I’m just going to come out and say it: I think too many men prioritize cars over so many other things that are needed. And, because men generally have a bigger say in how the household budget is divided between different priorities, money goes towards nice cars over other things like private education or that pretty new kitchen or bathroom that the wife wants or even before buying a house.
I have had the discussion on cars, houses and spending with so many friends, so many times.
I don’t know why I am obsessed with property but I love to know prices in different areas even when I’m not buying.You will often find me pulling out my phone as I pass down a random street to see what prices are like in that area.
So, as you do, we went down to visit a friend and I pulled out my phone to check prices in their area. I wasn’t secretive about it. I started asking if they were planning on buying in the area; if they had started saving for the deposit, etc. etc. It was one of my close friends so I’m interested in her family’s financial success.
They said they did want to buy but hadn’t saved for the deposit yet or set a plan for saving that deposit. That’s all well and good but a few weeks later the husband was debating which upmarket car to drive. Go figure.
Yes, we all like nice things but if we plan and have a proper vision we can build a significant wealth base without having to forego all nice things. Unfortunately this means you might have to live with more standard things in the short term.
What’s the point in leasing a luxury car – BMW, Mercedes, Audi, etc. – if you don’t own your home? In many parts of the world buying now is better than buying later because house prices tend to rise faster than wages.
I have another friend who spent his first bonus from work on a brand spanking new Mercedes Benz only to tire of it a year later.
Cars go down in value the moment you buy them. They are not a real investment.
Yes, I will admit I once bought a new car myself and although I don’t regret it, I doubt I’ll do that again any time soon. I bought it outright (no ongoing payments) and I had my property portfolio already going so I convinced myself I deserved a reward. Would I make the same decision again? In hindsight, probably not but I’m glad I don’t have an outstanding debt to remind me of my not-so-great decision. I could have paid a deposit on another house with that money! Uuuurrrgh
Anyhow, the point I am trying to make here is that, if you or your partner are obsessed with cars, this love could keep you in the rat race a whole lot longer than you need to be.
If you invest wisely you can have your fast car and an investment portfolio that generates all the money you need to pay for your lifestyle. Plan now. Invest now. Have more options later.
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Heather on Wealth
I enjoy helping people think through their personal finances and blog about that here. Join my personal finance community at The Money Spot™.