Should I get an nsx?

[teamu]

Perhaps this post doesn't belong here, but I'd like some feedback as to what some of you would do if you were me, and def. from others ppl who may have been in similar situations prior to purchasing (or not purchasing) the nsx.

I absolutely love the nsx & would love to own one. Think its the sexiest car on the road (thats within budget), and love the handling. But I'm not sure if I *should* get it.

If I were to get an nsx, i would get a used one for at most 30k

Here's my financial situation --
I'm 25.
I've got about 65k in retirement accts (iras/401ks).
I've got about 25k in cash.
Got about 10k left to pay in student loans.
I've got an 05 TL (all paid off).
Got what appears to be a stable job, make ~70k
My financial goal without going into much detail is to max out retirement accts every year (atleast into the mid 30s) to ensure a good 55yo and after. I also would like to save as much as possible in non retirement accounts (but have no problem spending the money on thinks i enjoy).

So now you're probably asking if I've already got a new car why another one? I can't find a logical reason for this. On the practical side, I could let my parents drive the tl if i were to get an nsx (during non winter months) since they'll soon be in need of a new car anyways.

I'm not going to pull the trigger unless I'm absolutely convinced, and right now I'm not. I'm thinking it would be foolish to buy one at the moment, and I should wait a couple years until I have atleast 100k saved up in non-retirement money and that way a 30k purchase wouldn't be all my spendable cash, but then I have this irrational side thats saying "get it now"...

any thoughts as to if I should or not?

 

[NsXMas]

Do you have a house? You may want to buy a house with a garage first, to store your NSX. Otherwise I'd say you're pretty set to get one.

 

[SilverStone05]

If you're not absolutely convinced, don't buy it. A car is a reasonable asset to purchase and you are going to want to think long and hard before you buy something that is ultimately going to be worth much less than what you paid for it. You're going to have to live with it everyday if you aren't completely satisfied with your purchase. If you aren't gung ho, nothing we can tell you can convince you otherwise.

Another option would be to put say maybe 10k down and finance 20. That would be around 330-370/month depending on interest rate. Why not use someone else's money to finance your fun? However, it does suck not owning your car free and clear. You always run into hassles with legal documents/insurance and stuff like that. But the reduction of cash outlay could be worth it for some.

Lastly, I congratulate you on having so much tucked away in your retirement accounts already. I'd like to know how you managed to stuff all that in there already given the gov't limits and your age.

 

[redshift]

Wow, that was a lot of personal info you gave up!

NsXMas couldn't be more right... if you don't have a house then that's your next financial step. You learn so much financially with the purchase of a home, even if you're only going to live there for 1 year. :biggrin:

I'd also suggest paying of your student loans immediately. If you have the money, then why pay the interest. You're probably losing as much money there as you could be making with that same 10K in a low-risk fund! Pay it off and be debt free. :biggrin:

BTW, I'm your age and I bought my home before the NSX.

 

[Pacemaker Kid89]

Do you have a house? You may want to buy a house with a garage first, to store your NSX. Otherwise I'd say you're pretty set to get one.

Yeah a house would be a good thing to have to store your car, also I dont know if this is relevent or not, but are you living with someone (g/f, Wife)? Becase you should ask them if thwey feel confertable with you spending all that money.

 

[TrustJDM]

Purchase the car now and live your youth. You have enough squared away for now, and a bit more savings would not hurt. Not to sound mean, but who knows what can happen tomorrow. As newer cars come out, the NSX may not be as attractive as it used to be. Driving an NSX in your mid-twenties is an experience in itself. If you die tomorrow, at least you've experienced one of the best driving machines in the market. Also, a used NSX does carry its value for sometime so its not like you're going to lose half its value in 2-3yrs. =P

 

[fkong777]

NSX in itself is not a responsible buy. 2 seat, almost no trunk space. It is a true Toy. There is just no practicality to a NSX. Yet many of us owns one and love it.

It will be hard to convince you if you need to be talked into it. You have to WANT it. But to rationalize the "WANT". To dive in without investing too much. Get a early model like I did. Under 30K in investment and probably will not depreciate too much if you keep it up well.

If you are single – be prepare for the attentions like you've never experienced both from Male and Female.

If you are attached – your girl will hate the car and want you to sell it in about a month.

Investment wise you really should have a house.

