What does everyone do to afford these M5's?

[PhilT3]

Originally Posted by SloPoke

I'm going to break away from the pack. I for one do not feel that you need to be making $500-$600k a year to buy an M5. While it may be wise advice to not spend more than 18-20% of your annual salary on the purchase price of a car, it is by no means necessary. I would wager that the majority of M5 owners earn $150-$200k per year. It's all about what you are willing to compromise on. There are so many factors to consider, it is asinine to try to assign a salary to a car. For instance, I make $120k a year. I am about to pay cash for a $550k house. I'm about to pay cash for my wife a new Cayenne, and I'm about to pay cash for an M5 or M6 GC. At this point, I will be 100% debt free and can invest about 75% of my income. My wife is about to graduate with her masters in speech language pathology and be making $100k a year. 100% of which can be invested since we are living off 25% of my income. Even before all this, I was driving a 1M making $100k per year. You live once and it's not about who dies with the largest bank account. It's a balance between that and having a good time.

+1.

[Loft23]

It's all about disposable income. You can make 120k but if you had a million dollar trust fund and no debt, you're probably doing ok.

[amit1947]

I made about 150k last year and got an M5 a few months ago. To be honest, I think the car is a bit much (575hp! come on now), and I feel like a millionaire driving it (kind of an uncomfortable feeling). The car is leased for my business and I'm planning on deducting 50% for 2014.

The car is amazing, but I do feel that I could have gotten something cheaper. The weird thing is that I feel like 120-150k income is not that great. My goal is to get to 250k, but the taxes will kill me.

[GB///M]

Originally Posted by SloPoke

I'm going to break away from the pack. I for one do not feel that you need to be making $500-$600k a year to buy an M5. While it may be wise advice to not spend more than 18-20% of your annual salary on the purchase price of a car, it is by no means necessary. I would wager that the majority of M5 owners earn $150-$200k per year. It's all about what you are willing to compromise on. There are so many factors to consider, it is asinine to try to assign a salary to a car. For instance, I make $120k a year. I am about to pay cash for a $550k house. I'm about to pay cash for my wife a new Cayenne, and I'm about to pay cash for an M5 or M6 GC. At this point, I will be 100% debt free and can invest about 75% of my income. My wife is about to graduate with her masters in speech language pathology and be making $100k a year. 100% of which can be invested since we are living off 25% of my income. Even before all this, I was driving a 1M making $100k per year. You live once and it's not about who dies with the largest bank account. It's a balance between that and having a good time.

Well said.

[Schnell_1]

Originally Posted by amit1947

I made about 150k last year and got an M5 a few months ago. To be honest, I think the car is a bit much (575hp! come on now), and I feel like a millionaire driving it (kind of an uncomfortable feeling). The car is leased for my business and I'm planning on deducting 50% for 2014.

The car is amazing, but I do feel that I could have gotten something cheaper. The weird thing is that I feel like 120-150k income is not that great. My goal is to get to 250k, but the taxes will kill me.

In SoCal; 150k is like minimum wage lol

[Loft23]

Originally Posted by Schnell_1

In SoCal; 150k is like minimum wage lol

SoCal is smoke and mirrors for the most part. 150k is a good salary anywhere as it is almost 4x the household average. SoCal is not that expensive compared to the Bay Area on average. I'm not talking about their exclusive zip codes because that skews the average. There are always those above the norm. It just seems like everyone is a millionaire because everyone drives a Lexus, bimmer, merc, or some other luxury brand just to fit in.

[Schnell_1]

Originally Posted by Loft23

SoCal is smoke and mirrors for the most part. 150k is a good salary anywhere as it is almost 4x the household average. SoCal is not that expensive compared to the Bay Area on average. I'm not talking about their exclusive zip codes because that skews the average. There are always those above the norm. It just seems like everyone is a millionaire because everyone drives a Lexus, bimmer, merc, or some other luxury brand just to fit in.

Yes, 150k is decent compensation anywhere - I was being a tad facetious (hence the lol) since I live here and so does he. The median salary in California is 44k FYI.

