Liquid Assets and Expensive Car Purchase

[MinGrey02Stg2]

I was also going to ask how much of that you could put towards your mortgage. Also, it seems as though you are buying used, which I think is smart. Even if your interest rate on investments was better than the rate on the car loan, you lose a ton of value in initial depreciation.

I was in a similar situation as you recently and was looking at the exact cars you were. I decided on a Gen V Viper. I live in South Florida and I see multiple Corvettes (literally a new Z06 somewhere almost every day) and 911s, but never Vipers. The Gen Vs are actually really nice cars inside and don't have the traditional Viper quirks (or at least at a much lesser level). They are awesome performers and you can't go anywhere without someone holding their phone out, taking photos or giving the thumbs up. They are also probably the cheapest "exotic" to maintain.

 

[Buckwheat 1]

Keeping up with Joneses
is a losing battle. Buy a Terminator and let the Joneses keep up with you. Save the rest for a rainy day.

 

[BJCobra99]

Don't forget to factor in taxes and registration on a new vehicle. Paid off our new Powerstroke F350 and the tax/registration bill was 5k. Paying with cash is nice, but it does seem to disappear quick.

 

[AustinSN]

If I walked into $250k, I would pay off my mortgage, put $100k into some decent investments and if you are itching for a fun car, spend $30k to pay down half of it.

At least with a car, it's easy to get out of and isn't life changing. Keep your DD, have a fun weekend car and no mortgage to deal with.

If shit hits the fan and you lose your job, you have a place to live, you can sell the toy and live for very cheap until you find something else.

 

[Buckwheat 1]

If I walked into $250k, I would pay off my mortgage, put $100k into some decent investments and if you are itching for a fun car, spend $30k to pay down half of it.

At least with a car, it's easy to get out of and isn't life changing. Keep your DD, have a fun weekend car and no mortgage to deal with.

If shit hits the fan and you lose your job, you have a place to live, you can sell the toy and live for very cheap until you find something else.

Good advise. We always make the worst financial decisions when the economy is rocking and rolling. Being self employed I recognized early that when you have the ability to pay off the house quickly you should do it. Same with the toys. Live within your means.

 

[Adower]

Wait a few months before you decide to do anything with the money. It’s a large sum of money so your emotions and impulse to buy something are going off. See if you have the same feeling 3-6 months from now.

 

[Bearbo]

What are you looking for?

Street use: 911, Vette, Viper
Track use: Viper, 911, Vette
Cool factor: Viper, 911, Vette
Do you wear a gold chain: Vette, 911, Viper

Savage.

Driven all three. The Viper was the best bar none and got the most looks from the crowd.

Money in the bank or money in the garage. Personally, I would prefer investments and bank but it is your money and you do what you think best. No matter, good problem to have and beats being broke and homeless.

 

[50stangpower]

I'm old school and I believe a hobby shouldn't be financed. With that being said, I'm also learning on investing my money as well.

 

[HillbillyHotRod]

i can be adopted.

 

[03cobra#694]

i can be adopted.

Lol

 

[tones_RS3]

I agree with others about paying off any mortgage or debt first.
You could always use about 130K to pay off debt, put about 50K in the bank as a 'security blanket" and use about 50-70K for a nice toy.

As far as financing goes, I always finance and when I do, I finance for the last terms possibly at pretty good rates, anywhere between 1.9%-2.49%. I always pay off the loans way in advance so I'm not paying much in interest anyways and I haven't put any money down on the last 2 vehicles I purchased.
Good luck OP and keep us posted.

 

[kyle_c_21]

As someone who has been laid off from a job once, I would put 12-18 months of living expenses back before doing anything. Personally, Im a buy and fix up car guy. If you want a more expensive car, use a downpayment to get the interest rate as absolutely low as possible and make sure that is budgeted in your living expenses. I would also recommend paying a chunk down on the principal of your mortgage. In theory your home should gain value while the car will always loose value.


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[MFE]

The smartest guys I know, including the one who owned a purple mustang GT in 1998 and now owns his second Noble, after moving through corvettes, several Vipers, Porsche GT3s and several Ferrari's, don't get burdened by debt. They buy good cars opportunistically, drive the piss out of them for a relatively short while, and sell them while they're still gaining value. They move the profits into better/more valuable cars. They make good livings but aren't Google-rich. In the early days when they can't afford super-cars, they're saving money while enjoying their cars, so they can trade up a level, every single time. 20 years later they're driving Ferrari's. Buy low, sell high, bing bang boom.

 

[ON D BIT]

6-12 months expenses.
Pay off mortgage or get it to 15 year note.
Keep 50 to 100k in investments. Good mutual funds for long term.
Pay for fun car in full.

 

[5.0 Hatch]

I'd pay of any debt including mortgage or if that's already taken care of, put it away and forget it ever existed. I was hit with medical bills a few years back which I never prepared for and it's set me back about 10 years. Just something to think about.

 

[SVT-BansheeMan]

Put 100% on mortgage. Save the rest if any is left. I personally wouldnt buy a car out side my means.

 

[ibleedblue65]

This. You’ve gotta weight your options / interest to see how you come out. It’s usually beneficial to throw down just enough to secure the loan at a decent interest rate, and throw the rest in the Bank.

This is technically true if you have good credit, can secure a low interest rate and you are good at managing your investments but personally I am anti debt. Op personally i would pay cash for whatever you purchase. You will always make a better financial decision when you gotta write that check or hand over that cash then when you are buying with someone elses money. Plus **** debt. I don't want to ever give another dollar of my money to a bank for debt service.

 

[ibleedblue65]

6-12 months expenses.
Pay off mortgage or get it to 15 year note.
Keep 50 to 100k in investments. Good mutual funds for long term.
Pay for fun car in full.

This is good advice

 

[mc01svt]

Dollars dont have any intrinsic value. They already have interest debt on them the day they are printed. Cash loses 3% or more of its value every year because of this and other inflationary mechanisms.

The only way to hedge against this to invest the money and have a yield equal or greater than the inflationary rate. So by making a large purchase in cash you lose money through depreciation of the item and lost opportunity cost which is a double hit.

It is alot wiser to stay liquid and use low interest finance while keeping your cash multiplying in investments rather than it rotting away in a mattress or a savings account.

Cash stopped being king decades ago. It makes no sense to pay cash when you have great credit and access to low or 0% fixed rate financing.

 

[ON D BIT]

Money is not a math game. If it was the above would work. Money is what do I want now game. Because it is those that loan the money will make bank and those that take the loans will lose money.

That's why the banks make 11 figures net every quarter.