I'm leasing and yes I know leasing is never the way to go. I did own a car for 15 years. Bought new and held it all the way through, put some money into along the way. I sold it off some years ago and according to my math it cost on average about $120 a month...I figured heck I can drive new for a $100-$150 more a month so I did and leased my first car about 4 years ago.
rational. but the point of the article is % of income.. which correlates to the earner's age... and $100/month is nothing for you... for a young guy $100 of QQQ per month compounding at 12.5% per year .. makes a difference of $340k after 30 years when he retires... so...
Mistake in your calculation. The guy making 237k per year leases or finances and for a 2k monthly payment gets a 250k car.
Isn't this just common sense? If you want to get rich from employment you have to do a combination of the following: (i) earn a lot of money, (ii) save a substantial fraction of your income, and (iii) make high investment returns. So if you don't earn a vast salary you are going to need to spend almost nothing, or get extremely lucky with your stock picking. If you earn a lot you still need to save a decent chunk of that, or you could end up with nothing for your retirement. When I was working in hedge fund land, I spent 1.5% of my annual income on a car (we got an especially good deal, as I finalised it the day GM went into bankruptcy). We kept that car for 10 years. I earned quite a lot of money when was working, but more importantly I saved about 70% of my post tax income. My investment returns due to lack of time and compliance were nothing special, slightly behind the index. Results: I retired when I was 39, having made all my bankroll in 7 years, whilst most people earning more than me over longer periods are still working. Spending less means reducing your spending on luxuries, but also spending less on essentials (like transport and housing). It means satisfying your needs, not your wants, or more importantly want peer pressure thinks your wants should be. Just because someone is earning a million dollars a year doesn't mean they have to have a massive house, or a garage full of supercars. Blunty there is nothing wrong with a Hyundai Sonata. Personally I think 1/10 of your income is probably too high if you're earning plenty of money, and probably not high enough for those on relatively low incomes who really need a car (I appreciate that in the US public transport is very limited except in certain cities; whilst a single or couple living in central London really doesn't need a car at all). GAT
Agree if you're talking about "serial leasing"... new one every 3 years. A big upside to leasing is that the cost of ownership (depreciation) and the cost of leasing is about the same for the 1st 3 years. So... you could lease one and see if you like it enough after 3 years to buy it out for the residual. If not, turn it back into the dealer and check out another car. That's better than buying one and after 3 years regretting being stuck with it or having to sell it for less. Years ago I had a Mitsu Montero that I bought out after the initial lease. Ended up with a trouble-free car for 16 years with low operating expenses.
%% Good points on jumping HI!!! LOL Actually he richly understated it low+ i dont blame him for that, but QQQ has averaged much closer to 18%. NOT every year to date QQQ does > 29%.LOL. NOT a prediction; QQQ is about $00.12 or00 .25 off 52 week hi.