Am I getting ahead of myself? Pls read

[Diavel]

OP,

if I can make a few suggestions, speak to a financial advisor to verify your ultimate plans but definitely consider financing as we are temporarily enjoying extremely low rates and that $100,000 can be used to make more $ depending on risk tolerance, investment and the ability to remain liquid which is big. If the real estate market collapses then you can divest and purchase real estate.

There are multiple investment vehicles you can take but if you do choose the stock market, be aware that it often also drops when a new president is elected so don't be too bullish about the market right now as in my opinion, it may be close to overheating. Though I'm a supporter of Tesla, it is very risky not to diversify said investment especially if it's taking the place of a car purchase.

Personally i would look into real estate and plan on diving in the stock market after November but that's just me. Bough real estate pricing is high, long term investment and with rates so low, I think it's better than using it all on a depreciating asset.

My wife was in wealth management (she's in entertainment production right now by choice), if you have any questions pm me but there are a lot of brand new inventory vehicles you can get from Tesla on a discount as well which further saves $$$$ and definitely consider going the alliant 1.49% route and put a down payment that gives you a comfortable monthly car payment. Put aside some of that $$$ for emergency and invest away.

 

[deonb]

You know both of you don't really have a fundamental disagreement. Just a placement of disclaimer as you both agree @SageBrush & @deonb that investment carries risk.

Be aware that if one were to invest and lose part or the whole amount and be inherently stuck with the X payments so don't put everything I one place unless you have vetted that investment well. Otherwise you might as well go to Vegas and bet everything on black.

Re Johannesburg, is that 5% if you deposit in local currency? In Mongolia the return is 20% guaranteed but you have to put it in local currency and 6-7% if in US greenbacks so currency won't change.

I think we just disagree on whether it always needs to be said that investment carries risk, and leveraged investment even more.

Johannesburg I get 10% in local currency. It works out at around 4% or 5% effective over time due to the forex drift. I'm not aware of an instrument that allows you to directly invest in US$ over there.

Who do you get 6% US through in Mongolia?

 

[SageBrush]

You know both of you don't really have a fundamental disagreement. Just a placement of disclaimer as you both agree @SageBrush & @deonb that investment carries risk.

Investing my own money and investing money I borrowed are fundamentally different.

 

[deonb]

Investing my own money and investing money I borrowed are fundamentally different.

Only if you believe people should not invest anything until they have paid off all loans, including their mortgage. Otherwise you're effectively investing borrowed money.

 

[SageBrush]

Only if you believe people should not invest anything until they have paid off all loans, including mortgage. Otherwise you're effectively investing borrowed money.

True, but petty. Savings, for the plebians amongst us.

 

[deonb]

True, but petty. Savings, for the plebians amongst us.

That is a very fringe outlook. I don't know many people who don't have both a mortgage and a 401k or IRA. Most have a car loan as well.

In the no-borrow-for-investing world they would have to stop any more 401k/IRA contributions until they've paid off those two loans first. Regardless of the fact that the 401k nets them a 30% leverage immediately because of the tax benefit, plus whatever 50%+ employer matching... because... you know... borrowing money at 2% is bad.

 

[SageBrush]

That is a very fringe outlook. I don't know many people who don't have both a mortgage and a 401k or IRA. Most have a car loan as well.

I agree, and that is my point. Do not include your home and car debt in deciding that you have savings to invest.

The idea is that you can lose your investment and still have a place to live and a way to get to work. Investing borrowed money in excess of savings does not meet that low bar.

 

[Diavel]

I think we just disagree on whether it always needs to be said that investment carries risk, and leveraged investment even more.

Who do you get 6% US through in Mongolia?

In the case of a forum, it's ideal to put disclaimers out there so you are not ethically held liable for misinformation and wrong financial advice. Since this is a car forum, not everyone is investment savvy so it should be stated that there is risk involved, though it is obvious IMHO.

I have four accounts in the 4 major banks of Mongolia. They are "federally insured" up to a certain amount (hence I have 4 accounts) and half is deposited in dollars and the other half in local currency for hedging risk and the rate is at 6.6% and 20%. During Asia's (China's) economic boom, rates in Mongolia was at about 10-13% and the country experienced the fastest growing economy in the world percentage wise.

 

[Diavel]

Investing my own money and investing money I borrowed are fundamentally different.

OP is faced with the conundrum of borrowing money for the Model X vs investing his own money and not money he borrowed. In a literal sense he is being suggested to borrow $ for his vehicle. If he borrowed money to invest it then I suspect rates would be through the roof.

I agree, and that is my point. Do not include your home and car debt in deciding that you have savings to invest.

The idea is that you can lose your investment and still have a place to live and a way to get to work. Investing borrowed money in excess of savings does not meet that low bar.

That may ring true for 10-30k vehicles. 100k is a whole lot of $ to consider. For the sake of simplicity, If you lose the money you can sell the car and buy a cheaper car and proceed to pay off that debt. Absolute worst case scenario for a terrible foray in the investment world by a blind person.

Also, OP is not investing money in "excess" of savings. His comparison was at 25%.

Everyone has different investment principles and usually boils down to age, worth, income, financial education and risk tolerance. You seem to be risk averse which typically is the realm of higher aged/high net worth.

Younger people that haven't made a fortune usually takes on more risk as they have a much longer time to recoup whatever losses they receive.

 

[Diavel]

Do not include your home and car debt in deciding that you have savings to invest.

Invest is such a broad term and cannot be used in this sentence either. Don't mean to poke at you and enjoy this discussion (at the risk of digressing) but this doesn't ring true IMHO.

If you own a house with 80% equity and at our current low rates, i don't just keep paying it down, I'd refinance and pull out equity to an acceptable rate of payment and purchase another house (after proper assessment of taxation and potential rental income) elsewhere at the same low rate and lease it out. Have somebody else pay down the secondary house. In most of Asia, interest rates there are terrible. The US is credit driven so we take full advantage of it just like the IRS rule books with deductions as long as we know how to watch our butts. This is why my wife also has her real estate brokers license and I can fund mortgages as we get another 3.5-8%.

Apologies for going off-topic

 

[EinSV]

<snip>
My main objective behind why Model X (vs. a X5 or XC90 e.g.) is that:
* I need to replace two cars I have today (a BMW 5 series sedan and a minivan) into one single car that can be fun to drive, be a commuter, and a family hauler and is next generation/futuristic/uses alternative fuel etc. Wife has a separate electric car already for her commute. And we have solar.
* I am now in the market for a $50K-$60K car and Model X is double that. I know it is worth it. But, what % of your cash would you be willing to burn for a car like this? Is 25% worth it? Quite likely in about 8yrs, you would burn through all of it....so, would I? Should I? How did you convince your wife?

If $100K is a stretch you might want to consider the X60D. It starts at $74K. If you can take advantage of the federal tax credit you are immediately down to $64K (including $2500 CA credit), which seems to be in your budget ($50-60K) even before considering gas savings. And in Northern California (looks like you are in San Jose) those savings should be significant, especially considering gas prices here plus your solar system (and PG&E's EV-A plan).

You might also mention to your wife that depreciation on the Model S has been MUCH lower than other premium sedans. IMO, there is every reason to believe the same factors will be at play with Model X over comparably priced SUVs. Tesla Model S retains its value better than gas-powered cars in its segment, losing only 28% after 50k miles