Income required to comfortably buy an nsx

[gsr.sedan]

Let’s pretend the NSX is being sold today, new for $80k.

I’m single, with no debt. My cost of living per month is $5k. So how much should I be making so that I can have an nsx and still sustain my vida loca :biggrin:

I saw this quote from Forbes.com and I was surprised by how well p-car owners do. “Take the Porsche 911. Its buyers are 86.8% male with the average age of 51 and median income of $390,000.”

 

[lrsudog]

If you put a decent down payment, anticipate maybe a $1400 -1700 per month payment for 60 months.

OTOH, I make about $150K, but have no payments on my $50K NSX (or any of our three cars), other than the $63 per month insurance.

 

[Jonmarsh]

Depends a lot on what your whole approach is to luxuries, and life in general. I don't use my NSX as a daily driver, so for me it's pure luxury and hobby- paid for it outright, from savings. My average take home is about what you describe as your cost of living, but that's what I allow myself after retirement and "regular" savings.

Personally, with the various financial uncertainties the country is facing these days, I'd counsel someone to save that money for 5 years, collecting the interest, too, and then if things are still going great, buy the car- or buy an older one at a more affordable price. Of course, those are all very personal decisions, but as statistics show, an awful lot of Americans tend to live at or somewhat beyond their means.

Pretty conservative advice from someone that was a rock and roll musician when they were young, but coming from not very much money or means growing up, I'm not comfortable with over extension.

For example, at the income level you're talking about, it's prudent to have at least six months expenses in liquid savings that you can tap in the case of job loss and a new job search. If that's your situation, then buying the car with payments like that is probably OK, if there's a reasonable market for your skills.

Otherwise, a more conservative approach to "luxuries" might be a less risky approach. Depends on what you are comfortable with. If you marry, then of course, there's more to consider.

~Jon

 

[s14_tat]

This also depends on where you live. If you live in the suburbs like in south or somewhere that is not a major city like NYC or Cali, you should be able to afford a older NSX no problem. Here in NYC a single bedroom apartment is worth around 200K in a decent area in Queens, where as you can buy a brand new 5 bedroom house down south for the same amount.

 

[NSXGMS]

Let’s pretend the NSX is being sold today, new for $80k.

I’m single, with no debt. My cost of living per month is $5k. So how much should I be making so that I can have an nsx and still sustain my vida loca :biggrin:

The most responsible guideline to follow is that your total monthly expenses not including food, utilities and entertainment shouldn't ever exceed 65% of your total gross income.

If $5,000 are your total monthly expenses and you obtain an auto loan with a payment of $1,000/month your pre-tax income should not be less than $9,230/month or $110,769/year. If your income is less than that you probably wouldn't qualify for the auto loan anyway as the 65% debt-to-income ratio is likely very close to the cutoff for most auto lenders.

As far as Porsche owners go keep in mind that Porsche is considered a luxury brand in spite of it's relative affordability which is unusual for any product, let alone cars. Many very wealthy folks choose Porsche over a higher-priced competitor even though they could afford more so it's no wonder their owners' income figures are on the high side.

 

[Sarge]

add up all your bills and get a total.
leave out smokes, boose, dvd rentals, etc..
but really include gas and the thought of where you live
if you still have enough for the car and payment and the risk of damage or theft is low, then go for it. but like they said above, have a savings in case of a job loss. you dont want your first action to be to sell the car.
basically just do some general math. on 4,700 month I make an over extended house payment, 2 cars, insurance, water, eletric, power, food, etc.. yea its possible, i guess like they said above it matters where you live, especially under 6K a month. sure as hell im not moving to NYC and pay 9.75 for a pack of smokes

 

[DutchBlackNsx]

Depends a lot on what your whole approach is to luxuries, and life in general. I don't use my NSX as a daily driver, so for me it's pure luxury and hobby- paid for it outright, from savings. My average take home is about what you describe as your cost of living, but that's what I allow myself after retirement and "regular" savings.

Personally, with the various financial uncertainties the country is facing these days, I'd counsel someone to save that money for 5 years, collecting the interest, too, and then if things are still going great, buy the car- or buy an older one at a more affordable price. Of course, those are all very personal decisions, but as statistics show, an awful lot of Americans tend to live at or somewhat beyond their means.

Pretty conservative advice from someone that was a rock and roll musician when they were young, but coming from not very much money or means growing up, I'm not comfortable with over extension.