 

[NSXDreamer2]

my thought is more at the same line of trustJDM, I don't think spending 30k to buy a nsx is a waste of money, especially you are making 70k a year!! What I'm trying to say is how deep your passion is... I know that I will not part with the nsx for long time, and I'm going to buy a car anyway, in that case, with 30k, there's no other better option than a nsx.
Unless,
a. You are not an auto enthusiast.
b. your way of enjoying driving is the occasional blast on public hwy
c. You absolutely have to take more than 1 passenger at a time... (well but you got the TL already)

I also admire you that the thought of buying/helping your parents getting a car. if so, step back and think about a reasonably priced Accord/Camry will set you back 22-30k. Why not spending that to buy a toy (which you seems to have a passion for )for you??

Last but not least, 1 thing I found out between the nsx owners (at local gathering, track, nsxca and nsxprime) is that they have quite loyal to their "baby" (car) and this passion doesn't only apply to the nsx.
In your case, I would ask, you have a 05 TL now, and does driving your TL on your favorite day, with your favorable traffic condition, bring you smile?? I noticed a lot of people who regret buying a nsx DON'T have such a thing in their mind. They simply bought the nsx because they think it's cool, or fast, or look nice to have one.... which they can easily found those quality on other cars as well. Thus losing the point of owning a nsx.

 

[teamu]

good advice/comments here...thanks...

Wow, that was a lot of personal info you gave up!

eh, as long as no one i know is reading this i don't mind my financial situation being in the open...

Do you have a house?

don't own a house, but do have access to a garage

are you living with someone (g/f, Wife)?

no gf/wife. if i had one i doubt this would even be a possibility (unless she was rich).

Another option would be to put say maybe 10k down and finance 20.

This is true, although it wouldn't change the overall financial picture - whether the cost is up front or spread over a few years will still leave me in the same place overall in 3-4 years.

Lastly, I congratulate you on having so much tucked away in your retirement accounts already. I'd like to know how you managed to stuff all that in there already given the gov't limits and your age.

thanks for the compliment. 401k limits were 12k/year (up to 13 now), ira limits 3k (now 4k), so I've contributed about 45k over 3 years, which means I've gained about 20k or so in interest. I also keep my non-retirement acct in the market as well but this is a whole nother topic.

I'd also suggest paying of your student loans immediately.

will probably do this

BTW, I'm your age and I bought my home before the NSX.

awesome -- house & nsx..i'm in envy!

Also, a used NSX does carry its value for sometime so its not like you're going to lose half its value in 2-3yrs. =P

true, if i only kept it for say, 3 years, then I'd get a significant chunk of what I spent back.

If you are single – be prepare for the attentions like you've never experienced both from Male and Female.
If you are attached – your girl will hate the car and want you to sell it in about a month.

:biggrin:

What I'm trying to say is how deep your passion is

This may be the big question. I can say without a doubt that I love driving my tl on any day; don't mind the labor it takes every week or two in keeping it shiny outside and clean inside; and i can only imagine that I'll probably love driving an nsx even more.


thanks for the comments, and feel free to keep em coming. I'm gonna have to think about this. I used to be all about fiscal responsibility but somehow I become a fan of cars and unfortunately it seems the two don't go together. Considering the nerd I am I'll probably end up plotting the numbers in excel to see if I can have the nsx now and still be rich later.

 

[NSXFreak00]

TeamU,

You seem to very responsible with your money (unlike me!)

I'm going to be 24 in a few days, and you make me sick. I have no savings but I do have a 97 NSX :biggrin:

Did you save all that by yourself or did your parents hook you up with a trust fund?! Can you be my financial role model?

If you can put away $10k each year and put it into mutual funds through your 401k...and really if your company has a good matching program like mine, then that means you put in $5k each year (you should yield around 7-9% annually over a long term period in the different funds your company will allow you to allocate money towards)...you should be able to amass ~$2MM by the time you are 55.

Get the NSX...and if you consolidated your student loans before July 1st, then you are getting a very low rate, a lower rate than your perceived opportunity cost of money.

Most importantly, you only live once. My parents were completely unsupportive of my purchase until they saw how happy the car made me! This car, unlike your 05 TL won't depreciate as fast, especially if you are buying a old one for $30k and you take care of it. I bought my car about 6 or 7 months ago, and I can still get the same price or more for my NSX. ( i did get a good deal :biggrin: )

House is never a bad idea, but its not nearly as fun as an NSX.

