Is it a sin to even mention the word BMW in a personal finance blog? After all, car is depreciating asset and the common wisdom is to buy the cheapest car to preserve more cash for retirement.
Don't get me wrong: I'm a firm believer of this principle and my current inventory of a 5-year old Toyota Camry and a 3-year old Kia Optima is the best testimony to this belief.
On the other hand, our family financial picture changed pretty dramatically recently. Since my wife started her new career last summer, more bucks are flowing to our bottom line every month. If you take a look at our track record, you may notice our saving speed is much faster lately. As a matter of fact, our net worth grew $65,437 in the last 12 months; this compares to $42,707 for the 12 months immediately preceding June 2004, the month my wife started her new job. (Well, I should admit the different kinds of advertisement you see at PFBlog also helped a bit. :-))
Over the course of the last several months, we gradually, and consciously, "outsourced" some of the "dirty works" in the household. First, we send my shirts and trousers to the neighborhood drycleaners -- they provided a good service for around $45/month, and this saves my wife at least 5 hours a month. Second, we recruited TruGreen to take care of our lawn maintenance at around $350/year. After a couple of months, our lawn is greener and we are happier too.
Now you probably follow my logic: growingly, I feel it does not hurt much if we divert part of our increased earning power to some earthy happiness, especially, when such happiness (and freedom) creates more opportunity for us to earn more. You can probably also understand why my wife suggested to me that we consider a better set of wheels in the family, I didn't say no.
Back to the business, we are not talking about a brand new BMW; we are trained enough to understand it is not worthwhile to pay the rapid depreciation in the first few years for the "new car smell." My wife and I agree that we should look for a 3-5 year old BMW 5-series to replace our Kia Optima. Still, we will crunch the numbers first before we finalize our decision, and I am still committed to delivering our annual saving goals despite this big purchase. My general estimate is it will cost about $10k in the first two years, and you read my financial analysis soon on the details.