For example, at the income level you're talking about, it's prudent to have at least six months expenses in liquid savings that you can tap in the case of job loss and a new job search. If that's your situation, then buying the car with payments like that is probably OK, if there's a reasonable market for your skills.

Otherwise, a more conservative approach to "luxuries" might be a less risky approach. Depends on what you are comfortable with. If you marry, then of course, there's more to consider.

~Jon

I agree 100%. Everytime i see a post like this come by on prime, i'm suprised how many people choose luxury living over the basic needs of living.
For myself, i made sure i had all the basic needs in life first, such as a house (bought with mortgage), a good relaible daily driver, everything you need.
Then save money to get luxury things, but only if you can afford the maintanance and make sure you can still do the other things in life you enjoy such as expensive vacations buy clothing you like, and also have a bit of a buffer to life a good amount of time on when you get in a position where you dont have an income, where i choose for a timespan of 2 years.
Having your own business, you also have to make sure you can invest in your company for growth and replacement of expensive needs.

I always say to myself, that whatever i buy from savings, i STILL finance, because i have a mortgage on my house. So basicly, if you finace a car (loan, lease whatever), AND have a mortgage, you pay double interest.
Offcourse it depends on tax rules, which differ on places around the world.

 

[Bear]

Let’s pretend the NSX is being sold today, new for $80k.

I’m single, with no debt. My cost of living per month is $5k. So how much should I be making so that I can have an nsx and still sustain my vida loca :biggrin:

I saw this quote from Forbes.com and I was surprised by how well p-car owners do. “Take the Porsche 911. Its buyers are 86.8% male with the average age of 51 and median income of $390,000.”

Just to throw out a round number, based on your post, you should be earning over $100,000 per year to even consider buying that NSX. Even then, it may not be the smartest move.

 

[davidf]

As much as I'd like to move out to Cali., I can't I can't believe the cost of living out there. I'm down here in TX. and if one's earning 100 grand a year in my area, they are living pretty darn good. Guess I'm stuck down here.

 

[4AU4LIFE]

As much as I'd like to move out to Cali., I can't I can't believe the cost of living out there.

I was thinking the same thing !!!

 

[Malibu Rapper]

I was thinking the same thing !!!

I tell ya, life here can be difficult if you didn't buy a house here before 2000. I always look to see what $500,000-$1,000,000 can get you in some other states and it does make me jealous. But I think the high cost of living really only hits you when it comes to real estate. We might pay a little more for gasoline, we have low heating costs because winters don't get all that cold. It hardly ever rains in SoCal. Then summertime at the beaches here is something that makes it all worthwhile. One of my friends moved here recently from Washington where living expenses are a lot lower but he doesn't regret it one bit.

Getting back on topic, I only buy cars with cash because I don't like wasting money on interest. So when you have enough to pay for the car in full and can handle the insurance costs, then you should be fine. Some people are great at saving up even though they make hardly anything, while some make tons of money and can't save a dime. I read a story on CNN about some dude who made only like $11/hour, invested, and saved up millions and gave it to charity recently. That's your "millionaire next door" the kinda guy you have to admire. Buy stuff when it doesn't really hurt your pocketbook. It cracks me up when I see that show King of Cars and these people that walk into these dealerships and only care about how much they will be paying each month. They could be paying for 20 years, 20% interest, but as long as it's just under X amount each month, they don't care.

 

[jond]

Someone once told me your car should cost no more than 1/2 a years income and your house around 2x a years income. Obviously houses are a bit overpriced right now, but none the less.

To buy a $95,000 NSX I would think you should be making AT LEAST $200,000 per year.

Being this is usually a second or third car, I would think the $300,000/year range is probably closer to right.

 

[NSXGMS]

I'm not sure why everyone's getting hung up on this cost of living thing. It's totally irrelevant. The OP already stated how much his expenses are including cost-of-living. By using only that figure it can be determined how much he should make to be comfortable/responsible.

Statements like "one should be making $xxx/year to afford a new NSX" are totally illogical and working backwards. If one's living expenses are $10,000/month and they make $12K/month pre-tax I'd say they're heading for disaster even without an additional expense like a car. But if his expenses are $5,000/month then $12K/month income is more than adequate.

Yes, the cost of living is higher generally in CA but he could be living in a studio 50 miles inland and paying $500/month for rent. You're all assuming his cost of living is higher which it might not be. Even if he lived in Boise, Idaho you have no idea what he can afford until you know his total expenses.

