06-04-2012 02:57 PM
Basically what do you largely prefer to spend your disposable income on?
Just going to shoot the breeze here so I may ramble on.
There are some things we don't have a choice in buying. Rent, utilities, groceries, and the like. I personally say you don't need a lot of money to be rich. In my mind being rich is having a lot of disposable income. I can be "richer" than somebody with twice my annual salary, simply because I do not have a car payment nor will I ever get one, while the other person might have one large sub prime auto loan that has had the negative equity rolled over a few times.
In my mind a car is the single biggest factor to crippling the middle class and saddling someone with debt. Being able to manage your money smartly is as easy as knowing the difference between a want and a need. A car is both. You need a car to commute to work and run errands, however you can also want a nice car. A high mileage several years old used car that continues to be well maintained satisfies the need just as well as a brand new 50k Dodge or Nissan super duper maximum thingamajig. However for most people the former won't put them into a huge financial hole while the latter will.
I just got a raise at my job. My monthly disposable income is now between about 600-700 dollars. Plenty for a car payment for a new car. However I continue to drive a 13 year old car with 65,000 miles on it. The reason? A car is just a tool. As long as it gets me where I need to go, there is no reason to get a new one. I just put some work into it the last 2 years. New shocks, struts, tires, brakes, and repaired an oil leak and had the oil pump replaced a few months ago. Expensive repairs sure, but it is a one time expense while even a prime car loan payment is monthly. Just took it for a road trip last week. 1,200 miles round trip and it ran like a charm. Smooth man, smooth. Take care and maintain a car well and no reason why one can't last several decades. 10 years from now I will be happy to be driving a 23 year old car. When the tread on my tires starts getting worn, or the breaks start to squeak, or it leaks oil my first thought is get new tires, brakes, take it to the mechanic, while some people see those things and immediately think they need a new car when in reality they just want a new car as the previous issues are very easy to fix and although it is not particularly cheap, it is much cheaper than a new car. The only case were you probably indeed need a new car is if you need to rebuild the engine, new engine might as well get a new car, but an engine will last several hundred thousand miles if taken care of, making sure the oil is regularly changed and checked being the single most important thing for the health of the car.
I have read some posts and I avoid posting in the auto loan forum because some people in there can't tell the difference between want and need and if I barged in there and spoke my mind I don't think the mods would appreciate that. I once saw a post where someone was behind on their mortgage and was paying down CC debt and was saying they needed (there is that word again) a new car. Now a low price used car will satisfy that need just fine, however this person was adamant that they needed a brand new Nissan something or other for 36k and would not listen to reason that given their financial situation, just fix up their current car or get a cheaper used one. When asked why they "need" a brand new 36k car given their current financial issues the response was that it was none of our business why this person needed a new expensive car while being behind on other obligations (Translation: Precious needs nice things, whether or not he/she could afford them is irrelevant)
It is that kinda thinking that gets people in huge debt trouble. I have 8k left on an 11k student loan that will be paid off in 2 years and I feel like I have a lot of debt over my head and I cant wait until it is paid off I can't imagine how the people with massive student loan debt, morgage, or car loans feel. If everyone only bought cars when they absolutely needed to, and went for used cars instead of brand new everyone would be in such better shape. My student loans are the only installment loans I have ever had, after that a mortgage is going to be the only other installment loan I will ever take out. Cash is king, and being debt free is the way to go. When I get a mortgage I will consider myself debt free as long as the value on the house is greater than the amount I owe.
When looking at ways to save money and maximize my disposable income a car is the single biggest obstacle. Drive it until the wheels fall off. Get decades and hundreds of thousands of miles out of a single car before buying a new one and you are so much better off and will have so many thousands upon thousands of dollars extra of disposable income across your entire life. I love being super frugal with cars. That is honestly the only thing in life I am really frugal on. Grocery shopping, gas, and other things I never price shop or penny pinch I just buy what I need.
