Your car(s) as a percentage of your total assets?

[Rodge]

Footnote: your not a millionaire if you own $1m in property and the bank is owed $990,000.

classic..

And for other dog obsessed owners such as myself, much as i'm tempted too, revaluing your 3 dogs that cost $1,000 each to being worth $1m each bacause they're infintly cute doesn't count either

[RAPID_BA]

young people should at all costs avoid buying a new car early and especially financing it. If that money went into a deposit for a house/unit, in 5 years time, they could sell, get their deposit back and some. Witha car...nothing.

You should always say at the start and end of the year, what do i have to show for all my work this year? if its a battered up car and some empty smoking packets... well..

Its like starting a race about 100 metres behind the pack, never catch them.

[Rodge]

Hulk, I agree in the most part with what you're getting at BUT its also unwise to assume houses always go up. There's also the matter of having fun while you're young with your mates and for that matter attracting the right "mate" Lets be honest, a good car does your chances no harm whatsoever in that regard.

[dimka100]

In the OP's post the notion it was NET was not so clear ... Also if it’s a car purchased on finance the NET logic would not apply as one could spend 5K to purchase a 50K car where there rest is a loan ... hence you can’t just include the NET investment/spending

In this day and age NET means nothing as every single government, business, individual uses a burrowing system to finance their life/operations when it comes to purchasing/acquiring anything significant ... it is simply the way economics operate and trying to work out ones NET WORTH is almost impossible as the market value on good/services/investment is continuously evolving ...

Hence why I think people should think about the GROSS value and work their percentages of that …

[Black F6]

Originally Posted by dimka100

In the OP's post the notion it was NET was not so clear ... Also if it’s a car purchased on finance the NET logic would not apply as one could spend 5K to purchase a 50K car where there rest is a loan ... hence you can’t just include the NET investment/spending

In this day and age NET means nothing as every single government, business, individual uses a burrowing system to finance their life/operations when it comes to purchasing/acquiring anything significant ... it is simply the way economics operate and trying to work out ones NET WORTH is almost impossible as the market value on good/services/investment is continuously evolving ...

Hence why I think people should think about the GROSS value and work their percentages of that …

If that the case im richer than a mutha ****** lol

[riggamortus]

Company car! I get an allowance and a fuel card otherwise I'd probably own something else.

[Cúl-Báire]

I'm guessing around 50%, we paid cash for both our BA XR6, and AUII XR8, also own a little deawoo run about that I really should fix one day)! We don't own our own house but have fairly significant amounts of cash in the bank for a deposit when the time is right.

[GS608]

Probably 90% about now..dont own much still live with the parents..could have saved the $36k and put a deposit on a house or what ever but you only live once, I have 50+ years to own a house and make money off real estate.

[MelsGolf]

Originally Posted by dimka100

In the OP's post the notion it was NET was not so clear ... Also if it’s a car purchased on finance the NET logic would not apply as one could spend 5K to purchase a 50K car where there rest is a loan ... hence you can’t just include the NET investment/spending

In this day and age NET means nothing as every single government, business, individual uses a burrowing system to finance their life/operations when it comes to purchasing/acquiring anything significant ... it is simply the way economics operate and trying to work out ones NET WORTH is almost impossible as the market value on good/services/investment is continuously evolving ...

Hence why I think people should think about the GROSS value and work their percentages of that …

That's a very flawed way of looking at your financial position, all it does is give you a false sense of position.

I might own a million dollars in assets but if today i owe the bank $950,000 im really only worth $50,000.

The reality is your real current position is asset value minus debt value.

[Auslandau]

Originally Posted by 5.0

Probably 90% about now..dont own much still live with the parents..could have saved the $36k and put a deposit on a house or what ever but you only live once, I have 50+ years to own a house and make money off real estate.

....... and by the sounds of the mob you will probably be bagged for going this way. If you can afford it, do it if that is what is important to you

If you have the opportunity to do what you want, just do it. If you sit and judge your life on what you are worth in assets you could find yourself living a miserable life and not enjoying it as you should. If that's important to someone no probs but not the way I see it. As the sayings goes ..... 'You only live once' & 'You cant take it with you'.

Hate to get to a ripe old age, sit back and count my money only to regret not doing everything I wanted out of life ......... and have seen to many of these people asset full but (to me) no enjoyment ....... but to some that is what makes them happy who am I to say.