PS...I plotted the numbers in Excel and did a goalseek to see how much you need to put in yearly to get to $2M

 

[Shumdit]

thanks for the compliment. 401k limits were 12k/year (up to 13 now), ira limits 3k (now 4k), so I've contributed about 45k over 3 years, which means I've gained about 20k or so in interest. I also keep my non-retirement acct in the market as well but this is a whole nother topic.

How does 15K a year invested over 3 years amass 20K in interest? What kind of rate of return are you earning on this money (especially given the market 3 years ago). I would have thought (even at pretty unrealistic rates of return) you would only have about 10K in interest on this over 3 years. Then again, I am doing this in my head, so maybe I am just not thinking clearly.

 

[teamu]

How does 15K a year invested over 3 years amass 20K in interest? What kind of rate of return are you earning on this money (especially given the market 3 years ago). I would have thought (even at pretty unrealistic rates of return) you would only have about 10K in interest on this over 3 years. Then again, I am doing this in my head, so maybe I am just not thinking clearly.

actually i miscalculated earlier, i've actually contributed about 49k, so its about 16k in interest. Not sure what the IRR is on that (too lazy to entry in all the contributions into a program). I've actually seen some wild swings in my accts (Earlier in the summer I had about 20k more in net worth retirement&taxable) but got overconfident and made some bad decisions (live & learn).

Did you save all that by yourself or did your parents hook you up with a trust fund?! Can you be my financial role model?

ha i wish i had a trust fund. saved all myself (so far just over 3 years of working). the mods may not like all this off topic talk? so feel free to pm me if you want more details of my saving/investing philosophy (which i enjoy talking about). Good info btw, I'm sure my parents would be like "wtf is wrong with you" too, although I'm not sure if they'd come around like yours did. How much did you pay for that 97 btw?

 

[NsXMas]

Teamu - fantastic dude. You done good.

The other thing you may want to consider, which what I'm doing, is saving up to buy a business. I have enjoyed working for other people, but I want to be my own boss. My financial advisors and I are looking into buying businesses that are sustainable.

The best feeling will be when I no longer get a salary, but equity from running a business.

What ever you do, you can't do wrong. I congratulate you.

Enjoy the fruits of your labor.

 

[redshift]

good start buddy!

 

[NsXMas]

good start buddy!

Teamu should listen to you. You have definitely done really well compared to 99% of the 25 year olds out there. I'm really happy for kids like you and Teamu, that have your priorities right and are so successful in life.

Wish I was as successful as you guys when I was that young. That 10 mile walk in the snow was a killer. :wink:

 

[mikec]

Yes! if you want one, buy it now. Chances are that if you buy an A rated early car for 30K, you can drive it a few years and probably sell it for more than you paid. Heck. 30K won't even buy a Subaru SUV.

Gee. I wish when I was 25 I had the NSX I have now. But, it's never too late. I'm proof of that!

Best regards
MikeC

 

[ANYTIME]

Have you called your insurance agent to get prices on insuring an NSX?

 

[enesexdreamer]

buy it!! dont look back,.. and drive your worries away. :biggrin:

 

[skinnydoc]

teamu,

I appreciate you candidness about your thoughts, financial situation and I will offer another point of view from the ones already mentioned...

I am a doctor, who are notoriously the worst investors, so take everything below with a grain of salt :smile:

1) financially, a lot of people are saying buy a house first... I disagree - a house is an investment like any other - dont see it any other way! I actually lost a bit of money on my first house with a sale 3 years later (AND I get expert real estate advice from family) - there are a lot of hidden costs that people dont talk about - its a moneysink and a timesink.... so now i rent and invest in the stock market which has done much better for me than any house *I* could buy would (and it sounds like the market has done well for you too as well

2) regards to student loans, one of my wealthiest friends said to me - one of his big financial mistakes was paying off his school loans early. Right now, accrued school loans are at an all time low interest (with a rapidly rising federal interest rate). So thats like FREE MONEY!!! If you owe school loans at like 3-4% and you will make a projected 10% with the market and/or savings over the next 20-30 years, you would be crazy to try to pay off your loans as soon as possible... I owe a HUGE amount of money for school loans and have no intention of paying them off in less than 40 years I am investing and getting a much much better return - this is how I am living well - it is on borrowed money, (but borrowed responsibly - thats the key!!!)

