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And you're referring to people on an Internet forum, where folks specifically go to complain! Especially if we're talking about the "Personal Finance" forum, which is literally here for us to discuss financial matters.
Nationwide, I really don't know the numbers without a little research. But it's probably more common than you think, depending on the region... as I said, where I live is obviously an outlier, since I can spit in any direction and hit someone with over $1M net worth. Literally. The duplex I rent would sell for about $1.2M on its own, and probably $2.5M+ if I bought both sides (other one is larger). Since my landlord owns four units total on the lot, he's gotta be worth over $5M. And you'd never know, since he kinda looks like a redneck.
In general terms, pulling from a few sources (some freely available, some not)
$1 million net worth, not including equity in primary residence, is about 8% of all US Households. If you include home equity, then it's likely about 10%, give or take, etc.
$5 million net worth is about 1% of all US Households.
$25 million net worth is about 0.1% of all US Households.
Again, there's some rounding there and a couplefew assumptions and all that, but those are pretty decent estimates overall.
Obviously, you'll find a lot more millionaires ($1M+ net worth) percentage-wise around the Bay Area, New York City, and Washington DC than you will around Des Moines or Tulsa or Wichita or Boise (the Simplots notwithstanding in that last one ). So depending on where you are, $1M net worth may not be terribly uncommon (and of course, certain areas within cities will have a lot of high net worth people - the Upper East Side or Greenwich Village will have a higher percentage of millionaires than most of the Bronx).
I said incorrect about the Honda Accord. You said it loses little value. Now, maybe you meant the Accord loses a small value when you first drive it off the lot after the purchase, but it doesn't read like that. Reading as you posted it, you would be incorrect. The example of depreciation I posted earlier is pretty much spot on to what I have experienced with the Honda Accord and it's depreciation.
What I replied to: You do realize the second you drive your car off the lot it loses a ton of value.................
wow, this guy is supposed to give savvy financial advice but what percentile of net worth do you have to be to have $1 million net worth? This would mean only a fraction of the population would buy new cars and the entire auto industry would bust.
So, what is your income criteria for car affordability? Don't buy a car more than 30% of your annual income is a good test in my view.
the guy is an out of touch fool, How many people have $1 million net worth when many people can't even round up $500 for an emergency. I would buy used until I could afford new, but I would buy an inexpensive new car if I had $500k net worth.
He is insanely out of touch and not living in the real world. He needs to step off his high horse and hang around real people and not other millionaires.
the guy is an out of touch fool, How many people have $1 million net worth when many people can't even round up $500 for an emergency. I would buy used until I could afford new, but I would buy an inexpensive new car if I had $500k net worth.
He is insanely out of touch and not living in the real world. He needs to step off his high horse and hang around real people and not other millionaires.
So why do all these “real†people that can least afford it buy these high price cars?
Never gotten the obsession with used cars on personal finance forums. They make sense over new if you replace your car every 3-5 years, butreplacing a car every 3-5 years is not a smart financial move. If you keep them long term (10+ years), every time I do the math on total ownership costs the differences seem negligible. For one of our cars, it actually favored new if we make it to 10 years...and we are in year 7 without a single repair yet so I don't see why we won't.
I think a better rule of thumb is...don't buy luxury/expensive cars. New vs used is silly. A new Versa can be half the price of a used Lexus. The problem is not the new grad buying a new Corolla. It's them buying a new Mercedes SUV. That even well-worn, is probably twice the price of the Corolla.
Basing a financial rule off such a vague characteristic is always going to be insane.
Never gotten the obsession with used cars on personal finance forums. They make sense over new if you replace your car every 3-5 years, butreplacing a car every 3-5 years is not a smart financial move. If you keep them long term (10+ years), every time I do the math on total ownership costs the differences seem negligible. For one of our cars, it actually favored new if we make it to 10 years...and we are in year 7 without a single repair yet so I don't see why we won't.
I think a better rule of thumb is...don't buy luxury/expensive cars. New vs used is silly. A new Versa can be half the price of a used Lexus. The problem is not the new grad buying a new Corolla. It's them buying a new Mercedes SUV. That even well-worn, is probably twice the price of the Corolla.
Basing a financial rule off such a vague characteristic is always going to be insane.
Here's the thing you aren't accounting for: Yes, older cars do need repairs from time to time, but usually it stays below $1000 per year in repairs as long as you do the required maintenance and don't put a crazy number of miles on it.
On the contrary, the depreciation on a new car is almost always well over $1000 per year. $2000 is more typical, and $2500 even for an "economy" car is not uncommon.
So you are wasting money in the first few years, whether you admit it or not.
Oh, I'm accounting for both factors and you are correct people tend to overestimate repair costs for a well-kept used vehicle. The thing is...depreciation is not a real, immediate cost. It's only realized when you sell. People seem to forget that on here. If you are keeping cars for essentially their entire lifespan anyways...that extra depreciation isn't a realized loss. Add in the fact that (on average) the lifespan of a new car will be a few years longer than a used one and it typically washes out with reasonably priced vehicles.
Anyways, this is all somewhat besides the point. We can run analyses based on average, but there is so much variability at the individual level based on the amount people drive and repair costs I don't find it terribly meaningful. Regardless of which way things go...the difference between new and used is a pretty nuanced financial decision relative to what kind of car you are buying. "Only buy compact cars" would probably be an equally or more effective rule. New vs used just seems an incredibly silly thing to focus on in the grand scheme of personal finance. Even assuming we are looking for an overly simplistic rule suitable for marketing to the general public...I can think of better overly simplistic rules.
Oh, I'm accounting for both factors and you are correct people tend to overestimate repair costs for a well-kept used vehicle. The thing is...depreciation is not a real, immediate cost. It's only realized when you sell. People seem to forget that on here. If you are keeping cars for essentially their entire lifespan anyways...that extra depreciation isn't a realized loss. Add in the fact that (on average) the lifespan of a new car will be a few years longer than a used one and it typically washes out with reasonably priced vehicles.
Anyways, this is all somewhat besides the point. We can run analyses based on average, but there is so much variability at the individual level based on the amount people drive and repair costs I don't find it terribly meaningful. Regardless of which way things go...the difference between new and used is a pretty nuanced financial decision relative to what kind of car you are buying. "Only buy compact cars" would probably be an equally or more effective rule. New vs used just seems an incredibly silly thing to focus on in the grand scheme of personal finance. Even assuming we are looking for an overly simplistic rule suitable for marketing to the general public...I can think of better overly simplistic rules.
Plus, it’s not always a purely financial decision. Once you start to make more money, you can start to take on additional costs to buy back your time. I work enough hours. I don’t want to be taking my limited days off work to take my car in for repairs and maintenance. I don’t want to have to learn how to fix it to save a few bucks. I don’t want to deal with that crap on a Saturday or Sunday.
I want a newer car that chances are is going to just run and let me focus on other stuff I prioritize.
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). So depending on where you are, $1M net worth may not be terribly uncommon (and of course, certain areas within cities will have a lot of high net worth people - the Upper East Side or Greenwich Village will have a higher percentage of millionaires than most of the Bronx).