5/10 of the most expensive cities in America are in Cali, so undeniably 150k is not as valuable here as it is in other cities across this fine country. And yes, recently the cost-of-living in NorCal has become as expensive as SoCal, but coastal SoCal real estate is in a league of its own in Cali.

By the way, my statements on SoCal being expensive weren't based on anecdotal notions like people trying to fit-in or the observance of luxury cars, but based on measurable data such as tax rates, CPI, real estate prices, entertainment costs, etc.

2013 Most Expensive Cities

1. New York
2. Honolulu
3. San Francisco
4. San Jose, Calif.
5. Stamford, Conn.
6. Washington, D.C.
7. Boston
8. Oakland, Calif.
9. San Diego
10. Los Angeles


http://www.kiplinger.com/slideshow/r...es-to-live-in/

[SloPoke]

Originally Posted by Loft23

It's all about disposable income. You can make 120k but if you had a million dollar trust fund and no debt, you're probably doing ok.

Really hope that trust fund comment was not aimed at me.

[chong0]

as a side note

at our income level each kid through college will be about 250k each

I picture each of my kids as my Ferraris that I will probably never attain. (probably break even on the upkeep!)

[ezmaass]

Income isn't the right measure - or at least a complete one. As mentioned, disposable income + assets is more like it. Where I live in Fairfield County, CT (NYC metro area suburbs essentially), it's common for people to make $200k, $300k, $400k, and $500k - and then much, much more when you get to guys like all of the hedge fund managers, bank executives, etc. But your typical 4-person family with an income of $300k in the area? Chances are they also have a $1.5M mortgage. They shouldn't be buying M5's any more than the guy who's single, living in an apartment, and making $90k if you ask me.

But how people spend their money is a personal choice. From my perspective, it's wise to make sure you're thinking about your long-term goals - like retirement, education, etc - as a priority, though. If you're jeopardizing your future and making yourself a burden on your family or society (to pay your way when you're old and unable to earn a living) because you blew your earnings on an M5? That's not cool.

But it's also important to give younger guys some slack, too. I'm only 35 (I still feel young!), but I remember my 20's pretty clearly as they weren't long ago. I've always spent more on cars than I had to - and in my 20's, maybe more than I SHOULD have. It's not the end of the world as long as you're still looking out for your future. I have a 7-figure bank account, a very large six-figure income, plenty of retirement money, etc at this age now - but back when I was 24 or 25 and making around this guy's income, I absolutely blew $40k - $50k on a car. Granted, my credit was also solid and I WAS saving/investing, as well - my only issues with what I've heard from the OP.

You can't recapture your youth. So, I wouldn't advocate blowing your money and missing out on saving for the future - but I'd also say you need to live a little. Balancing the two is the key. To the OP, I'd suggest visiting a financial planner if you're not into investing yourself - just follow their advice and set your investments on autopilot if you must. But DO invest.

[M5Rlz]

Originally Posted by MichaelJohn

I sincerely hope you change your mind about that (long rant coming). If you are young, you would be amazed at the long-term potential of investing in American and international companies, that is to say, equities. I have made almost as much money in the stock market as I have by working, and I make a very good living. If you can withstand the bumps and bruises of short-term swings and keep your eye on the long-term goal you will be richly rewarded. Unless some disastrous calamity befalls the human race, the long-term bias of equity markets is UP. I think the problem is that most people want too much too soon. Put some money away when you can, pick a good index fund or even good individual companies if you can stomach that and just hold on. Buy more when the market dips (this is very hard to do). I have followed this philosophy for my entire adult life, and I did not start out earning a lot of money. I have put one child through college with another to go and their considerable college funds (fully invested in index funds) are untouched. Those will become down payments on their first homes. I have a very nice home and I can afford any car that I want. I go to work every day now because I want to, not because I have to - that is a VERY good feeling (I own a small company and I love my employees and my clients - working is fun for me). If I had maxed out on my spending and bought everything that I could afford and not invested over the years there is no way I would be in the position I am now. I think investing is essential in life. It takes discipline, research, patience and a strong stomach. Yes, it takes time, I have been investing for over 30 years, but we do all eventually get old so why not take advantage of the time to build for a comfortable old age? Money may not make you happy, but it sure makes things a whole lot easier. As far as get-rich-quick schemes with web apps, no disrespect intended but good luck with that. Who knows, you may be one of the lucky few - but what if you're not? Put some money away and let it grow, you'll be glad you did. Sorry to get so preachy here but when I read your cavalier statement that you weren't into investing I had to respond. I am sure that I am older than you and I have seen the power of long-term investing. Believe me, it works.

