re: Financial question

[Robert Moore <rlm@xxxxxxxxxxxx>]

Tamer,

You ask an interesting question, probably not considered frequently
enough.

I think your question, though, should have more to do with net worth as
opposed to net income. I don=92t like to spend a large fraction of my net
worth on a typically depreciating asset like a car. I buy meager cars by
most people=92s (Americans=92, at least) standards (though I consider the=
m
to be excellent cars and tremendous bargains). Well cared for, used
BMWs, for instance, are great cars to buy (BMW content).

You omitted a major cost...depreciation. This is probably the most
significant expense in the first few years of owning a new car. A
payment on a loan really isn=92t an expense...at least not all of it. The
interest portion is an expense, but the principal portion just gets
converted to equity in the car. A lease payment, on the other hand, from
what I can tell, is a pure expense (if the car is not purchased at the
end of the lease).

If your interested in long term =93sound financial planning=94, you are n=
ot
interested in either borrowing money to pay for a car or leasing a car.
It doesn=92t make good financial sense. Pay cash, then save for the next
one.

- --
Bob
'91 318is
'89 325i

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