Can I afford an M3?

[quiksi]

I bought my M3 last year at 27, and was in similar circumstances as you when I graduated college at 22, though my financed car at the time was an '04 S2000. It's a good thing I wasn't itching to upgrade at that time!

I definitely see the point of "you only live once", but saving up some cash can only help, and serves as good protection for when unforeseeable things happen. You don't want to face a layoff 1-2 years down the road with an M3 and no savings, for example.

[spmd11]

Buy a Mini Cooper S (JCW) late model, like a 2010 or 2009... save up your money until you can put a significant down payment on a car as expensive as an M.

If you purchase a car like an M at such a young age, it is very possible that you will never make the right decisions to accumulate assets which appreciate and build up a savings for emergencies.

Take it from a 47 year old.

[auggiem3]

OP - smart play.

I know its tempting - and it will probably work out for you if you do it now. But you've worked hard to get where you're at - don't take a small chance of financial failure to satisfy a want - you have a fine ride today - get an M3 later.

Earlier posters shared insightful advice:

1. Never have negative equity in a depreciable asset unless you have liquidity to bridge the gap - right now you could sell your car and get cash back. An M3 with a small down payment might not allow you that flexibility. Don't expect a disaster, but have a contingency plan if one happens. Right now you could move in with the folks (they sound supportive) and figure out your next game plan.

2. You have high opportunity cost associated with other good investments - 401k max, save for a house (huge tax shield at your income level), grad school opportunity, travel, etc.

3. Get established - build your net worth, your resume, and your experience. You make great cash first year out of school so keep the momentum up and buy when you won't strain yourself.

I'd add...

4. Debt capacity is a valuable intangible asset. You have it now - which allows you to be flexible in career decisions. If you need your job to meet your bills, you inherently lose flexibility.

Again, good decision. Good luck - I'm excited for you to join the M crew in a few years.

[Kaylin032]

I agree with auggiem3

You don't want to be the paycheck-to-paycheck guy with an awesome car and a small crap apartment.

If your apartment is $900/mo, it's crap. Sorry. And it's an apartment.

Just because you can doesn't mean you should.

Strategically plan your career and be able to do more than barely afford a nice car.

K

[mdosu]

Originally Posted by Z K

There's a lot of people that live at home with the parents at 22 and they have no problems working and paying for a $70K car... of course that is different for everyone. Given today's economy, it isn't very uncommon for college grads to move back home after school.

Of course the OP's situation is not that and can't justify the cost of such an expensive car. When I made $70K, my limit was $40K on a car. I had a Evo then and even today feels faster than the M3.

Ha! when i made 70k, I had an Evo too, but I paid $24k for my Evo not $40. Personally, I feel the smartest way to buy a car is a pre-owned one, let someone else eat the fastest depreciation rate, I got my 08 E90 for $46k cash in summer 2010, the sticker was $67k on it. (8k miles, no issues/stories)

Yeah, great buy for me. OP, I'm serious, doesn't matter if you buy a Ferrari, get a used car, you can save a small fortune over your lifetime.

[mdosu]

Originally Posted by gatorfast

What??? Do you have any idea what the typical starting salary for a college grad right out of school is? That is if you can find a job of course. I can promise its nowhere near $70k. The only people I knew making that much right out of school were lawyers and thats to be expected after spending 7 years in school.

the top law graduates are easily in 120k territory first year....but then again, that's why it's so hard to get in to the top law school.

[mdosu]

Originally Posted by auggiem3

OP - smart play.

I know its tempting - and it will probably work out for you if you do it now. But you've worked hard to get where you're at - don't take a small chance of financial failure to satisfy a want - you have a fine ride today - get an M3 later.

Earlier posters shared insightful advice:

1. Never have negative equity in a depreciable asset unless you have liquidity to bridge the gap - right now you could sell your car and get cash back. An M3 with a small down payment might not allow you that flexibility. Don't expect a disaster, but have a contingency plan if one happens. Right now you could move in with the folks (they sound supportive) and figure out your next game plan.

2. You have high opportunity cost associated with other good investments - 401k max, save for a house (huge tax shield at your income level), grad school opportunity, travel, etc.

3. Get established - build your net worth, your resume, and your experience. You make great cash first year out of school so keep the momentum up and buy when you won't strain yourself.

I'd add...