Agree.. All the money i've wasted if i'd just kept driving my hand me down turbo s cayenne, probably at least 5 million lost by the age of sixty for temporary pleasure.

Too often people don't look at the rewards towards the end, granted if you die in a snowstorm at age 45 you've spent all the time grinding for nothing since you'll never see the fruits of that dedication. Balance is hard for lots of people and its easy to get out of sorts, on either end of the spectrum.

The other thing is the little debits eat away at real growth... I tried to explain this to a friend whose grinding making 25k a year who wants it all. I said if you just cut your gym membership and eating out 4+ times a week down to once a week you will have erased your debt by 50% in a year, and if in one year you contributed the max to an IRA and just let it sit and never touched it you've made six figures by the time you retire. Simply by removing a few meals a week and gym membership lol

[eleven11]

Originally Posted by TasteOfPower

... I have super bad credit...

Originally Posted by TasteOfPower

As far as all that investing...I aint really into all that. I plan to get rich from some sort of web app or mobile app.

Sounds like solid plan. M5 is definitely the right move.

[NlckyBlack]

Id go for an M4 if i was you, and my M5 is paid off of numerous rental properties that i own. My salary goes towards mortgage, kids expenses etc...

[Stash21]

I think buying a m5 in your situation would be a dumb move. But sometimes dumb moves are good learning opportunities.

[05 G coupe]

You guys give some truly awesome advice. I give you guys respect and appreciation because advice is free and some of you could've easily not taken the time to answer the OP's question like on most forums these days. Everyone is afraid to talk about how much they make or what they've done to get to where they are on a lot of forums out there. But you guys took the time to share what's smart and what's worked for you on an individual basis.

This advice you guys are giving can change a persons life! I for one will heed a lot of the advice that i've come across in this thread. It's nice to hear what you should be doing when you're young (I'm 28) from people that have been through it and from people who are older and have been where you are. Numbers don't lie and if you follow a smart game plan financially, everything will work itself out and you'll be able to afford whatever you want.

I hope to get an M5 one day or M6 but there's a lot more things that take priority first. But I know with making the right moves and doing some of the things you guys mentioned in this thread, not only will I get there but I will be able to enjoy it to the fullest because I set myself up properly. This is more of a thank you to everyone who replied as i don't really have any advice to the OP except to listen to what everyone said in this thread lol.

[MichaelJohn]

Originally Posted by 335iRlz

The other thing is the little debits eat away at real growth... I tried to explain this to a friend whose grinding making 25k a year who wants it all. I said if you just cut your gym membership and eating out 4+ times a week down to once a week you will have erased your debt by 50% in a year, and if in one year you contributed the max to an IRA and just let it sit and never touched it you've made six figures by the time you retire. Simply by removing a few meals a week and gym membership lol

And a lot of little debts can turn into big debts. I have a younger friend who makes a good salary, lives at home rent-free and is in the process of declaring bankruptcy because he cannot get out from under his credit card debt. In the middle of that he paid $1000 for a dog that he takes regularly to a dog groomer. Choices and priorities…

[M5Rlz]

Originally Posted by 05 G coupe

I hope to get an M5 one day or M6 but there's a lot more things that take priority first. But I know with making the right moves and doing some of the things you guys mentioned in this thread, not only will I get there but I will be able to enjoy it to the fullest because I set myself up properly. This is more of a thank you to everyone who replied as i don't really have any advice to the OP except to listen to what everyone said in this thread lol.

