Avg net income of M5 owner?

[greentrbo95gst]

Originally Posted by Fantasm

If you do research, you can find some, for example I have a preferred stock (not a true bond tho) with a very strong residential/commercial utility company paying me 8.75% dividend. I also have capital appreciation because the shares have increased in value from the initial par value at inception.

I've owned it for like ~5+ years and it has been absolutely stable and will continue to be. It, amongst a few others, are where I put any cash I don't need to touch or use for higher returns in my other investments (IT Services/Real Estate).
It matures in 2069 and unless they buy me out, I don't expect this utility company to be going anywhere.

Need more info on that one.

[M5TXGuy]

Originally Posted by Fantasm

It matures in 2069 and unless they buy me out, I don't expect this utility company to be going anywhere.

I'm sure you are aware of this, but most preferreds are callable at par after an initial period of time (usually 5-10 years). The company would elect to call an issue if they can eventually refinance at lower yield. If yours is callable, and you are sitting with a nice premium to par, you might look at selling the preferred about a year out from its call date, otherwise the preferred will begin moving back towards par. Again, I apologize if this is old news to you, but I thought I would mention it just in case it wasn't.

[Fantasm]

Originally Posted by M5TXGuy

I'm sure you are aware of this, but most preferreds are callable at par after an initial period of time (usually 5-10 years). The company would elect to call an issue if they can eventually refinance at lower yield. If yours is callable, and you are sitting with a nice premium to par, you might look at selling the preferred about a year out from its call date, otherwise the preferred will begin moving back towards par. Again, I apologize if this is old news to you, but I thought I would mention it just in case it wasn't.

Call date was 3/1/14 -- I'm in it for the dividends more than the cap. appreciation. That's a nice little side profit if I do get it, but I've never been in it for that.
If I really wanted to cash out fast, I should've sold it 1 year ago or so for +$5/share above par, then re-bought it after the call date at just +$2 above par - lol.

I just do easy and safe stuff on the stock market ... if I want a big return I'll go rehab & flip a house for $100k profit in 2 months.

[M5TXGuy]

Originally Posted by Fantasm

if I want a big return I'll go rehab & flip a house for $100k profit in 2 months.

I'll wire you funds if we can split $100k profit in 2 months!

[mdm0515]

Originally Posted by BavariaExclusive

Yeah this question can come off very tacky but the only reason I'm asking is to self motivate. I'm sure I can afford a M5 if I wanted. But I want to earn it, I want to deserve it. I just don't want to be over my 20% that is suppose to go in cars according to the Financial experts.

Current car: 2012 F10 Msport.

Comments will be really appreciated.

For the record, My income is zero.

[mdm0515]

Just my opinion but you come across as an entitled and out of touch superficial robot.

[MichaelJohn]

Originally Posted by mdm0515

For the record, My income is zero.

What kind of cryptic nonsense is that?

[BavariaExclusive]

My favorite M5 http://redf10.com/

[PhilT3]

Originally Posted by MichaelJohn

What kind of cryptic nonsense is that?

My guess is 'troll'.

[M6-Coupe]

Originally Posted by BavariaExclusive

My favorite M5 http://redf10.com/

why it says red???
BTW, it's a nice color

[BavariaExclusive]

Lol not sure because it is?

Originally Posted by M6-Coupe

why it says red???
BTW, it's a nice color

[znammzM6]

I drive a 14 M6, My income is roughly $36,XXX a year, I'm been in the Army for 11 years, I feel so poor compares to you guy.

[bodonx]

Originally Posted by znammzM5

I drive a 14 M6, My income is roughly $36,XXX a year, I'm been in the Army for 11 years, I feel so poor compares to you guy.

Would u share a secret to pay M6 with $36k income?

[Fantasm]

Originally Posted by bodonx

Would u share a secret to pay M6 with $36k income?

He said he "drives" one, not that he owns it or pays for it, lol.

[znammzM6]

okay, to be exact, I financed a 2014 M6 in June after trading in my 2013 M5 which I traded in the 2012 CTS-V, so yes, I "drives" but do not own it until I pay it off =P, and I don't think I can pay it off because that C7 Z06 is in my radar right now lol.

my secret, wait for it, wait for it,......I have no children lol, and 36K is what my W-2 says I make =)

Originally Posted by Fantasm

He said he "drives" one, not that he owns it or pays for it, lol.

[Ninong]

Originally Posted by BavariaExclusive

I just don't want to be over my 20% that is suppose to go in cars according to the Financial experts.

Let me try to explain the origin of the 20% figure.

When banks, or other financial institutions, look at a credit application for the "average" car buyer, one of the most important factors they must consider is the applicant's debt-to-income ratio. They can look at that two ways: gross monthly income or net monthly income. If the credit application gives monthly gross income, then the maximum monthly debt-to-income ratio allowed is usually 40%. If the income is shown as net monthly income, then the maximum allowable would be 50%.