4. Debt capacity is a valuable intangible asset. You have it now - which allows you to be flexible in career decisions. If you need your job to meet your bills, you inherently lose flexibility.

Again, good decision. Good luck - I'm excited for you to join the M crew in a few years.

Wow, should end thread here. Great post. Agree 100%.

[ejheverest]

Build Assets/Wealth in your 20's and 30's, not debt.
Also agree-Max out your 401k(16,500/yr) or atleast contribute your company match and open/start maxing out a ROTH IRA each year.
Emergency fund-good idea to have 6 months of bills in a liquid account.
For me, a 30-40k car loan is still a large debt, my girlfriend and myself are lucky and top 3% earners, we don't choose to have any car debt since focusing on building wealth is what we want during our 30's.

Goodluck

Pretend you have the M3 car payment and auto withdraw the money from checking each month into your trading account. You'll be so much better off than the rest of the recent graduates who are living paycheck to paycheck and don't have any downpayment for a house.

[pn_e92]

Originally Posted by Blu_Frg

I fill up once a month, for around $60

Once a month!!!!

Do you even drive? lol

I fill up like once a week.

[taleof2bricks]

Originally Posted by Blu_Frg

....If my career plans pan out, I'll be making around $120K at my next job level.

As for now, I've only been working for 3 months and...I landed this job through sheer effort and networking without anyone nepotism or strings being pulled.

There was another thread on here asking: "too flashy for the workplace?"

I don't work in "corporate America", but from the comments posted, you might be asking for trouble if you show up to work in an M3. Unless daddy owns the business (you mentioned nepotism for a reason ), your boss might not like the idea of some 'kid' under him, parking an M3 next to his Altima. That "next job level" may not come so easily, and all that "networking" could go down the drain!

[WRXXX]

Originally Posted by username11

Don't end up like me folks. http://www.m3post.com/forums/showpos...3&postcount=55

To OP, yeah don't be like this guy ^^^. He's got a small dick therefore needs to be a douche in order to compensate.

[eisenb11]

Originally Posted by username11

What? Maybe for somebody with an arts/medival art/performing art/lesbian horticulture degree. Starting salaries for technical majors are at least 60K, and that's at a state school.

Those days are long gone. Technical jobs are notorious for posting jobs to college graduates with a laundry list of stuff that's impossible to meet if you don't already have significant working experience. Most tech companies have little interest in people with no experience - after all, why hire a new grad for $60k when I can get someone with 10 years of experience for the same price in this market?

I'm not saying those jobs don't exist, but they're a lot harder to get than people seem to think.

Business and finance are higher, sometimes much higher, especially for finance out of a top school.

Most of the business majors I knew in college didn't fair well and ended up being things like the manager of a department store... times are much worse now. Of the 3 recently business school grads that I know two are unemployed and one is making $13 / hour (this second job was better than her first one right out of school).

In the last year I've been to a few recruiting events (on the hiring side at less than top schools) for jobs offering 75K starting salaries, and we had to cancel some events due to lack of interest/insufficient signups.

IMHO people tend to have an overblown sense of entitlement these days. I'm still surprised, however, by the lack of interest. What's the catch?

I've seen this numerous times first hand but people are getting into fist fights at Kohls hiring events while I have reqs open for six months at $250/hr.

What qualifications? Catches? We have positions at my company that pay that to contractors - I can guarantee you that no recent college grad will get anywhere near meeting those qualifications. For that pay, you have to be a subject matter expert.

There are so many segments of industry where companies are desperate to find good people. Whenever I ask people why they don't move into these fields they say "oh, I don't know how to do that." I guess people in high paying fields came out of the womb with their skillsets .

Is the company willing to train? Most often they expect the applicant to have some kind of knowledge in the field... hence "oh, I don't know how to do that."

This is an employers market right now. Competition is so fierce that employers are more than happy to pull the "you're lucky to have a job" phrase right now. They wouldn't be saying that if the market was booming and they had significant fear of people jumping ship.

[galvatron261]

I got mine at 26 years old. Have plenty in the bank and even use some of the excess cash to trade.

I got mine used. Two years old from when I got it. Fully loaded, 12K miles. $50K. I pay $600 a month for it.

Sticker was $73K, so I think I did pretty well. Cars with not as many options are still going for high $40s in my area.

[Brucewonder]

Originally Posted by quiksi

I bought my M3 last year at 27, and was in similar circumstances as you when I graduated college at 22, though my financed car at the time was an '04 S2000. It's a good thing I wasn't itching to upgrade at that time!

