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People are stupid, if people were smart about their finances about 95% of people who have an iPhone X woudln't have one, 99% of people who have coach bags woudln't have them.
Back when I was somewhat into premium handbags (Coach isn't a true luxury brand) I used to pay $5--$70 for a Coach bag at the outlet mall. I actually liked Coach's outlet line better because it was less trendy and I could get more years out of it without it seeming dated. Something non-hideous from Target's accessories department would be $40 or so, so pretty much pocket change difference for something I actively use 2-4 times a week. (And then I got bored with the 'designer' look, donated a bunch of the Coach bags to the animal shelter and started buying rather utilitarian Tom Bihn bags that cost as much to a little more than what I used to spend on Coach bags, but that's another thread)
As for the iPhone, I think my old 6S+ works just find and don't see benefit in upgrading. But adjusted for inflation, a lot of the folks financing an iPhone X are paying significantly less for their monthly telecom bill and getting significantly more for their money than someone who was making a moderate number of long distance land line phone calls during the Ma Bell monopoly 1960s.
And that makes more sense than a $30k brand new car?
I drive about 4000 miles a year. So if I buy a $30K four year old Mercedes and sell it for $14K four years later, I've spent $4K a year on depreciation. A brand new car ($30K gets you nothing special) depreciates twice that much on the first day. And I get to drive a Mercedes.
If you're making $300k+ a year and live in a $500k home and have at least $200k invested for retirement, you're worth $1M.
??? If you live in a $500K home and have $200K invested for retirement, you're worth $700K minus any mortgage balance on the house. To be worth a million you have to have assets minus liabilities worth a million. Income doesn't count.
I drive about 4000 miles a year. So if I buy a $30K four year old Mercedes and sell it for $14K four years later, I've spent $4K a year on depreciation. A brand new car ($30K gets you nothing special) depreciates twice that much on the first day. And I get to drive a Mercedes.
??? If you live in a $500K home and have $200K invested for retirement, you're worth $700K minus any mortgage balance on the house. To be worth a million you have to have assets minus liabilities worth a million. Income doesn't count.
Gee, we own three cars. The newest is 10 years old, was purchased used 6 years ago, and has 175,000 miles. My wife's daily driver is 12 years old - bought new with super discounts. My summer fun car is 18 years old - bought used 5 years ago.
Oh, and I worked as an engineer in the auto industry for over 35 years. Even with company discounts I bought half of all our vehicles used.
By all means, if you know of a better way to express this idea, please do so. I know perfectly well that depreciation is a noncash cost, but this is an internet forum and I am not trying to pass a CPA exam.
I agree with him on this one. Cars are a huge net worth killer. Depreciation, taxes, insurance, interest. The opportunity cost of not investing that money is massive. Fortunately for the auto industry, there will always be enough suckers who fall for the "look how impressed by neighbors are" marketing. But if you're on this forum, you should know better.
You can either look like a millionaire or be one - not both.
Buying something you like and enjoy is not necessarily dumb. It might be if it means it catches you short on other obligations but there is nothing wrong with enjoying some of the money you make.
I agree with you to an extent but here's why I think people are dumb, or maybe misguided would be a better word. I really enjoy coffee, it starts my day off right and makes my day. Sure its cheaper to buy coffee and make it at home but that's a little splurge I give myself that I find well worth it. It's a relatively small expense so it's not a huge deal.
With many people, they buy things they shouldn't be buying and they are large ticket items. Also oftentimes these things don't even bring people joy, or they bring them happiness for a fleeting moment and then it's on to the next thing.
If you've always wanted a Mustang since you were 12 years old and your doing okay financially and you make a few sacrafices to buy it and it brings you a ton of joy then awesome.
I'll give you an example of what a lot of peopel do though. My gf's cousin was in Vegas recently and bought a pair of those red bottom shoes for $1800. She was super excited through the weekend, ever since they've sat in her closet because she has nowhere to wear them and says they are uncomfortable. Huge waste of money and a really dumb purchas.e
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