{ "media_type": "text", "post_content": "Please talk me out of ordering the new ford bronco for 50k. Background: 26 y/o 2020 grad. After taxes, 401K, and HSA I take home ~6100/month. My current car is 13 years old and on its last leg(s). Current debt is 850/month for income based student loan repayments. I have 6 month emergency fund in savings and 20% of net income goes to brokerage account. Growing up lower middle class my only “I’ve made it” purchase is a bad A double S vehicle I actually want. I also get double steak at chipotle.", "post_id": "607a6605ad9b6e00242196b0", "reply_count": 124, "vote_count": 58, "bowl_id": "59064a3cb12379001006592c", "bowl_name": "Personal Investment Chatter" }

Please talk me out of ordering the new ford bronco for 50k. Background: 26 y/o 2020 grad. After taxes, 401K, and HSA I take home ~6100/month. My current car is 13 years old and on its last leg(s). Current debt is 850/month for income based student loan repayments. I have 6 month emergency fund in savings and 20% of net income goes to brokerage account. Growing up lower middle class my only “I’ve made it” purchase is a bad A double S vehicle I actually want. I also get double steak at chipotle.

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You are doing so well in all personal finance fronts, so I’d say if you want a “I made it” car that you truly enjoy then just get one. Life is not all about saving up enough to live a life after the age of 59.5. At least that’s the way I e been doing, really like cars, changed four cars in seven years, some new some used. It’s not a financial decision, it’s just a lifestyle decision. During that time I’m saving like 20k per year net, so about every two years I use half of the savings to change my car. Yes I could have had another investment property or 100k more in the banks, but rn I still have more than enough saved and invested to be on track for retirement. How’s that so terrible

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You must reward yourself in life! Don’t do stupid decisions but give yourself a reason to keep going. I’ve seen lifetime savers with millions in bank accounts miserable beyond belief. Life is also about the little pleasures and don’t shy to say: cheers to me for making it! Having said that, pay that student loan! It will haunt you forever as the only way out of it is death. Don’t listen to people that keep telling you to “skip” it until later! They never lived a life. I’ve made a lot of dumb purchases in my life including stupid cars that a lost tons of money on but never regretted it! Life is about reward. “Show me the incentive and I’ll show you what I can do” Charlie Munger

likehelpful

Life is ups an downs. While you making plans for the future, God is laughing hard! Live within your means but reward yourself, or you are going to end up like these poor, miserable souls above. Your ex-wife or job loss awaits you. Keep planning for that retirement at 40 with inflation of 8% per annum.

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Important things missing. Color? If you get it you have to get the Sasquatch package. Why not lease? Honest advice don’t do it. Get a used sports car for 30k that’s just as cool if not cooler. And for what it’s worth: no one gaf what kind of car you drive, and a car is not a good way for you to you tell yourself you made it. I’m all for having fun and living it up but a 50k new car is ridiculous for your situation.

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Buy the car and ride on! 🏎

Will you be able to continue to save? You mentioned student loan debt but what about other expenses like rent? 401k? Roth IRA? I have always had a mental block around $450 for a car payment. I would put money down to borrow under $30k. It concerns me that you quoted Tosh. I'm also a little concerned that you're a year out (or less) and you're saying "I'm doing all the right things and I deserve a reward!" Good financial habits take years to develop and see rewards.

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General rule is 401k up to match (0 obvs), then max Roth IRA, then back to 401k. Hell, start with 10% there and you can keep putting the other 10% in GME, crypto or index funds. The 401k has merits beyond the match because it's tax deferred and those little baby pre-tax dollars eventually turn into big fat dollars (and the govt will take some, but you'll have squeezed their juice for 40 years). Anyone who heard an "Encino Man" quote from my squeezing the juice analogy - sorry, you are getting old.

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Wait two years then buy a gently used one, after the hype dies down a bit

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In a perfect world this is what I would do. But car maintenance is beginning to surpass what my current hooptie is worth. I drive vehicles until the wheels fall off, so my thought is buy something I actually want now instead of settling.

