[Financial Advice] - Buy an e30M or just keep on the road of debt free?

[MJCRO]

I'd go for it. Life's too short, get your dream car while you still can for a decent price. E30 M3's have been skyrocketing in price over the last decade.

[matthugie]

I guess what i'm saying that is i just don't understand why anyone would borrow to buy something that they clearly can't afford. The only reason i bought a house to begin with was due to the fact that interest plus utilities were still adding up less than us renting an 1 bedroom apartment.

Jon

That said, you clearly can afford it as you have posited this scenario. I agree that a lot of people over extend themselves, but nrubenstein is correct. Financial security isn't the absence of debt, it's the proper leveraging of the debt you have. Will the e30 M3 continue it's incredible price increase over the next few years? If you think so, then it might be worth it. You have to balance interest rates vs appreciation/depreciation vs inflation/deflation.
Some of these are speculation, but regardless any investment is a risk.

[bimmerman89]

Being debt free in a time of historically low interest rates is silly.

Carry a comfortable debt load and invest the rest. You may sacrifice some short term piece of mind, but it'll make a huge difference when you retire. Debt free is better than debt crushed, but leverage is a tool that you should use.

Whether you get the E30 M3 or not is a separate question, but paying down debt only makes sense if you don't have better things to do. The only real reason why a paid down house makes sense for many people is that they will blow all their money if it isn't locked up in a relatively illiquid asset.

I respectfully disagree. I don't see how it would matter whether the rates were low or high, there is still a fee for borrowing the money for money that clearly i didn't have.

I want the freedom of knowing that i don't owe anything, and that anything i want and need can be purchased outright.

I guess what i'm saying that is i just don't understand why anyone would borrow to buy something that they clearly can't afford. The only reason i bought a house to begin with was due to the fact that interest plus utilities were still adding up less than us renting an 1 bedroom apartment.

Jon

[mrsleeve]

ah yes the american dream to live in debt up to your eyeballs and indenture your self to the bank for some stuff... yup thats the way to live

[bimmerman89]

Was not easy, and my credit report still bares some scars from lessons hard learned but it will all be ok in the end.

As far as I'm concerned, credit/FICO score is meaningless when you become debt free and choose to live your life that way.

Jon

[nrubenstein]

Being debt free in a time of historically low interest rates is silly.

Carry a comfortable debt load and invest the rest. You may sacrifice some short term piece of mind, but it'll make a huge difference when you retire. Debt free is better than debt crushed, but leverage is a tool that you should use.

Whether you get the E30 M3 or not is a separate question, but paying down debt only makes sense if you don't have better things to do. The only real reason why a paid down house makes sense for many people is that they will blow all their money if it isn't locked up in a relatively illiquid asset.

[bimmerman89]

I like dave ramsey but whats the point in having money if you dont have anything you can spend it on

I guess i don't understand your comment. What im saying is that my current net worth is negative, and would be unwise to spend money on a toy before i would be debt free.

Jon

[bimmerman89]

If it's only a 1 year difference, I'd get the car. No point in saving money your entire life and putting off doing the things you enjoy... there's no guarantee you'll be around to enjoy it.

I understand your point, nothing in life is guaranteed. Anything as far as financial planning with lots of assumptions.
Having said that, the math still doesn't add up in my head. It still would be a 60k investment total.

Jon

[mrsleeve]

Was not easy, and my credit report still bares some scars from lessons hard learned but it will all be ok in the end.

[bimmerman89]

What is your interest rate and term of the loan?

I feel your wisdom and discipline has earned you the leeway to buy THE RIGHT M3. If you are patient, buy the right car and care for it well, it will appreciate. The economy will dictate the size of the market (down economy = lower number of buyers), but it will be an investment.

If you wanted a new 7 Series, that would be a different story. Hehe.

I appreciate the kind words, 3.875% for 30 years. The problem is that currently any income that is besides our monthly budget goes directly at the loan. Meaning there is no extra liquid in savings besides the 9 months emergency month, everything that is extra goes towards the loan.

[bimmerman89]

op. I agree with farbin, but I also hate debt, if it were me I would finish paying off the house, I dont think a e30m will in decent shape will appreciate to 60k in the 5 years it will take you complete your primary goal. I will be 34 in 5 days, we have not a penny of debt in a while now

Thanks for your response, and congratulations on being debt free! I actually don't know anyone personally that can actually say that they are debt free.

I also don't think that an e30m will hit the 60k mark in 5 years.

Jon

[Kevinl]

I like dave ramsey but whats the point in having money if you dont have anything you can spend it on

[xAZxE30x]

How about you call me and I'll give you $40k cash out on your mortgage to do with as you please?? ;)

[mr.vang]

life is too short, just do it. sign NIKE

[ThatOneEuroE30]

I'd do it. If the effects of it minimal to the lifestyle you live then do it.