Monthly debt is calculated by adding up all of the applicant's regularly scheduled monthly payments: rent/mortgage payment, credit card payments, car loan/lease payments, child support payments, etc. It does not include things like food or even monthly utility bills.

Since the applicant is applying for a car loan and not a house mortgage, the next maximum allowable they would look at would be 20% of monthly income devoted to car expense, usually taken to mean car payment plus car insurance. The 20% is not a guideline, it's a maximum. In other words, the bank would rather see that percentage much lower than 20% but they might accept 20% if everything else is in order and the applicant has perfect credit.

Obviously all of these numbers are hard to achieve for someone living in a very high rent district (San Francisco or Manhattan) where it may be necessary to spend 40%, or more, of monthly net income on rent/mortgage payment. It's difficult for the average middle-income person (meaning earning $45,000-$60,000/yr) to afford a new $115,000 car if they have to finance the whole thing and still stay within the bank's acceptable total debt-to-income guidelines.

Anyway, that's where the 20% figure comes from. The banks consider it insane for anyone to commit more than 20% of their monthly income to a new car.

The majority of BMW M5 buyers make well over $100,000/yr. Not all but most. If grandma just passed away and left you $300,000 and you want to spend some of it on a new M5, that's different. If you're 30 years old and single and a new M5 is very important to you, then that 20% number may be an acceptable maximum, provided your total monthly payments on everything, including the M5, are still less than 40% of your gross monthly income or 50% of your net monthly income.

Good luck!

[Blackraven]

Originally Posted by PatrickC23

I think it's also ridiculous to live at home with the parents and drive an M5, not sure we have any of those here, but there inevitably one out there.

Are you referring to single people (unmarried)?

If you are, then the context would now be cultural.

In most developed countries, a lot of people who have reached legal age would often live by themselves or start a life of full independence (i.e. living away from their parents, etc.)

In developing countries though (like some countries in Asia) where the 'family unit' is very strong, it's the opposite. In fact, where I'm from, as long as they're not married, then it's very rare to see individuals live away from their parents......

So yeah, it's mostly cultural.

[Stash21]

Originally Posted by znammzM5

okay, to be exact, I financed a 2014 M6 in June after trading in my 2013 M5 which I traded in the 2012 CTS-V, so yes, I "drives" but do not own it until I pay it off =P, and I don't think I can pay it off because that C7 Z06 is in my radar right now lol.

my secret, wait for it, wait for it,......I have no children lol, and 36K is what my W-2 says I make =)

So tax evasion?

[///SAL]

Originally Posted by znammzM5

I drive a 14 M6, My income is roughly $36,XXX a year, I'm been in the Army for 11 years, I feel so poor compares to you guy.

[HXS]

Originally Posted by Stash21

So tax evasion?

No. Slangin.

[Cali01]

Originally Posted by PatrickC23

Just me, being conservative, but I think it's crazy to spend 100% of your income on your car. Granted I did this when I was 24 and had an M3, but I could afford to lose my job and car at the time.

I think it's also ridiculous to live at home with the parents and drive an M5, not sure we have any of those here, but there inevitably one out there.

I agree other than cultural hindrances most Punjabi's like me have to live with their parents because its our culture to take of our parent once we get married to "repay" what our parents did for us. Well its not a "have to" but I feel a moral obligation to and its highly frowned upon in the Punjabi community if the son does not take care of his parent after his marriage.

But on to the question. The 20% rule is good rule of thumb if you wish to buy a car cash, which my dad used and I was taught to use and thats how I bought my LX570, it happened to actually be 13% of my income. However I found that if you wish to buy a car cash which is valued at more than 20% of your income or savings you are tying up a lot of capital which can be invested and make more money of course if you invest in the right spot(s). Now if you wish to finance a car you can slip to about 25%-33% value of your income or savings so as long you get a decent interest rate and give roughly 50% down. That way you aren't sticking all of that capital into an asset that one day will be worth much less than what you bought it for, for a long long time. When it comes to getting a loan it shouldn't be longer than 36 months at most 2.9% and the payment shouldn't utilize more than 10%-15% of you monthly income, IMO if you can't fit in that bill you shouldn't be in what ever car you drive regardless of value. If you think practically, how smart is to unitize lets say 30 or 40 percent of your income to give a payment on a depreciating asset if you have a mortgage, kids, a wife that chose to stay home or work part time because the kid need attention, and other associated overhead. Or how smart is it to buy a expensive car if you have a family and still live in the apartments, a house should be your priority. Know obvi there are exceptions like careers that cause you to move often, etc. but if you are like the rest of the Joe's you should buy a house before you even think about a luxury car... Just my humble opinion...

[Fantasm]

You could also say that sinking $200K-$400K into a house's downpayment isn't as smart as leveraging that same $200-$400K into investment homes and have the profits pay for all of your rent some place nice (plus still own the rental houses and receive capital appreciation).