Type R Owners, How much do you make? Financial advisers chime in.

2018ST

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The one thing you should keep in the back of your mind is your health. I work with a guy that just retired today because he has stage 4 lung cancer. He put off buying toys so he could retire. He admitted he missed a lot of fun putting away everything he could. Just remember life is short and there is no reason why you can't have fun while you are living it!!!!
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rraayy3

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You speak in absolutes when, as always with finance, *it depends*.

You understand that an investment return only gets made if you make the investment. smdh.

If you have 20k, how are you going to invest that 20k if you spend it on a car. You think you can get a cash loan for 2-3%? lol.

Whereas if you get a car loan, you can invest that 20k, make more than 2-3% return and pay the loan and the dinky interest of 2-3%. I'm also not talking about overextending yourself - the ability to pay the loan down to zero at any time is an option.

Also, if we're talking about depreciation, guess what car sells for more than MSRP used. Guess what car will have a flatter depreciation curve over time. Penny wise, pound foolish.
1. Yes, I earn between 2-3% on my money.
2. No investment is guaranteed to outperform that loan over the duration of the loan (equity volatility, which most people think they have the stomach for until things drops 10+% ... look no further than December 2018)
3. If you're not talking about overextending yourself, than why take out the loan in the first place? Why not pay off the car, owe nothing, and invest monthly/quarterly/annually with the payments you aren't dishing out every month to a finance company [all while your more expensive depreciating asset depreciates]?
4. According to J.D. Power, the Honda Civics depreciate about the same % across a 5 year period: https://www.jdpower.com/Cars/Compare-Cars#
- the stupidity of people paying more than MSRP doesn't make it a wiser choice either. In fact, even dumber financial decision.

Have a great day!
 

rraayy3

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The one thing you should keep in the back of your mind is your health. I work with a guy that just retired today because he has stage 4 lung cancer. He put off buying toys so he could retire. He admitted he missed a lot of fun putting away everything he could. Just remember life is short and there is no reason why you can't have fun while you are living it!!!!
there is a fine line to saving/investing, hence why in my initial post I included the "not eating cereal and spaghetti 7x a week without leaving the house in order to pay for a car" comment.

Life is to be lived, for sure. It's actually the little things daily/weekly that add up to be tremendous wastes of money that people don't think about. $5 here, $10 there ... it adds up quickly.
- I never buy take out (breakfast, lunch, dinner) during the week, nor do I "go out" during the week much (Work hard, play hard on weekends is my general approach). I make my own coffee, bring my own lunch, and make dinner at home. it is exponentially cheaper, healthier, and allows me to save a ton of money that others nonchalantly piss away
--Girl in my office: daily Starbucks/breakfast, orders lunch at office, is spending over $6,000 a year that I'm not ... this is how I'm able to save/invest/enjoy my weekends/be debt free/travel wherever I want.
- There is a balance between "doomsday I never lived my life" and being wreckless financially. That balance is hard to find, but it does not include buying a sportscar and living in your parent's basement.

Back to original OP, No you probably shouldn't be getting a Type R ... yet.
 

boosted180sx

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The one thing you should keep in the back of your mind is your health. I work with a guy that just retired today because he has stage 4 lung cancer. He put off buying toys so he could retire. He admitted he missed a lot of fun putting away everything he could. Just remember life is short and there is no reason why you can't have fun while you are living it!!!!
i've lost a few friends and they were still like high 20s - low 30s so I totally agree. You just never know what's going to happen. I just enjoy life the way I want it and not worry about what others think is smart or dumb. In the end, it is your life and your money.

- I never buy take out (breakfast, lunch, dinner) during the week, nor do I "go out" during the week much (Work hard, play hard on weekends is my general approach). I make my own coffee, bring my own lunch, and make dinner at home. it is exponentially cheaper, healthier, and allows me to save a ton of money that others nonchalantly piss away
--Girl in my office: daily Starbucks/breakfast, orders lunch at office, is spending over $6,000 a year that I'm not ... this is how I'm able to save/invest/enjoy my weekends/be debt free/travel wherever I want.
- There is a balance between "doomsday I never lived my life" and being wreckless financially. That balance is hard to find, but it does not include buying a sportscar and living in your parent's basement.

