the option of buying a house or a car at the time, and luckily for me I was convinced to stay out of the housing market. I bought a really nice car and was living at home still. 3 years later I put a down payment on a house near the bottom of the housing crash. Now in my 30's I bought a R8, but if I had your type of income in my 20's I would have bought a R8. Interest rates are low right now so dont put a big down payment and keep your cash for some opportunities that may arise.

Also that business expense advice above is pretty good.....
 
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