3) As far as having enough money to buy the car - people talk about having enough cash for it, and also will discuss buying vs leasing etc... there is no ONE right answer... it all depends on the "cost" of money for you... i.e. if you can finance at a low rate, and invest at a higher rate, then you should borrow money. In general, I think it is better to finance than lease unless you know for sure that you want to get rid of the car at exactly X point in time.

4) Overall, your financial situation sounds good - most importantly, you are young without a family and can afford to make mistakes. I bought the fun car now so I can enjoy it now before I get screaming kids, arthritis, backaches, and the other baggage. I wish I bought it when I was even younger...
Cars in general are a poor investment financially (but a great one emotionally!!!) so you could minimize the negative impact by following the tips above and getting a car with one of the best residual values around (ahem... NSX)

Good luck!!!!

 

[skinnydoc]

TeamU,
If you can put away $10k each year and put it into mutual funds through your 401k...and really if your company has a good matching program like mine, then that means you put in $5k each year (you should yield around 7-9% annually over a long term period in the different funds your company will allow you to allocate money towards)...you should be able to amass ~$2MM by the time you are 55.

PS...I plotted the numbers in Excel and did a goalseek to see how much you need to put in yearly to get to $2M

P.S. 2M at age 55 (30 years from now) is only worth about 250K today.
money doubles more or less every 10 years (approximately)... at age 55, a new NSX should cost you about $800K. Might as well get it now while its cheap :smile:

 

[redshift]

Good point skinnydoc...

Please remember that my advice is 100% from my own experience, and I'm only 25 so how much experience do I really have? The tips I gave you worked out VERY well in my situation, but may not work for everybody. It seems like you really know what you're doing so any decision you make will be the right one! :wink:

Wish I was as successful as you guys when I was that young. That 10 mile walk in the snow was a killer. :wink:

LOL Frank...err... NsXMas... don't pretend like you're an old man :wink: :biggrin:

 

[nsxsupra]

I should wait a couple years until I have atleast 100k saved up in non-retirement money and that way a 30k purchase wouldn't be all my spendable cash, but then I have this irrational side thats saying "get it now"...

I think you should get it, you are only 25 once. Only downside I can think of is that you will want to buy things for it once you have NSX, just like everyone of us.

You could also wait and use reaching $100k or above as motivation, it is one insanely powerful motivation. I imposed this condition on myself to justisfy purchasing the NSX when I was 21, and I reached $150+k at age 23.

You will be surprised how fast you could reach your goal, if you put all your mind into it and focus on getting there.

 

[Dinan M3]

any thoughts as to if I should or not?

Not enough data. Trivially true: keep maxing out the retirement funding early. Don't know the housing market in NJ, but in Silicon Valley, I suspect we're approaching a local bubble - prices probably won't collapse but probably can't sustain double digit growth (median income doesn't remotely afford the median house). So the rent vs. buy in housing depends upon the market of your target landing spot. Your personal utility function will determine whether buying an NSX now is rational, but don't think of it as an investment but rather as a luxury purchase. If your credit is good, cost of capital for car loans is pretty cheap... Ultimately, I'd say no because for price/performance, even as an NSX lover, I couldn't rationalize it today. YMMV

 

[teamu]

just want to correct that 2m then = ~250k now is true for a 7 percent inflation rate (which is a very high expectation). If the inflation rate is closer to 3 percent, then 2m then = ~800k now. Other than that, I agree with your financing/keeping loans advice is probably a more cost effective option (although don't forget taxes, so 3% interest loan will take about 5% investment gained to match), and good insight into the fact that not everyone makes a killing in house appreciation.

 

[SilverStone05]

How does 15K a year invested over 3 years amass 20K in interest? What kind of rate of return are you earning on this money (especially given the market 3 years ago). I would have thought (even at pretty unrealistic rates of return) you would only have about 10K in interest on this over 3 years. Then again, I am doing this in my head, so maybe I am just not thinking clearly.

No, your thinking is correct. I want to know which funds or what stocks are giving an annualized return of 40% for the years 01-05. I'd sell em to everyone.