Back to original OP, No you probably shouldn't be getting a Type R ... yet.
Too late, it seems like he already did lol.

Though I do think it's stupid, maybe enjoying the daily starbucks/breakfast/lunch is her way of enjoying life. How do you know that they are not enjoying their weekends?
Everyone has different ideas of fun and is in different situations so i don't judge people by the way they spend their money. Smart or dumb, it's not affecting me one bit.

If everyone had the same mindset as you, all we would see on the roads are civics and corollas. Instead of travelling, maybe they find fun in driving around in their bmws/audis :dunno:
 

idragmazda

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That 2-3% loan eats into investment returns, on top of the fact that taking out a loan on a more expensive depreciating asset (Type R) is not wiser than paying off a Hatch Sport.

Cars are liabilities, not assets. I prefer owing nothing, paying 0 interest, and investing what I’d otherwise be wasting on a car loan for something that costs 2X as much.
A 2-3% loan is essentially free money today.

Why would you tie up 20K in some iiliquid asset when you can put down 5 or 10 and then invest the remaining funds or have the funds for rainy day purposes?

Debt is not a bad word. It can be used as a tool to maximize your lifestyle and life goals. You just have to be prudent about using it.
 


VarmintCong

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A 2-3% loan is essentially free money today.

Why would you tie up 20K in some iiliquid asset when you can put down 5 or 10 and then invest the remaining funds or have the funds for rainy day purposes?

Debt is not a bad word. It can be used as a tool to maximize your lifestyle and life goals. You just have to be prudent about using it.
While I also paid off my Civic loan which was 1.9%, I agree that it's not financially the best thing especially when you factor opportunity cost (the $20k will compound if you invest it even at 1.9%, and earn you more than you'd save paying it off). Even my money market funds are paying like 2.4% now.

So why pay it off? Discipline - if you think of having to pay cash for a car, it'll keep you from buying $40k cars. It's a personal thing, I'm not recommending it. And I kind of wish I had the $20k to put more into gold mining stocks, lol.
 

Slyclone

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I remember 2 years ago I shopped around for a house, while driving a Honda Fit. Only to see the house prices double in value right before my eyes within 8 months. The Civic Si was no longer attainable if was to commit to the bubble.

I'd rather live in a cardboard box and drive an Si, than take the bus from my artificial equity. My time is almost up at 44, after eating fast food everyday for 25 years.. I will spend every penny I make on keeping that lifestyle.

It won"t bother me one bit what they do with the quarter million in life insurance they probably won't pay out when I croak.

Better than saving for that sponge bath in a walker for 5k a month.

Enjoy your CTR.

Yolo.
 

Driveitlikeuboughtit

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1. Yes, I earn between 2-3% on my money.
2. No investment is guaranteed to outperform that loan over the duration of the loan (equity volatility, which most people think they have the stomach for until things drops 10+% ... look no further than December 2018)
3. If you're not talking about overextending yourself, than why take out the loan in the first place? Why not pay off the car, owe nothing, and invest monthly/quarterly/annually with the payments you aren't dishing out every month to a finance company [all while your more expensive depreciating asset depreciates]?
4. According to J.D. Power, the Honda Civics depreciate about the same % across a 5 year period: https://www.jdpower.com/Cars/Compare-Cars#
- the stupidity of people paying more than MSRP doesn't make it a wiser choice either. In fact, even dumber financial decision.

Have a great day!

