Rustyshackleford001

You are preaching to the choir, just as you thought you'd be. I agree with SW05s2k in the sense that lenders make it REALLY easy to get what you want, when you want it, no matter how much it costs. That's why the residential real estate industry is in a mess: Property values on the east and west coasts soared because buyers were willing and able to fork over $750K for a house, even though they made $65K/year.

To answer your questions: 1. Where do you draw the line? A smart person doesn't care what everyone else is doing. He takes care of the priorities first, and only then spends "fun" money on the new [insert passion here].

2. The fact is that people do spend outside their means in order to keep up appearances. Those who do will also be just like their neighbors when the "Foreclosure" sign gets pasted in their window, too... until Congress makes us bail those pinheads out.

3. Here again, I don't think you'll be hearing from anyone who's in over his head. I'm the biggest wanna-be gearhead here, but you won't see me buying a new car until the old one's wheels fall off. I can talk sports without playing for the Spurs [excuse me...Mavericks], just as I can talk cars without taking out enough credit to buy every one I like. The difference is a matter of attitude on the part of the consumer. I like travel more than anything else, but I'd put the family in the poorhouse if I went everywhere I wanted. So, I made it my job. Problem solved.

One final, but related, observation: Am I the only one who thinks there's a huge disconnect between the country's mass consumer population and the Soliders, Sailors, Airmen, and Marines who risk their lives on the other side of the world for them? This hardly seems like a wartime economy, whatever that looks like (I know it isn't supposed to look like this). And now that I've thrown that grenade on the table, I'm going to duck...

Penforhire

Rusty, that's the same diconnect as for our teachers, firemen, and police force at home. Excepting high overtime rates among the LEO's, none of our civil servants make enough to live in our most expensive locations (LA, SF, NYC, Boston,...).

QUIKAG

Charles,

Good points. The reason a 'smart' person should care is that eventually they will have to subsidize the lifestyle that others have tried to live, but couldn't afford to live. Actually, the 'smart' people are already having to do so. The housing market is the first big example. Credit cards and car debt are next. Someone will have to pay the piper and it won't be the 'stupid' people.
You allude to that fact in your Point 2.

[QUOTE]One final, but related, observation: Am I the only one who thinks there's a huge disconnect between the country's mass consumer population and the

TommyDeVito

Prior to having a house...my budget on my vehicles (car payment, bike payment if I had one, insurance for everything, and mods) was a little over $1k a month. I was single, no kids, no mortgage, and I was putting away 15% of my gross. I did that for about 4-5 years and had a blast. I bought a house and am paying for it solo so everything has changed. I live by a budget. I could afford to run out and get a new $40k car quite easily but I've got work to do around the house (roof, new plaster for the pool, and lots of remodeling).

I see the people you are referring to everyday. I mean this is Dallas, TX, plastic city. The home of the 30k millionaires. Subconsciously, driving around so many people with expensive cars everyday wears on you. Just like if you let yourself get pounded by advertisements, it does have a subconscious effect on you. You just have to learn to ignore it. Cars and motorcycles can be more expensive than a drug addict. To tell you the truth, the older I get the less $ I want to spend frivolously. Even when I had 3 vehicles, and was modding them all, I didn't eat out at all, cut out drink tabs, etc, and so on. With the state of the economy right now I'm not really comfortable buying anything I don't have to. I actually traded down cars last summer (S2k --> Si Sedan) so I could get some needed things done to my house and catch up financially from the multiple layoffs I've experienced over the last few years.

y2ks2k

I honestly think I

rai

we are very fortunate for people like your dad and others in the armed forces now and in the past.

rai

you need to have self control

about 4 years ago I had the S2000 for just 1.5 years it was still new etc. but as most people will agree there are better cars.

So I looked at the C5 Z06 which I liked better just didn't want to spend +$25K more than what my car was worth at the time.

So look at that I kept the S2000 (now 5+ years) and I kept that $25K (which I didn't have at the time so it would have been a loan). But given that $25K or whatever you want to call it $600 a month for the last 4+ years. That money more or less in in my savings and/or paid off a debt.

So I am richer (far more than $25K) since it was not a loan but an investment plus compounded over time. probably added $30K to my net worth just by keeping my S2000 (instead of trading it in for something better).

And the C5 Z06 would have lost $20K in value over 4+ years and my already depreciated S2000 lost probably less than $8K in that time.

SO not only did I have less depreciation but also more monthly savings as a result of not getting a nicer car.

Don't get me wrong, I still would like to buy a nicer car just I am aware of the costs or the cost savings if I don't get one.

My friend is always leasing a new car every 2-3 years so he's always with a large bill every month. While I have my S2000 paid off for 4+ years.

ace123

i bought it right out of school with a net worth of -$15k.

my beater $1000 dodge stealth kicked the bucket, and i sold it for $2200. i got married. my wife is in med school, so she brought $50k of debt and is still adding to that.

however, she starts working in a year. right now, at 25, my financial goal for our family is simple: get comfortable on the standard of living provided by my income alone. in a year and a half when she starts earning $50k a year, her salary will go against all our debt. and a few years down the road, we plan to continue to live off of my income and have hers go toward savings and vacations. we'd like to retire early.

and i have a nice car, but i dont get a new wardrobe when stuff starts getting old. we eat out some, but we watch how it affects our budget and make informed decisions. overall, we run the numbers and will soon live below our means.

Chris S

Interesting thread idea!

I've admittedly over-consumed on vehicles (CS, Avalanche, Jetta TDI, KTM SuperDuke, and 2 KTM dirtbikes, all '05 and newer), but they're all paid for ex. the Jetta (to be paid by April) and the Super Duke (to be paid in full end of June due to no interest/pmt. financing). Some of my friends have really nice cars and bikes, and that's rubbed off on me, but at least they're not a drag on my finances. What can I say, it's one of my weaknesses, but I've made the first step towards recovery by recognizing and admitting it. I'm actually very happy w/ all of them, and one of my New Year's resolutions was to not buy any vehicles this year.

My biggest priority is retirement, and I have a well-funded 401(K). My wife and I both max out our 401(K)'s and allowable Roth IRA conts. Once the Jetta and SD are paid off, we'll be totally debt free ex. the mortgage, which I'm aiming to convert from 30 yr. fixed to 15 yr. fixed soon to speed up the paydown.

Other than vehiches and a nice house (which has turned out to be a great investment in just over 1 1/2 yrs.), we live pretty modestly. IMO, freedom from financial stress is more important to me than the pleasure I'd get from any toy!

MrClean

[QUOTE=rai,Feb 4 2008, 09:17 PM]you need to have self control

about 4 years ago I had the S2000 for just 1.5 years it was still new etc. but as most people will agree there are better cars.

So I looked at the C5 Z06 which I liked better just didn't want to spend +$25K more than what my car was worth at the time.

So look at that I kept the S2000 (now 5+ years) and I kept that $25K (which I didn't have at the time so it would have been a loan).