I definitely see the point of "you only live once", but saving up some cash can only help, and serves as good protection for when unforeseeable things happen. You don't want to face a layoff 1-2 years down the road with an M3 and no savings, for example.

+1, plus the F series M is coming out...maybe by then you can get a used one for the same price...dont rush it

[48Laws]

$70K is plenty of cash for a fresh-faced 22 y/o straight out of college with zero kids and minimal financial obligations. Live it up. Pay some. Save some. Spend some.

[Lowest_Frequency]

Reading this thread has really made me wish there was an investment/money off-topic board to ask more detailed questions about that stuff. Being 24 and in the same boat as the OP, other than the obvious 401K stuff, I have no idea where to begin to invest. I'm an engineer so have zero class/school knowledge about business and only the basic supply/demand econ.

[Z K]

Originally Posted by mdosu

Ha! when i made 70k, I had an Evo too, but I paid $24k for my Evo not $40. Personally, I feel the smartest way to buy a car is a pre-owned one, let someone else eat the fastest depreciation rate, I got my 08 E90 for $46k cash in summer 2010, the sticker was $67k on it. (8k miles, no issues/stories)

You got some great buys... my Evos were always new - I've seen a lot of horror stories with people buying used and modded Evos. The last one I had was a 2008 model that was a loaded GSR for $40K OTD. The twin clutch Evo MRs are going upwards to $50K.

Even my 08 E90 M3 was $47K before tax 4 months ago which was a "deal" and a couple thousand lower than Blue Book value at the time. Damn used car market is jacked up if used car values are appreciating!

[Blu_Frg]

Originally Posted by Lowest_Frequency

Reading this thread has really made me wish there was an investment/money off-topic board to ask more detailed questions about that stuff. Being 24 and in the same boat as the OP, other than the obvious 401K stuff, I have no idea where to begin to invest. I'm an engineer so have zero class/school knowledge about business and only the basic supply/demand econ.

Investing really isn't all that hard. I dabble with the stock market because everything is so cheap right now. But, at the same time, the market is VERY volatile and reacts sensitively to every piece of macroeconomic news. There's a lot of money to be made and lost in short time frames in this market.

I suggest you read up on investing at investopedia.com and open a brokerage account. seekingalpha.com is interesting to read for viewpoints on specific companies and world economic trends.

And to the people who think I live in a shithole in Boston, I don't! I live in a suburb of Boston with two roommates and we live in a two story house that's split into two 'apartments.' It's definitely not a shithole and it's definitely not a ballerpad -- it's just a cozy house that gets the job done.

[Raptor251]

Originally Posted by 48Laws

$70K is plenty of cash for a fresh-faced 22 y/o straight out of college with zero kids and minimal financial obligations. Live it up. Pay some. Save some. Spend some.

^this

[persian54]

Op is one smart cookie

[Rekrul]

Originally Posted by username11

What? Maybe for somebody with an arts/medival art/performing art/lesbian horticulture degree. Starting salaries for technical majors are at least 60K, and that's at a state school. Business and finance are higher, sometimes much higher, especially for finance out of a top school. In the last year I've been to a few recruiting events (on the hiring side at less than top schools) for jobs offering 75K starting salaries, and we had to cancel some events due to lack of interest/insufficient signups. I've seen this numerous times first hand but people are getting into fist fights at Kohls hiring events while I have reqs open for six months at $250/hr. There are so many segments of industry where companies are desperate to find good people. Whenever I ask people why they don't move into these fields they say "oh, I don't know how to do that." I guess people in high paying fields came out of the womb with their skillsets .



This is a forum for a completely voluntary purchase of a rapidly depreciating asset which costs at least 50K, fulfills the same transportation purpose as a 7K Kia, and consumes 40% more fuel while necessitating premium gas and new $350/ea rear tires every 10-12K miles. Generally not a wise buy for those making $35k/yr. Know your demographic.

You must be BALLIN! Hoes in different area codes ballin!

[Rekrul]

Originally Posted by username11

If you were able to find this forum you should be able to find an equivalent forum for investing. I suggest doing something crazy like going to Google and entering "investment forum."



Yes, I have already posted in the 'profile of M3 drivers' thread: http://www.m3post.com/forums/showpos...&postcount=252

Can you please feed me? You must be swimming in pools of money.