How to save for Model 3?

[Camera-Cruiser]

I'm no investment expert but just want to offer another point of view. This plan is sound only if Tesla stock goes up between now and when you need to pay the car. The whole plan will backfire if Tesla stock goes down because not only will be you underwater, you will no funds to pay for the car because the funds are now locked up in Tesla shares which you cannot sell (without realizing a loss).

100% this is not really about investment advice. Since anything can happen. But a diverse, but small portfolio might do better than a simple savings account. But a $100 a month in a savings account is better than letting 24 - 36 months go by with nothing saved towards the car and having to cancel a deposit.

In essence if you saved for 72 months you have $7,200 dollars, plus sell you existing car and you have a great down payment for your Model 3.

I guess my post is really about creating a plan to buy a car, than complaining about specs for a car that's specs haven't been finalized.

Heck, if you save $7,200 bucks and don't like the car, then you get your deposit back and have $8,200!, then do the happy dance.

 

[n00bie]

i did a rough calculation...@35K for a base model 3, I would need $7K for a 20% down payment. Then saving $10 a day for the next 2yrs, I should achieve that $7k goal Is it bad to eat ramen noodles everyday?

 

[weak_pig]

Sell my car in June 16. Save 1K per mth, save all my bonuses. Pray my queue number gets delayed til end 2019 so I have more time to save (it's counter-intuitive, i know...). Refrain from holidays, cut down from unnecessary spendings, hardcore savings from now til Model 3 launches!

 

[Johan]

How about working more?

 

[GKwey]

@Christopher Chan, eloder envisions Tesla stock shall raise to cover his stated goals in due time; unlike you not excited enough by model 3 to see what he sees.

 

[Christopher Chan]

@Christopher Chan, eloder envisions Tesla stock shall raise to cover his stated goals in due time; unlike you not excited enough by model 3 to see what he sees.

It's not so much my excitement or lack of it that determines the price of Tesla stock 2 years from now. I was pointing out that there is a critical assumption in the plans, that's all.

 

[Jason Bourne]

Since Tesla is an American car brand, let's do this the American way:

DEBT!

 

[Camera-Cruiser]

How about working more?

100% and smarter. Hey, invent the next PayPal, Apple, Tesla. With 100,000s of young & not so young reservation holders out there, I'm sure we'll see a few solid entrepreneurs in the mix.

I say bring it.

 

[Johan]

100% and smarter. Hey, invent the next PayPal, Apple, Tesla. With 100,000s of young & not so young reservation holders out there, I'm sure we'll see a few solid entrepreneurs in the mix.

I say bring it.

I agree. My overarching point was that people often think that the best way to improve their personal finances is to "save" money by not buying coffee, not eating out and what not. But the by far best way to improve ones finances is most often on the income side: work overtime, take on more responsibility and increase your salary, get a second job.

All this of course of course assuming one's priority is to accumulate money and/or things (like a car).

 

[Camera-Cruiser]

I agree. My overarching point was that people often think that the best way to improve their personal finances is to "save" money by not buying coffee, not eating out and what not. But the by far best way to improve ones finances is most often on the income side: work overtime, take on more responsibility and increase your salary, get a second job.

All this of course of course assuming one's priority is to accumulate money and/or things (like a car).

Both are true. Make more save more. Both great habits.

Truth is, most people really don't realize how much they spend on daily discretionary spending, and end up paycheck to pay check. I tell my kids to turn off lights in unused rooms all the time. They'll say it's just a nickel, and I'll say yes, times the 3 or 4 other rooms that your doing the same thing in, times the number of days in the year, times the number of years we've lived in the house.

I want those nickels!

 

[Camera-Cruiser]

Took my own advice this morning and went to the nursery and bought seeds at about 1/100th the cost of starter vegetable packs. It will add a couple of weeks to harvest time, but worth it.

 

[erthquake]

Every month, I'm saving the amount of my anticipated monthly loan and insurance payments. This gets me in the habit of budgeting my other expenses around my future car expenses. Assuming I'll take delivery in 24 months, I'll be able to put down enough money to be able to afford up to $50K out the door with insurance, and paying the same amount every month that I'm saving right now.