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You’ve done so much right, so don’t make this very, very wrong choice - people who are wealthy and self-made know not to drive brand new vehicles off the lot. Drive your paid off vehicle until the cost of annual repairs exceeds the cost of a newer vehicle - and then buy a value vehicle, like a mid-size SUV off of a lease, and put at least 30% down with cash on it or however much you need to to make sure you don’t have to decrease your contributions to your other investments. This is your order of operations: 1. Pay yourself first (fund your investments) 2. Save toward big goals that will be appreciating assets (like a house) 3. Live the rest of your life within the budget you have after 1 and 2 are done - happiness matters but be smart 4. Don’t overpay for depreciating assets - this is how you ensure that you KEEP the financial freedom you’ve worked so hard to build

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I love cars. My lesson learned is only buy 3-4 year old cars. Depreciation hits way less at that point

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Just googled... that is one ugly car. I would think you’re a show off who doesn’t have his financial priorities straight. As your partner, I would request you to drive my car when going out to dinner or places that are not the Grand Canyon. Pay off loans, save for a down payment instead.

likesmartfunny

Here to do what you asked of us.

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If you're going to spend 50k on a car, do better than a Ford. If you can't afford to spend that much, get something more modest (or better, but used) and save up for it later.

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This. I wanted a new, small SUV with a panoramic roof SO much, so 8 years ago I spent $40k on a Ford Escape. $40k! On a Ford!! 🤦🏻‍♀️ I love the car, it runs great, only has 35k miles on it, but looking back I wish I had gotten something less expensive or wayyy sexier for the cost.

likesmart

I bought a car at this price point when I made ~18k a month take home (incl bonus). I would wait

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Strategy& SM w/T1 bonus makes that

You’re only 26. Get a more modest car now. You’ve got plenty of time to enjoy a bad ass vehicle later on. I just made a similar decision at 27 - I can wait another 5-10 years for my dream car.

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You want to live like a rich person? Take half that 50k and invest it and forget about it. By a 25k car instead.

likesmart

A Bronco and double steak? Do you even care about global warming?

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My kids will!

Forget the Bronco, keep saving like crazy and let people know you made it when you retire at 38.

likesmart

As a woman, I’d say a purchase like that is not impressive...especially in a pandemic. If anything, I’d question your priorities/ financial maturity. The women that might be attracted by a car, are probably not the quality “keepers” you want. Spend 10k on a car, take a epic backpacking trip for 2-3 months when travel is allowed with ability to splurge on experiences that make for awesome stories (and maybe you’ll meet someone on your adventures!), invest 30k, and the remaining $ you can use to host big parties when you’re back - meet more people, be a gracious host, etc all things that are more impressive than a car

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Guys don't but off-road trucks to impress girls.

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My question is income based student loan repayment - what’s the balance? If you’re doing IBR, likely not the traditional repayment, so accruing interest like a mutha. I’d try to kill that, then grab a certified pre-owned bronco after a 2 year lease. But, I’m more conservative and frugal overall - but you gotta enjoy life. Btw, I think you’re setting yourself up well, regardless!

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Even a 5 year loan at 0% is about $820/month, which seems really high on a $6100/month take home salary. Buy what you want, but I think you'd do better buy a more modest car and to increase your investments with the extra amount - your future self will thank you.

likehelpful

Yes, I’ve considered buying something for around 10k and just driving it for a few years in the meantime. It depends on how long my current car lasts.

Don’t get a bronco. Get a wrangler

likehelpful

Broncos suck

$6100 a month after taxes, 401k,HSA is highly impressive for a new grad! Go for that Ford Bronco OP! You deserve it.

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The Ford Bronco is sweet buy it

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Nah, don’t be those people. save and invest. Get it as a gently used car, for context I’m class of 2020. Driving a 2007 Volvo, if it drives, just keep it. Don’t buy a new car

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OP, those people for context - in undergrad I worked with this other guy who spends >60% his minimum wage savings into his 2018 Camaro. Sick car but just not wise. We kept in touch and last I talked to him, he enjoys the car but is still broke and now wants a 2021 Camaro. I dropped some extra money I made into a Roth IRA, exponential growth and performance.

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