Since he disclosed his total expenses it can be determined how much he would need to make to "afford" the car. All money lenders use a "debt-to-income" ratio to determine if one can afford to repay their loan. We know what his expenses are/will be and we know that 65% DTI is the high end of the cutoff. So we have 2/3 of the equation and can come up with the final 1/3 which is total income. If his income figure is less than that number he can't "afford" it based on accepted formulas.

 

[NSXGMS]

I read a story on CNN about some dude who made only like $11/hour, invested, and saved up millions and gave it to charity recently. That's your "millionaire next door" the kinda guy you have to admire.

One of my best friends is exactly like that. He never had a full-time job in his life and over 30 years was able to become a millionaire. He lived with his mother his whole life, saved every penny he had, lived like a poor guy, put all of his money into real estate, always paid cash, fixed the places up himself, etc. He drove a POS 1979 Dodge Ram Palomino truck for 25 years, never bought toys, went without, and saved.

He worked basically part time at a bowling alley for 30 years and had his own pro shop in his basement for additional income. Bought his first house in 1984 with 80% down, paid the mortgage off within a year, saved the rents, bought the house next door, etc. He had a million in equity and thousands coming in in rents by the late 90s. Once the rents started coming in it snowballed and allowed him to save faster and buy more houses more quickly. He now owns 7 houses free and clear.

It can be done if you're willing to go without and be extremely disciplined.

 

[LJSB]

I like that your question starts with "let's pretend".

I suspect that some folks like to "pretend" that their NSX identifies them as part of the demographic illustrated in that quote from Forbes.com,"median income of $390,000", when in fact they are a far sight from it.

 

[supra2nv]

this raises a question I have had for a while. I am out of touch with what the typical white/blue collar income is....is it i$50k, 100k, 200k? I understand there is differences depending on industries, but I always wonder what my neighbor makes, or the guy down the street with a hummer, 911, etc makes....know what i mean jelly bean?

 

[stacy'snsx]

Let’s pretend the NSX is being sold today, new for $80k.

I’m single, with no debt. My cost of living per month is $5k. So how much should I be making so that I can have an nsx and still sustain my vida loca :biggrin:

I saw this quote from Forbes.com and I was surprised by how well p-car owners do. “Take the Porsche 911. Its buyers are 86.8% male with the average age of 51 and median income of $390,000.”

Well I sure do not fit that Forbes info !!!
Average age 51-not close yet !
Male-last time I checked YUP,LOL !
Income $390,000-WOW how about a small fraction of that !
Damn,what am I doing wrong??
Oh yeah spending all my hard earned dough on cars,knew I should have invested in something.

As far as a blue collar worker's wage.It varies but our construction guys are anywhere from $65,000 - $125,000 and yes these are the workers.

Stacy

 

[NSXGMS]

this raises a question I have had for a while. I am out of touch with what the typical white/blue collar income is....is it i$50k, 100k, 200k? I understand there is differences depending on industries, but I always wonder what my neighbor makes, or the guy down the street with a hummer, 911, etc makes....know what i mean jelly bean?

HUD median income search

 

[supra2nv]

HUD median income search

huh? not even north of a hundo???

 

[Jetpilot3]

I have a thought on all of this...

In my personal opinion many people live beyond their means and that's why you sometimes see Hummers, Porsches, etc on driveways. Some people make a good living and others don't but I'd be willing to bet that more than not people are living on financing. I'd say most of my friends are living on debt and financing to keep up with the Joneses...

My personal goal was to buy my NSX cash (did that) but only after paying myself first for personal retirement savings, having a substantial amount of money in the bank for my mortgage downpayment, etc. Once you have taken care of the basics (housing, retirement plan, extra emergency cash - typically 6-9 months of salary) then start looking to save for your NSX.

Owning an NSX is great but its also more expensive than the typical car to maintain and especially once the "mod" bug hits you'll really appreciate a car that's paid off.

I understand that not everyone can pay off their NSX but try to get near to that point as it will make life really nice and you'll enjoy the car even more.

