My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 2020 with at least $3 million.

By Topics

0. About (10)
1. My Progress (139)
2. Car & Home (107)
3. Credit (138)
4. Banking (33)
5. Saving (49)
6. Investing (308)
7. Taxes (89)
8. Spending (74)
9. Misc (97)
A. Archive (49)


Feb 2014 (3)
Jan 2014 (6)
Jan 2012 (1)
Apr 2011 (1)
Mar 2011 (1)
Feb 2011 (1)
Jan 2011 (1)
Dec 2010 (1)
Oct 2010 (1)
Sep 2010 (1)
Aug 2010 (1)
Jul 2010 (1)
Jun 2010 (1)
May 2010 (1)
Apr 2010 (1)
Mar 2010 (6)
Feb 2010 (2)
Jan 2010 (7)
Dec 2009 (3)
Feb 2009 (4)
Jan 2009 (8)
Dec 2008 (1)
Jun 2008 (2)
May 2008 (2)
Apr 2008 (5)
Feb 2008 (3)
Jan 2008 (15)
Dec 2007 (32)
Nov 2007 (6)
Oct 2007 (8)
Sep 2007 (9)
Aug 2007 (24)
Jul 2007 (2)
Jun 2007 (1)
May 2007 (3)
Apr 2007 (4)
Mar 2007 (4)
Feb 2007 (13)
Jan 2007 (6)
Dec 2006 (3)
Nov 2006 (7)
Oct 2006 (7)
Sep 2006 (6)
Aug 2006 (4)
Jul 2006 (10)
Jun 2006 (1)
May 2006 (3)
Apr 2006 (2)
Mar 2006 (6)
Feb 2006 (6)
Jan 2006 (3)
Dec 2005 (1)
Nov 2005 (9)
Oct 2005 (8)
Sep 2005 (13)
Aug 2005 (25)
Jul 2005 (16)
Jun 2005 (17)
May 2005 (19)
Apr 2005 (20)
Mar 2005 (24)
Feb 2005 (23)
Jan 2005 (36)
Dec 2004 (40)
Nov 2004 (34)
Oct 2004 (17)
Sep 2004 (21)
Aug 2004 (59)
Jul 2004 (37)
Jun 2004 (31)
May 2004 (29)
Apr 2004 (52)
Mar 2004 (49)
Feb 2004 (49)
Jan 2004 (31)
Dec 2003 (48)
Nov 2003 (52)
Oct 2003 (29)
Sep 2003 (8)
Aug 2003 (5)
Jul 2003 (2)
Jun 2003 (2)
May 2003 (5)
Apr 2003 (2)
Mar 2003 (2)
Feb 2003 (3)
Jan 2003 (29)


The BMW Story, Part III: A Leap of Faith

Contributed by mm | April 2, 2005 6:45 AM PST

So what happened to our BMW aspiration? After the math and the ensuing bedtime discussion, we finally pulled the trigger. Financial wise, the transaction was completed almost identical to the previous analysis, although we did negotiated another $150 break. (The BMW deal was executed at the private party price and the Kia trade-in was executed at the trade-in price -- both based on Edmunds' report. I do consider it as a favorable deal.) Of course, we have been enjoying the "ultimate driving machine" in the last two days, hence the silence at PFBlog lately.

Nevertheless, I truly appreciate every single comment you left in the "analysis" post -- this makes the post the top commented one in PFBlog history. Many comments hit the crux of the problem. That is, by the end of the day, many personal finance decisions require a delicate balance of long term financial stability with near-term happiness.

Let me wrap up this discussion by summarizing our "BMW thought journey":

First, this is an expensive upgrade for sure. As I quantified in the previous post, the BMW purchase and Kia trade-in resulted in a $3,000 immediate blow to my net worth in my book. I'm also mindful of the much higher depreciation and maintenance cost, both are a given for BMW. I am looking at adding $325/month to my cost structure on a semi-permanent basis. For the year of 2005, the financial consequence is about $6,000.

Second, I made this move because I am positive that I can still meet my annual net worth growth goal of $80,000, thanks to brighter income prospects. The upcoming March monthly review report will show that I'm still on the right track.

