ClayJ

Probably can't afford it....

SLRFreak

If your money 'as invested' is making upwards of 15% like most of these guys, why in the world would you pay cash for a car? That's throwing money away. High end car owners ALWAYS finance it, it's the smart thing to do.

DBERRY7578

Sorry. Wrong quote. The one above is the one I intended to quote.

By the way, why take $200,000.00 out of your cash flow and purchase a car if that cash can make more for you by doing something else, unless you have reached the level of the ultra-rich. I believe that most wealthy people purchase toys at the same income percentage as working class people. There are alot of families making $100,000.00 a year, and driving two 40-60 thousand dollar cars, as there are families that make $400,000.00 a year driving $100,000.00-$200,000.00 cars. Personally, I enjoy living very much below my means, but with-out refusing to enjoy some of the material riches of life.
I believe that some people are trapped in the old economy concept of people having to put 20% + down for a house, or buy a car cash in order to show their financial wealth. Todays financial advisors has proven time and time again that putting your money in the right place is more important than avoiding an interest rate of 7.5% and losing the ability to make 20% returns on that same money. The bottom line is the untimate indicator. Hopwever, this does not exclude the person who is completely over-leveraged and in financial crisis, but many people of all income levels are in that boat.

srknutson

Let me know where I can make 15% on my money and I would have enough from investment cash to pay cash for a new SLR every year! 15% is possible, but you must be willing to be patient and or risk loss of capital!

ClayJ

HAHAHAHAHAHAHA!
I hear that ****e!

DBERRY7578

Why is everyone so infatuated with paying off big ticket items in cash. I don't have any intention of ever buying another high end car for cash, unless I don't have a choice. If I would have leased my 65 I wouldn't have a concern with diminished value. Let the dealer sweat that out.
.The best way to escape financial meltdown is by having as much of your cash onhand as possible to recover..

Imagine buying a car cash, and two minutes later it is worth 20-40 grand less. Imagine then you are then forced to sell your possessions at a major discount because you ran into a financial crisis. You just guaranteed yourself a big loss of cash, and little cash to turn to. This will only enhance your downturn.
Then imagine leasing a vehicle with a modest down payment to lower your monthly payment, and you run into a financial crisis. You have a choice of returning the car or trading down and possibly receiving a short term blemish on your credit, and still have cash in the bank to stabilize yourself.

When it comes to recovering from a downturn, cash on hand beats begging someone else to give you a hand any day of the week. The ultra-rich can make cash purchases and not feel a thing. The rich/wealthy can not live by the same rules as the ultra rich without becoming financially vurnerable with little to no cash on hand. Just my professional opinion.

Other peoples money/Not your own.

ClayJ

"Cash is King".
"Doesn't matter how much you're worth on paper or how much money you have -- if you don't have the cashflow, you're broke".
"One of the things you must learn in business - in any business - is how to properly manage debt".

That said? Yes, the Ultra Rich can buy whatever they want, for however much they are willing to pay for it -- doesn't matter if it is a good 'deal' or not, a good 'investment' or not.

This is not the actual reality for everyone else on the planet, be they 'wealthy' or not, as you point out.

Generally speaking, it doesn't make sense to take potential investment capital which could generate a 10% return to pay for an item when that item could be financed at a lower percentage. But is that numerical difference of percentages the true net reality in the transaction? Cashflow, tax considerations, liquidity - and many other factors - may figure in to the true 'net' difference in the method of a purchase.

I will say this: I believe that one should not live beyond one's means; one must know or learn how to properly manage debt and utilize it accordingly; cash is king (and equity and leverage are mere princes in comparison); maintaining some liquidity is essential

-- and I choose to pay cash for all of my purchases, in truth, mostly because I can.

I would never recommend that someone lease a car, any car, for $1000 a month.

What you do, and why you do it, is up to you -- but I would at least recommend to you that you take a pause for the cause, and at least think objectively and critically about and before making any large purchase or expense or taking on any obligation: is it what you should actually do? is it the best alternative among the options available to you? is this the right or best time to do it? are you doing it in the best manner available to you? and finally, what are you missing in the equation?

Just my two billion cents...

DBERRY7578

I guess each individual has to make discisions that best fit their situation, and will allow them to receive the greatest return for their buck!!!

NY C32

I guess that would depend on who you ask.... If going by the menatility of 90% of Americans, I can afford it. The average person would rather live beyond their means and be one sick day away from bankruptcy. I'm liquid and can have enough cash within 1 business day to buy just about any exotic car out there. I'm 37 years old and I personally cannot see buying an exotic car before having my retirement accounts well on their way and owning a vacation home or two with a garage to store it in.

I live in the heart of New York and I drive a car thats nice but not too nice where I'll lose sleep over if it gets a ding or two.

ClayJ

NY C32 - Don't get your drawers in an uproars! LOL

The intent of my post was to add to your comment, "Its one thing to finance or lease a $40, $50, even $90k car because some find a tax benefit since many use their cars for business. If I needed financing to buy a $200k car, I can't afford it." that it isn't necessarily that they can't afford it - they may need financing for another reason, they made need to procure the financing at that point in time to purchase the car but will more than be able to afford ownership, etc. - so that I commented, in italics, that it is more correct perhaps to say that they "Probably can't afford it...." . Just a small, distinguishing, correcting comment on my part. Certainly ny comment wasn't intended to be about you at all - it was about people in general terms as I took your "I" to be in the general sense, such as one might use "one".
I found your comments about your personal situation and philosophy somewhat interesting; and I fully agree that one should make funding their retirement a priority over what might be for that person an arguably not-so-affordable or wise purchase. Hmmmm...hope that helped!