[martyk54]

Originally Posted by Rodge

Hulk, I agree in the most part with what you're getting at BUT its also unwise to assume houses always go up. There's also the matter of having fun while you're young with your mates and for that matter attracting the right "mate" Lets be honest, a good car does your chances no harm whatsoever in that regard.

Maybe so, but you'll almost always get your money back on a house (unlike a car)... and after all, if you're not buying you'll be renting so a house is only a bad investment if you spend too much.

Couldn't agree more with your point about having fun while you're young. I know guys in their 30s who are on 90k, no kids, have a house w/good capital and still doing overtime, buying clothes at Rivers and stashing away every cent while driving 12-13yr old pieces of junk. These blokes get a 20%+ super package too, I know cause I'm in the same boat. So very secure in other words. I mentioned to them that they're going to be either buying BMWs they won't appreciate in their 60s, or handing their money to some ungrateful squirt who'll **** it up against the wall via a will.

Result? A couple of puzzled stairs...

We're not here for ever... investment is important, life balance is MOST important.

[RAPID_BA]

For those in the" life is short spend up now" boat...

What happens tomorrow? Old bomb car and nothing to show for all your work..

Life is short but investing is increasing your wealth so you can afford a higher and sustainable standard of living. Id rather have a longer term higher standars of living sustainable than one awesome day and years of hardship.

I think 10% of net wealth on cars is the right fit. Seems plenty on here have their heads screwed on right judging by the poll.

[Auslandau]

Originally Posted by HULK_BA

I think 10% of net wealth on cars is the right fit. Seems plenty on here have their heads screwed on right judging by the poll.

There is no way you can judge the right fit! A young bloke living at home ..... an EA 3.2 manual could be 100% of their net wealth .... so can a $50 bike .... so they are doing it wrong? At what stage can you buy the GT you always wanted too. When the opportunity suits or when your net worth is 10%? Boring life that would be!

There is no right or wrong .... its what you want and can afford. As said by martyk54 ... Its about balance. That's all. But if a figure needs to be followed to satisfy well being and satisfaction that is no probs at all.

[pottery beige]

i have a relatively small mortage.. so minimum payments......

i spend the rest on booze, dodgy women and cars that do great skids........

[Auslandau]

Originally Posted by pottery beige

i have a relatively small mortage.. so minimum payments......

i spend the rest on booze, dodgy women and cars that do great skids........

See! Perfect balance!

[XD 351 Ute]

House 30%
Fords and Ford related stuff 70%

It's probably worse than that actually...

Ed

[IDT]

Originally Posted by dimka100

Cars are money pits, and sadly many people do not realise that …

So are houses and everything else that needs maintaining and has associated fees. The only assest that truely appreciates in value is land that you own outright and the cost of ownership is less than the growth in value and located someplace where it won't depreciate because of the decisions of others. Consider a 600sqm block of land. You pay the mortgage interest rate, maintainance (mowing, rubbish removal etc) council rates etc etc. Does this cost you more than the land is worth? Then the government builds a block of public housing units next door. What is your land worth now?

You work hard and you pay your tax's. Do what you want with whats left over... The opinions of others are only worth anything if written on a $100 note.

[z80]

I'm in the less than 10% group...

I have no mortgage or debts and just can't be bothered getting a new car.

Life is funny like that...when I didn't have the money I knew exactly what I wanted.

Missus wanted a wagon last weekend...looked at the Merc 250C.

How I wish there was an F6 wagon.....

[RAPID_BA]

Originally Posted by pottery beige

i have a relatively small mortage.. so minimum payments......

i spend the rest on booze, dodgy women and cars that do great skids........

This is the exception to the best fit. This is every married mans dream.

[Auslandau]

Originally Posted by dimka100

Cars are money pits, and sadly many people do not realise that … …

Yes they are money pits but for you to assume that many do not realise this is sad ....... if someone wants to pour their hard earned into a hobby, passion, lifestyle, interest .... whatever it may be I do not regard that as being sad. To me not doing what you really want to and then realising one day that the time has now passed is pretty sad.

[stev3n]

Most cars are not assets, they depreciate in value, the more you spend up front the more you stand to lose.

There are very few exceptions.

[Auslandau]

Originally Posted by stev3n

Most cars are not assets, they depreciate in value, the more you spend up front the more you stand to lose.