I try to go into any vehicle, or large frivolous purchase with the idea that if the worst happened like 2008 I could pay all my debts off and be AT WORST back to zero or ahead. I don't think you or anyone else needs to say I'll get [insert vice] when I'm 40-50, because nobody knows whats coming down the pike. Wouldn't it suck to be diagnosed with cancer or hit by a bus and could have enjoyed life but didn't planning TOO far ahead?

Again I'm not saying run up bills or even mortgage the future, but this guy for instance is single, living in NC [nowhere near somewhere like NYC/DC/SOcal] and while we don't know his financial stability, nor do we know his job security. He appears to be at least in my opinion fine to not only enjoy an M5, but get out of it should that need arise.

Cars, Vacations, Clothes, entrainment equipment, even smoking. Are all in the same category in my personal book... Enjoyment due to some form of addiction lol. They should be treated as such, because nobody on here could argue that a safe toyota/ intro 5er or 3er is worse at getting to work or getting kids around than an m5 or other 100k+ vehicle. Just like I couldn't argue my designer watch tells time better than a timex, or designer suit works any better than a mens warehouse one.

My advice enjoy what you like and if you can comfortably make it work, do it. I for instance haven't been on a vacation since 2010 and have no desire to go anywhere lmao, I don't smoke, or drink, or need to eat at the fanciest spots in town and run up bar bills, or go to concerts or things like that.. So most of my fun is spent on gas, mods or cars lol

[Boss330]

I guess it all depends on how bad you want the M5...

Where I live, the median monthly net income is $ 4900,- (US is $ 3600,-) but cars are supe expensive here. For instance a 528i STARTS at $ 100.000,-
Basically everyone that wants a new car here has to spend 50-100% of their annual income if they are going to buy a new car... That's how it is, and we just accept that we have to spend that much money on a new car. Compared to how we have it, buying a used M5 for under 100k would be a no brainer if you make 120k

But not all aspects of that equation is transferrable to the US I suspect. For instance, our financial institutions allways deal with financing cars that cost 50-100% of annual income. Perhaps that would be harder in the US? Over here it's the norm, but in the US you might be one of few that use that much of your income?

But, IMHO there is often a enhanced satisfaction from working hard to be able to buy your dream car. If you have a serious passion for the car, then you will also want to go that extra mile to buy the car. If you are a enthusiast then that dream car will bring joy and satisfaction into your life. You will possibly also enjoy it for longer, since this is THE car that you made that extra effort to buy! If you have a lot of money and can simply just buy a new toy whenever you want, you might also loose interest sooner (not true for everyone, but in general).

Listen to the advice you get, but in the end it's your life and your money. Don't buy it if it will get you into financial trouble or make monthly payments a pain. But, as has been said, we only live once. If you can afford it and want a M5, get one. Who knows what tomorrow brings... I had a serious disease a few years ago, that made me think about all the things that I wished I had done while I was healthy (at the time it was a situation that could have killed me or made me a vegetable). Since that period, I have decided to do more of the things I want to do but which I previously didn't prioritice. I feared that I couldn't drive or be able to go on vacation etc. That made med mad to think about all the driving experiences that I had allways dreamed about and told myself that I would do someday, and which I suddenly feared would never happen. Life goes by so fast, live it every day!

[Loft23]

Originally Posted by SloPoke

Really hope that trust fund comment was not aimed at me.

No it wasn't. I was generalizing and it could investments or anything liquid on top of salary.

[Hoopumpers]

Don't shake your head. Buy the e60 and laugh all the way to the bank. Where else can you get a bespoke V10 for that cash? I miss that car

[M5Rlz]

Originally Posted by Hoopumpers

Don't shake your head. Buy the e60 and laugh all the way to the bank. Where else can you get a bespoke V10 for that cash? I miss that car

Thats true. 2013s are already in the 60s and can even find a few in the 50s lol a well taken care of, out of warranty, v10 is still 35-45k which is nuts.

[M6-Coupe]

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