• 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5

If I had a wife she would probably kill me! (But I don't)

Okay maybe I'm crazy but here's my question: I am 54 years old and about to retire with a decent pension and a good amount of money saved. The problem here is I want a Mustang! Am I wrong in thinking that I could finance this with up to a $500 a month payment right out of my brokerage account and I wouldn't even know I was paying it! The $500 a month does not even represent .01% of my savings and assuming a minimal amount of interest made on the account it would be like I wouldn't even notice it. Am I crazy or has anyone else ever done something like this!
Mustang fever
You are right; you wouldn't notice it. I had the same thought, very briefly, when I bought my car last month. Two things against it for me: I've never had payments and don't like owing anyone for anything. Also, you would be paying collision insurance, I believe, for the life of the loan.

By the way, I paid for mine in one shot; and my account quickly filled right back up.
If the 500$ / month represents < .01% of savings, that implies you have $5M available. Why in the world would you finance it? Just pay cash for it. Happy motoring.
Your apparent circumstances are far enough from typical in this forum that typical advice may not matter.  But since you're near starting retirement, I'll offer a basic broadly useful, start-of-retirement thought anyway.  The thought is --  at least mentally, split your portfolio into two pieces.  One you use to create an income stream.  The other stays invested for long term ---  you may decide to get married at age 70.  How you split is up to you.  How you generate income (bonds/interest, or stock dividends, or regular 3% principal drawdown or something else) is up to you.
But the thought, applicable to all retirees, is, when you evaluate an unusual purchase, do so against the income stream, not the portfolio principal.  "One-time" expenses have a way of turning into recurring habits.
For you individually, you said nothing about your expenses and spending habits.  Basically, a $55,000  (or $500/mo) car compared to a $5M portfolio or a resultant $150K income stream does not seem exorbitant.  If you had a wife, and if she had any sense, she'd probably thank her financial stars
Good Morning.......no, you are not crazy.  I have a few friends from High School who also want to own a Mustang.  There comes a time in everyone's life when they want their dream car, dream house, etc.  Go for it!  When the salesman starts discussing payment options, at the appropriate time, casually mention you'll be writing a check, and watch their jaw drop.  As for me, my dream car is simple......I want a red one, large enough to haul around more Japanese Maples!
[quote pid='368' dateline='1542800788']
If the 500$ / month represents < .01% of savings, that implies you have $5M available.  Why in the world would you finance it? Just pay cash for it.  Happy motoring.

Beat me to it. I always pay cash. If I don't have the cash, then I can't afford it and the wife would kill me

I bought a new 2014 Subaru WRX Hatch (last year for the hatch so I "had" to have one. Yeah, i know a young guy car. But with snow tires and AWD, yeah I can go anywhere. My wife just chuckled and ask "I thought you where buying a quiet luxury car???" Anyway, I did not take from any savings bucket......well I mean I had $15K in my personal account, so I got busy, sold some guns, bikes, stuff that was sitting, did OT, really hustled, worked extra here and there. Whammo, had another 15K in a matter of months.

Enjoy the car. No street racing!!
Go for it!!  You didn't say if it was a Mustang car or a Mustang aircraft  Big Grin

However, I recommend first you take some money you have in cash and IRA's and invest it with a purpose!  When you've made enough profit to equal twice the value of the car, use your profits and buy the car.  Repeat: Reinvest your principle and your profits for your next bucket list item....Nothing like having a great goal to spur you on to investing with a measured, cautious pace and a meaningful purpose.


It's been a very enjoyable experience for me and I throw one more caveat into the formula.  I give 10% of my profits annually to charity(s).

Life is good....may the force be with you!
The annual payment represents roughly 1% per year of your net worth (with your defined/revised numbers). If you have earned income to offset the expense, then it might makes sense. I would purchase a slightly used version for a 35% discount, and pay cash (or 0% financing if available). Mustangs are my favorite too, I sold mine when I retired, I am considering another ragtop Stang. ( revised the % of NAV...don't know what I was thinking either)
The fact that you asked this question in the first place tells me that you are generally conscious about your finance and budget, rather than being a typical over-spender who get into trouble with buying a mustang today, a luxury watch next week, a boat next month, and so on. So my overall take is, if this is something you want for whatever reason (e.g., you dreamt of owning one for long, it will lift your spirit, it will help your enjoyment, no more deep sighs when you see another mustang passing by, or any other reason), AND this is not going to be a financial disaster (the one-time payment plus the recurrent increase in insurance, gas, etc.), AND will not affect anyone else negatively (e.g., one suddenly turns from a responsible driver to a reckless one), then one should simply go for it. What is the worst that can happen if it turns out to be a bad decision? Will it be anything more than losing a few grands? Can such worst-cases happen even otherwise that you do not have any control on? Would you be okay to take the loss given that you at least owned something that you wanted to own, even for a short time? From the information you provided, it did not feel that way - but you are in a better place to evaluate this.
I strongly believe that people should do things that make them happy and not sacrifice them for incremental improvement of financial security. So it probably will come down to the question of whether to pay upfront vs taking a loan, buy or lease, etc., NOT whether to own it at this time. If I had passion for cars, I'd rather own it now rather than when I'm 90.
I bought the most expensive home stereo system right after getting my first pay. At that time, it costed a few months pay. My (late) dad was very upset with me because he thought this was an "irresponsible decision". He was not in a position to evaluate how much the crisp sound of the classic rocks meant to me - Shine on you Crazy Diamond, Paul McCartney's bass-line on Something, etc. - and what difference a good sound system made. I paid off the system within the first year. Glad that I made the decision at my young age - I've developed a hereditary hearing problems in recent years (nothing to do with hearing music) - so it'd have been an unfulfilled dream forever had I waited long.
My margin account pays for a Mercedes, monthly Payment... between the dividends and options I make it easy makes the payment with touching the Principal. It's all about the monthly cash flow that never ends. Never pay cash for big ticket items.

Forum Jump:

Users browsing this thread: 1 Guest(s)