 

[MartinSD]

Greetings

I have only made 3 car payments in the last 11 years -- bought a car and paid cash for it each time. I have been religious about saving and investing money since the early 80's. The average per HUD in Santa Clara county is $94,500. This is just under $7900 a month. If your taxes are 28% federal and 8% state, this leaves something like $2,000 per month in taxes -- depends upon deductions. This gives you a total of about $5,900 per month and he has $5,000 in obligations. This means he has no money to do those special fun things everyone needs to do. I don't think that you make enough money if you are average here. Sorry, but reality is cruel. This does not mean that you cannot have an NSX -- it just means you probably shouldn't buy one now. Save and invest some money -- live frugally, and you will have one in no time -- it takes planning. Remember "A Goal without a Plan is just a Dream".
Cheers
Martin

 

[stacy'snsx]

I have a thought on all of this...
In my personal opinion many people live beyond their means and that's why you sometimes see Hummers, Porsches, etc on driveways. Some people make a good living and others don't but I'd be willing to bet that more than not people are living on financing. I'd say most of my friends are living on debt and financing to keep up with the Joneses...




That's how I do it,only there are no Jones' on either side of me,LOL !!
I do finance a lot of my bigger car purchases over the years.The way I look at it is like this:
Vacation to somewhere exotic for two-$2000-$5000/yr
Habits(other than cars)-$2000 +/yr
Misc(I don't need stuff)-$2500+/yr
Just in these three areas I could just about pay $500-$1000/mnth for a car.
The only good thing is I realize is that "I can't do it all and have everything" so I choose the car thing.

 

[01blacks4]

bah!!!! i dont even have a job and i have one...(its paid for so dont jump on my ass), plus a porsche a couple X5 4.6's and an audi s4. yeah they are paid for too. if you want it get it....

this country was founded on debt, if you need to take on debt, IMO thats fine, just make sure its worth it to you...if it is, and you have a plan for that debt...and what ever else life throws at you...you will be fine....

just remember, ANYONE can go broke...doesnt matter how much you have, or how much you owe, or what your plan is or was...it CAN happen...just be ready with the next plan if it does...


we should start a new thread.....

"who has the most debt" :biggrin:
and
"why is doesnt bother me"

 

[redshift]

bah!!!! i dont even have a job and i have one...(its paid for so dont jump on my ass), plus a porsche a couple X5 4.6's and an audi s4. yeah they are paid for too. if you want it get it....

this country was founded on debt, if you need to take on debt, IMO thats fine, just make sure its worth it to you...if it is, and you have a plan for that debt...and what ever else life throws at you...you will be fine....

just remember, ANYONE can go broke...doesnt matter how much you have, or how much you owe, or what your plan is or was...it CAN happen...just be ready with the next plan if it does...


we should start a new thread.....

"who has the most debt" :biggrin:
and
"why is doesnt bother me"

good stuff, I actually did a little piece on my site about why debt is so good. http://mrstockquickie.com/node/35

So damn true Marc! Anybody can go broke at any moment and job security is a myth. In truth, you've gotta blaze your own trail and accumulate as much wealth as you can until you're 100% financially independent (my f-u target is $20M). There is a dichotomy of thought between those who work a corporate job for a living and are planning for a comfortable retirement at age 60, and those who live a more volatile life based around the pricing of risk; these people don't ever want to retire, but they do desire great wealth and will achieve it decades before age 60.

In this thread the OP has gotten several prudent, and some naive, tips on money management. It is up to him to make a choice as to which is best suited for his personal profile. Generic debt-to-income percentages and so forth only tend to work well for the status quo. If you fit that mold, then I think there was some really good advice here.

I will offer my idea so you have one more to choose from... income is irrelevant, what matters is net worth. In the end, that is how you are going to pay the bills and its the only way to objectively judge who's "winning." If you can amass $20M in assets, a proper portfolio of munis and corp bonds yielding 5% would give you $1M/year in very low risk income for the rest of the existence of the free-market world. So if you're after net worth, you need to figure out how and when you're going to reach your specific goal. Once you have that, its just a simple matter of calculating if the car fits into your allowable lifestyle.

 

[gsr.sedan]

Those are some lofty numbers, but you’re idea of net worth is golden. I’ll do some accounting and see where my money is parked. Lousy cds and family loans is the extent of my investing. I can work like it’s nobody’s business, but money management is not my thing. As long as I maintain margin, then I’m making money and I’m a happy dope. Making money just for the sake of making money was fun 5-8 years ago, but now I suppose I’m burnt out and tired. I suppose I need to light a fire. I should raise the stakes in business or buy an nsx or both.