 

[meloccom]

So you don't have mortgage offset accounts in the USA?
That's how I saved for 8 years my Model S.
Rather than earning money and paying tax on it to pay mortgage interest you avoid some of the interest as the bank subtracts the balance of your offset account from your mortgage before calculating interest.
Worked well for me in Australia.

 

[AustinPowers]

So you don't have mortgage offset accounts in the USA?
That's how I saved for 8 years my Model S.
Rather than earning money and paying tax on it to pay mortgage interest you avoid some of the interest as the bank subtracts the balance of your offset account from your mortgage before calculating interest.
Worked well for me in Australia.

Very interesting scheme. Never heard of such a thing (or anything similar) over here. Care to elaborate how this works exactly? As I must confess I didn't quite understand everything. You earn money but don't have to pay tax on a certain part that you use for your mortgage?

Over here, basically, you earn your income. Income tax is deducted, leaving you your net income. From that you pay all your bills, mortgage rates, etc. Where does your offset account fit into this?

 

[Brennan]

I also was contemplating buying some Tesla stock as a method for trying to save/earn some money between now and the Model 3 launch. I'm curious, however, how past delays in production and delivery in other cars Tesla has introduced (i.e., Model X) have affected the stock price. The stock market can be very unforgiving for those sorts of things.

I didn't follow Tesla stock much when those events were occurring. If anyone has any insight into how volatile Tesla stock has been in the past when such events as I've described have occurred I'd be very interested. Not to be a pessimist, but I think that some delays in the Model 3 delivery are inevitable given the (possible) unforeseen demand for Model 3 by Tesla, as well as the fact that this is the first Tesla model for the masses. Fingers crossed there aren't any delays, but I'd rather be prepared

 

[meloccom]

Very interesting scheme. Never heard of such a thing (or anything similar) over here. Care to elaborate how this works exactly? As I must confess I didn't quite understand everything. You earn money but don't have to pay tax on a certain part that you use for your mortgage?

Over here, basically, you earn your income. Income tax is deducted, leaving you your net income. From that you pay all your bills, mortgage rates, etc. Where does your offset account fit into this?

It's a facility offered by banks in Australia. If your mortgage is say $100K but you have $10K in an offset savings account then the bank charges you interest on the difference of $90k. You don't earn any interest on the savings but when you consider you have to pay tax on the money you earn to pay interest on your mortgage the savings add up.

 

[ModelNforNerd]

I currently have no car note, so any money that would have gone to that is being split between a CD and Tesla stock. Between the 2, I've got the cash now to buy a base model outright. I'm just saving up for my options at this point. And that's not counting whatever I'll get for trading/selling the ICE when the time comes.

 

[kevincwelch]

Probably a few practical things to think about:
1. save on the coffee/Starbucks as the OP said
2. eat out far less
3. cooking meals for the week (e.g., pressure cooker)
4. turn down the heat a few degrees
5. turn up the a/c a few degrees
6. walk/bike when possible
7. lose the gym membership and run/bike at home
8. watch less TV
9. turn out the lights sooner and on later
10. yard sale
11. drink more water instead of soda, juice, etc.
12. ask your doctor for generic drugs
13. use debit card for payment or avoid credit card fees
14. refinance

did a lot of this while earlier in my career and while paying off student loans. I was really surprised how much saving on energy and food items really improved our cash flow.

 

[Camera-Cruiser]

All good stuff! I will be giving up my Keurig when I run out of pods. Back to Mr. Coffee.

 

[mistermonty705]

it may seem silly, but i am a creative person. i am going to sell small custom items on etsy and also at our local farmers market for extra cash.

prior to the release, i had paid 2 credit cards down. i am now putting the money that i would have paid on the cards into a savings account. also my tax refund check next year will go into said savings account. part of it went to the reservation this year.

oh. and i sell on ebay and work full time . im 22 btw. so i hope they offer a leasing option because after the model 3 i will probably want the S when im older. i currently lease a hyundai after financing one previously.