Third, I did have some struggle. The idea of buying a luxury car does not fully resonate with my saver's mentality. Number-wise, it is hard to quantify the great amount of satisfaction we will derive from it and compare it against the hard dollars on the cost side. But again, if I follow this path and try to be "scientific," it is as hard to justify the BMW upgrade as to justify why I didn't consider to trade down my Toyota Camry for a cheaper car, say, Toyota Echo.

Fundamentally, I feel we made this leap of faith because our finances are reaching a new stage, in which our family income is growing healthily, and we have a high level of financial security compared to other people in late 20s. The desire to save the next dollar beyond our stated goal of $80,000/year, therefore, is gradually replaced by some desire to improve our living style an inch better. All in all, this is a leap of faith on our future financial prospect, and to some extent, a leap of faith on our gained skills of balancing long term security with short-term earthy entertainment.

More PFBlog Articles You Might Find Interesting ...

This Post Has Received 12 Comments. Share Your Opinions Too.

Jaloti Commented on April 2, 2005

Enjoy the car. Look, economics is all about choices--you save money on one choice, to spend it on another choice. Sure, the BMW will cost more money than a used Toyota--but if you enjoy it more, that's what it's all about. Otherwise, you wind up like that execrable "Tightwad Gazette" chick who makes it sound like it's a mortal sin to spend an extra 25 cents on the kids' cereal.

Congrats again, and thanks for your great blog.


MM Commented on April 2, 2005

Happiness comes from within ... . I've been through the phase of my life where I thought such things bring happiness. But initial euphoria goes away in a few weeks but the bills keep coming for years

Arbee Commented on April 2, 2005

I understand the conflicts you had regarding the BMW. Since you can afford the car and still hit your targets, I think it is a good move. I do wish I can save every penny I can. But we have to find a balance between our current wants and future needs. That balance is something that is very personal. Enjoy the ride!

Steve Mertz Commented on April 2, 2005

Funseeker! Enjoy the BMW'er-you've done a great job with your site and it's great to enloy your labor. Have fun, Steve

beemerssuck Commented on April 2, 2005

You will rue the day.

BMWs are some of the biggest pieces of shi* ever made.

You will have dreams of still owning that Kia in one year.


Tim Commented on April 3, 2005

Can we see a picture of this "ultimate driving machine"?


Mrs. Money Matters Commented on April 4, 2005

You will not regret the BMW. They handle so well on the road. Once we were almost in an accident in our 328. A ruptured tire flew in to the windshield, then under the car. We were not hurt because the car is heavy and steady. If we were in another car, I think we may have had problems. Enjoy!

ken Commented on April 4, 2005

Silly move to buy the BMW - but yes I've made my silly moves too :)

Suggest you don't let this be the first trip down the slippery slope to ego purchases - of such has many a retirement plan laid low.

J Commented on May 12, 2005

Boy, next thing you'll be trading up in houses. Big mistake mm. You could speed up your retirement a lot by avoiding financial black holes like "luxury" cars. BMW = Big Money Waster

I was looking at your expenses for 2004. $1200/month for FOOD?? If I was you I'd be tightening up the budget and retiring a lot sooner.

Good luck mm.

B C Commented on June 20, 2005

Good move on the BMW. I've driven and owned a couple for over 15 years. They will cost about 30% more in general maintenance, but the payoff is a very fine motorcar. Even when they get old, if you keep them up they still fit in anywhere from valet parking to the back of the Target parking lot. Love the naysayers! They WISH they could drive a Beam. 220,000 miles, no car payment since 1991 and LOVING IT!!!!

psikeyhackr Commented on June 26, 2005

Jose Anes Commented on July 6, 2005

Enjoy the car.
Everyone deserve some luxury. As long as you keep the luxuries under control, of course.

If you fund the retirement options completely, and save at least 10% of the salary, you deserve to reward yourself :)

Read More ... 102 Posts In The Same Category

This page was last rebuilt at January 27, 2014 07:41 AM PST.



Consumerism Commentary
Get Rich Slowly
My Money Blog
All Financial Matters
The Simple Dollar


Error 403 - Forbidden

Error 403 - Forbidden

You tried to access a document for which you don't have privileges.

Copyright 2003-2014, All Rights Reserved. (Privacy Policy)