1. Good for you, you have a low appetite for risk and reward, which changes the math for *you*.
2. Good for you, you're talking about risk again. Nothing is certain but death and taxes.
3. Sigh...you don't understand time value of money do you. My comment about having to make the investment first just flew over your head. Assuming return higher than interest, investing 20k now is better than re-building that 20k and investing it 3 years in the future, even if you're investing as you slowly rebuild it with monthly payments to yourself.
4. How does JD power know what the Type R is going to do in 5 years? It doesn't, it's talking out it's ass like it always does. JD Power is a joke.

In any case, I don't care what others do, I paid the old MSRP so I got a bargain. That other people are paying more than MSRP still is great for my resale value. If I "pay" the same as a 2018 Sport Hatch in depreciation over 5 years, that's a hell of a bargain and totally invalidates your third point. If I pay less, it's a damn steal.
 

VarmintCong

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In any case, I don't care what others do, I paid the old MSRP so I got a bargain. That other people are paying more than MSRP still is great for my resale value. If I "pay" the same as a 2018 Sport Hatch in depreciation over 5 years, that's a hell of a bargain and totally invalidates your third point. If I pay less, it's a damn steal.
There are a few cars where the crazy high resale throws off the math. Type R, STI, in the past a Golf R, but I think not anymore. Special BMWs like M3 Lightweight etc.

I paid like $21k for my '97 GSR sedan. I think a Type R was $25k.

Today the difference in value would be probably a lot more than $4k.
 

rraayy3

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I remember 2 years ago I shopped around for a house, while driving a Honda Fit. Only to see the house prices double in value right before my eyes within 8 months. The Civic Si was no longer attainable if was to commit to the bubble.

I'd rather live in a cardboard box and drive an Si, than take the bus from my artificial equity. My time is almost up at 44, after eating fast food everyday for 25 years.. I will spend every penny I make on keeping that lifestyle.

It won"t bother me one bit what they do with the quarter million in life insurance they probably won't pay out when I croak.

Better than saving for that sponge bath in a walker for 5k a month.

Enjoy your CTR.

Yolo.
... wow.
 


Slyclone

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I am doing well thanks. No worries whatsoever. A modest income, a nice car, a place to live, shower and sleep, a parking spot filled with my dream car. A loving gf, a bit on the side for when I want to eat a steak. Gas money, bills, gadgets, a great gaming rig, a full time job that I will still have when I die. Just like the good old days.

It's okay if your choices are different than mine.

We still have one thing in common.

A Honda.
 

rraayy3

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I am doing well thanks. No worries whatsoever. A modest income, a nice car, a place to live, shower and sleep, a parking spot filled with my dream car. A loving gf, a bit on the side for when I want to eat a steak. Gas money, bills, gadgets, a great gaming rig, a full time job that I will still have when I die. Just like the good old days.

It's okay if your choices are different than mine.

We still have one thing in common.

A Honda.
Glad to hear! Your previous post sounded less than rosey on the outlook
 

rraayy3

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I find that typical co-workers make a lot of bad life choices and have a lot of debt, and want you in the same boat. Ignore them.
My go-to is pointing out to my coworkers how much they waste on breakfast/Starbucks/lunch every day ... it’s always fun to see there face when I present the “You’re spending AT LEAST $6,000 a year ...” closing line.

“I don’t have time to make coffee at home” ... but they magically have time to drive out of the way and then wait on a line. I swear some treat the Starbucks cup like it’s an accessory
 

alexrawdriguez

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Have my own place and a decent car > Live with my parents and drive a Type R or any car in that price range. If you can have your own place and have a Type R even better
 

VarmintCong

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My go-to is pointing out to my coworkers how much they waste on breakfast/Starbucks/lunch every day ... it’s always fun to see there face when I present the “You’re spending AT LEAST $6,000 a year ...” closing line.

“I don’t have time to make coffee at home” ... but they magically have time to drive out of the way and then wait on a line. I swear some treat the Starbucks cup like it’s an accessory
These days you can buy a real fancy coffee machine for one tenth of that annual cost, it'll make the coffee for you. I think it's a lifestyle thing - you certainly don't go to Starbucks if you love coffee.
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