In this article on Yahoo! Finance, it talks about the ratio between the cost of a new car and a family's income.
One alarming fact is that it takes 25 weeks of a person's income (BEFORE taxes) to purchase a new car. If you add in an overall tax rate of 25%, it really takes 33.3 weeks of a person's income AFTER taxes to pay for that car.
That fact alone helps cement the fact that I won't purchase a new car. Throw in the fact that it drops in value about 60% in the first four years, and the cement is dried, hardened, and sealed!
Anyway, as I read further in the article, I happened upon advice from a financial planner where he says the following:
"If someone says 'I always wanted a BMW and I'm 42 and I never had the chance to get one,' we're not going to try and talk them out of it," Lee says. "But we'll take them through the process and help them decide."
You know what he is really saying? He is saying, "I am going to cater to the spoiled-brat 42-year old who has been managing his money without a plan and now wants a BMW because I'm 42, and I want one."
Go ahead and finance the BMW, Mr. I'm 42, and I Want One. I will be here SAVING and INVESTING my money, and should I want a BMW I'll just go pay cash for one.
Do you live near Anderson, SC? Sign up for the Financial Freedom Class at NewSpring Church – class begins on Wednesday, September 19 and costs only $20 per household – childcare provided! You can sign up and pay on-line HERE.