An older guy I used to play golf with did like to buy a new car every 5 or 6 years but he never took out an auto loan. He would put away his "car payment" into a savings account every month. Then when he had enough he would pay cash for a new car. That way you technically have a monthly car payment, but the bank is paying you interest instead of you paying the bank. He also has a credit score in the 800's because he has used credit cards for everything most of his adult life and almost always paid them off in full, except for a few occasions when he was younger and had to carry a balance for a couple of months, so having an auto loan is not important for a credit score. Cash, and the bank paying you instead of you paying the bank, is king!
Saw something very funny this weekend driving back from the grocery store. You all know the well known joke and belief that city boys that drive big trucks are compensating for something? LMAO well this truck was one of those full size trucks, think it was a Dodge, and the suspension was raised quite a bit, and had big tires, almost looked like a monster truck. Paint job and bed of the truck was pristine so it obviously is not used for any type of necessary hard work. Across the front of the windshield at the top in big letters it said "Stroke this"
Does anymore need to be said? If that is not factual proof about driving large vehicles to make up for a lack of something elsewhere I don't know what is.
Now I used to work with a guy who drove a super F-350 diesel dualie, and he worked on a ranch and regularly had to tow horse trailers and heavy equipment so he actually had a reason to drive a big truck, but a city boy has no reason to drive something like that unless well, they need to impress someone or feel lacking in certain areas. LOL
I know I just ranted about people who buy cars just now but I can't look down in any way on people who regularly buy new cars. After all the original topic of this thread was what do you like to spend your disposable income on and some people are car buffs and just like to have nice cars. I personally think it is crazy because I see a vehicle as a functional tool, while others see it as a material possession. On the flip side some people probably think I am crazy because I spend my disposable income traveling anywhere in the United States (and soon the world) to watch a US Soccer game. I do love video games as well but I mostly buy used and only a few every couple of months so it is not a major expense.
The most disposable income you are able to spend on things you want and enjoy, then you truly feel rich. Some people want and enjoy new cars, while others want and enjoy travel. If you can manage to spend as much of your income as possible on things that make you happy, then you are definitely rich.
In two years I will be in this city for the world cup and that experience is worth more to me than any car. So what is your little indulgence, or favorite thing to spend your money on? Hope you all enjoyed my long post shooting the breeze and I hope the mods don't mind some of the topics.
06-05-2012 09:25 AM
well, my mouth is open from pure awe that your car only has 65,000 miles on it! that's still practically a new car. lol!
06-05-2012 10:53 AM
I agree with you on the cost of cars today. I bought my 1984 Chevy PU new and I still have it. It is in pristine condition, because I keep it that way. In about a month, it will turn 200,000 miles. I get at least a couple of offers a year to sell it, but that will never happen. I have also had my '39 Ford for 30 yrs now. It is a ground up restoration. So, I guess I will state that is my indulgence in life, along with flying. I am a very conservative person. I don't like living month to month down to the last penny. I think it is just part of my age and how I was brought up. I hate to see people saddled with all of that debt.
06-05-2012 12:56 PM
I'll read in Auto Loans from time to time to keep up with my modly duties, but I have seen some posters who can't distinguish between a need and a want. I've seen some disturbing posts where the poster would justify their purchase due to a "broken down" car and would spend 100%-200%-300% more just as a down payment over the cost to fix their car. If they'd just use the $$$ to fix it they would save thousands in some examples. Another example would be that they are "upside down" on their car and justify a new purchase that way. Anytime you finance a car you are upside down. Or they rush into the process without shopping around and get stuck with a double-digit rate for 5-6 years, and end up spending nearly as much in interest as the car itself.
I understand the need to join into the process. I did too in my not-so-smart-credit days. Even though it's long paid off, I'm still kicking myself for signing at 6 years for 19.9% interest on my minivan. The interest cost alone was something like $18,000. At least I was smart enough to put 25% down (I don't think the dealer gave me any other option). I learned from my mistake. I say let them make their own mistakes. If it hurts bad enough, they won't be apt to repeat them. BTW, I've been on here over 4 years and have seen some of the posters who posted in Auto Loans come back a year or two or three later and post about their repos. We'll help them get back on track and hopefully history won't repeat.