There are very few exceptions.

Does that matter? Buy with this as part of the deal and then it doesn't come as a surprise. If you cannot afford the depreciation ..... you truly cannot afford the car. Buy what you can afford without the whinging about the losses. If you sit and count your worth every night, life can get very boring! Buy what you want when you can and enjoy it ...... and that goes for everything no matter what rocks your boat.

[GS608]

Originally Posted by Auslandau

....... and by the sounds of the mob you will probably be bagged for going this way. If you can afford it, do it if that is what is important to you

If you have the opportunity to do what you want, just do it. If you sit and judge your life on what you are worth in assets you could find yourself living a miserable life and not enjoying it as you should. If that's important to someone no probs but not the way I see it. As the sayings goes ..... 'You only live once' & 'You cant take it with you'.

Hate to get to a ripe old age, sit back and count my money only to regret not doing everything I wanted out of life ......... and have seen to many of these people asset full but (to me) no enjoyment ....... but to some that is what makes them happy who am I to say.

Good to see someone with the same mindset as me. Why be near the end, miserable and rich when you can skid in sideways saying what a great time, I don't regret a thing.

[T3ts50]

I've got all my money tied into my house at the moment, and now only drive a Ford Focus. I could easily buy a brand new car if I wanted but would rather pay off the house as quick as I can.

[DJM83]

Originally Posted by 5.0

Good to see someone with the same mindset as me. Why be near the end, miserable and rich when you can skid in sideways saying what a great time, I don't regret a thing.

Agreed I went through the same thing when I bought my new car. Buy a car or save to buy a house
I can afford the car so why not, my old man was a bit annoyed I bought a new as he is old fashioned (has worked for him though, owns everything and is 50 doesn't work now)
I want to enjoy today for today and I'll address tomorrow, tommorrow. I'm in the position I could probably buy a house but that's my mod money

[pottery beige]

money pits are cool.. it takes dedication to own one.. i like em....

[martyk54]

Originally Posted by T3ts50

I've got all my money tied into my house at the moment, and now only drive a Ford Focus. I could easily buy a brand new car if I wanted but would rather pay off the house as quick as I can.

By all accounts that's fair enough, but really... if you're about wealth building, you're better off pulling your repayments back and investing in something else, which will allow you to build greater wealth and lose tax (shares / investment property). Shares atm.

I was similar a few years back... I think most people find a point of security (some don't), then loosed up a bit. Glad I've reached that point. FG MKII XR6T Ute w/all da extras in the factory as we speak.

[Shonky.]

The trouble with using net assets is that for the depreciating items the net position or equity is nearly always negative except (hopefully) on day one. The exception is if you are making payments at a rate faster than depreciation. I HOPE that all those with late model cars are financing them with equity in the house (and hence paying around 6 - 7% instead of 12 -13%) in which case the slow payments will garantee the net position of car is negative. Perhaps OP meant net position on total assets but not on the car.
For the record my car is worth around 3% of total assets and around 11% of net assets.
Perhaps a better (but still imperfect) measure of how much importance an individual places on a car is % of salary. It seems to work quite well as Execs who spend $60k on a 318i don't REALLY love cars even though to a lot of people its a lot of money, those who spend $300k on a 911 do.
Using that measure my current car was about 26% of salary.
I know in my heart it is the wrong decision but my next one will be around 60 - 68% of salary (mmmmmm, s/c 5.0 arghhhh!!!)

[flappist]

Originally Posted by stev3n

Most cars are not assets, they depreciate in value, the more you spend up front the more you stand to lose.

There are very few exceptions.

Well that depends on what you call an asset.

You could save all your money drive a pile of junk using the cheapest fuel possible.

OR

You could buy an expensive car, drive it whenever possible end enjoy it to the full.

One of these will give you an asset of a lot of money which is worth nothing unless it is spent.

The other will give you the asset of experience and nobility of spirit which can only be acquired over a lifetime.

In the nursing home as you tell your stories of how you did not have a mortgage and spent your life telling everyone how rich and clever you were at saving money you may find that your audience wanders off to hear the guy next door tell how he drove the GTHO at 140mph down the Hume or lapped whatever racetrack in his FPV GT faster than Peter Brock or drove a rag top Mustang around Australia because, in the big picture, those stories are not boring........

[pottery beige]

delete..