06-05-2012 01:05 PM
Having a beer by my favorite little bar by the shore with my DGF. We don't do it all the time, we'd rather save up for other things, but every once in a while, we'll head there, have dinner and a few Blue Moons with one of the best views of NYC that you could possibly have dinner from in my town.
And we make sure to use whatever card has 5% cashback on restaurants LOL
I won't even comment on the car thing. It drives me banana sandwich. I've purchased both of mine for cash and DGF did the same.
Follow my financial journey: http://www.frugalrican.com
06-06-2012 06:53 PM - edited 06-06-2012 06:55 PM
At the risk of going off-topic, I definitely sense you guys holding back sometimes.
I think it's a lot like a diet; the "healthy" options aren't as yummy for some folks who prefer the Giganti-size #1 with extra cheese. Plus a Diet Coke of course.
A potent analogy methinks. We all crave it sometimes
EDIT: My indulgence is sweet computer parts and pieces to be able to run my mega-budget-spreadsheet.
06-06-2012 11:17 PM
First my indugences... good alcohol, fine women, music (13000 songs on my ipod) and books (about 700 in my apartment).
Cassembler, I guess I should have included Diet Coke in my indugences... I love the stuff! To quote WC Fields, "Don't drink water, because fish f*#@ in it." I will skip the giganti size 1, but I will take the diet coke with amaretto di sarano in it.
Frugal, Try Spaten, brewed in Munich since 1397, a beer is not worth a damn unless it is older than most countries. It is about the same price as Blue Moon, which by the way is a damn good beer! The cheapest stuff I will drink is Corona, I know it is not too good, but it goes so well with a salad.
I use to have a high performance car fetish. That is until my 1966 Chevelle SS, with a 427 decked out, having 650 HP raced a Lambo. I had the Lambo all the way until I maxed out my car at 160. I swear he pulled up along side me, waved, shifted gears and walked away from me. From now on I am only into exotics, but since I cannot afford them right now, I just got a truck. Oh and I have a big truck... Now I will defend myself Last year we got nailed by so much snow, that by the time 2 feet of snow fell in less than 24 hours; I was so tired of spending the entire winter stuck in my drive way. So I went out and bought a new 2010 F150 FX4. I wanted 4wd so I would not be aggravated by winter again. So why buy the upper end version? Well in 2001 I bought a Ranger and hated it 6 months after I bought it. My logic is as long as I am making payments, I want to be happy with it. When I traded the Ranger in it was 10 years old and had only 72k miles on it. This truck I have had for 16 months and only have 8.5k miles on it. I do not drive much, too busy with work and school. Oh, my defense So yeah, there were things I wanted that I could only get on the FX4 version, like electric sunroof. I like a hole in the roof. If I could have got everything I wanted on the base version, I would have, but that is not how new car sales work. No double digit interest for me on that truck, if that would have been the offer I would have walked. I got 1.9% for 72 months, a little longer than I would have liked /shrug
06-07-2012 02:39 AM - edited 06-07-2012 02:41 AM
This is a great topic. I'm usually not long winded nor will I be here but I would have to agree it's not always how much you make or how successful you are as long as your happy. Family, someone to lay next to and wake up with in the morning, Kids that think your best Dad in the world, Good Good beer ("Stone" beer Arrogant Bastard), BBQ, and a roof over your head. The american dream, trust me it is 19 years now in the Marine Corps and I've been all over the world and never to a good place haha. We have it made.
By the way, Brazil looks bad ass! I want to base jump off that status hand!! I'm so doing that!!
06-07-2012 09:13 AM
In two years I will be in this city for the world cup and that experience is worth more to me than any car.
I hope the Brazilians finish building the infrastructure on time - they are rather behind at the moment!!
06-08-2012 02:08 PM
Yarn for knitting (I have enough stash for years), cookbooks and my dogs