Sold my MDX SUV, getting Model S ... for free?

[macman]

First, please excuse my English. I'm not the native English speaker. Two months back, I started to learn about Tesla. I'm fascianted about Elon Musk's story and Model S. That got me thinking. Since I belive in Elon and love the Model S, why not make some money while having fun driving. So I sold MDX and net $25,000. I'm investing all of them plus $10,000 tax credit into TSLA. I'll do 100% financing with Model S. The total price of the car including tax is $95,000. Minus $10,000 tax credit and $30,000 fuel saving over 10 years. So, the effictive price of the car is $55,000. I'm investing $35,000 in TSLA for long term. How long do you think this investment will have $55,000 return? So I'm getting a free Model S. My guess is in 5 years, just when I pay off the loan.:biggrin: What do you think? Good idea or dumb idea?

 

[fiksegts]

might have worked if you did this a few months ago...

 

[AC1K]

might have worked if you did this a few months ago...

yeah in feb/march TSLA was at $20-$30, it almost hit $160 last week.

 

[Norse]

I bet he dont have a time machine, and I am pretty sure he knows what that has happened With the Stock the last months.

I do think you have to wait for GENIII to get you Money back. That will be in 3-4 years.

 

[blakegallagher]

nah ... when they announce they are putting in another line to produce models s/model x you will be able to pay off your car. So 2015

 

[sullitf]

I would caution against investing all of it in TSLA unless you would also be ok with a $130k Model S. Worst case scenario TSLA goes under due to an unexpected safety recall and you are left with a low production, completely unique vehicle with a safety issue plus worthless stock.

With that said, if you are buying stock you would need a price around $390 to have $55k profit off of $35k. You are accounting for 10 years of gas savings, if you also allow 10 years for the stock I think that is totally reasonable if Tesla does as well as we expect. Of course you also have inflation to account for but I am ignoring to avoid the math on a Saturday night

 

[pfbz]

My formula for a 'free' Tesla is a little different.

I bought TSLA cheap the same day I put a deposit down on a Model X, Q2 2012. $5K deposit, $15K TSLA. Now I'm contemplating selling 1/4 the holdings, which along with the X deposit refund will just about cover 3-year total cost of ownership for a 'budget' Model S after factoring in tax credits, guaranteed buyback/residual, fuel savings.

$75,000 - modestly equipped S60
-14,000 - tax credits
- 6,000 - fuel savings over three years
-38,000 - guaranteed residual
---------
17,000 three year cost of ownership
-12,000 ~1/4 Tesla holdings
-5,000 Original X deposit refund
---------
= Free Tesla, and I still get to keep the majority of my position in TSLA!

Yes, I realize there is a teeny bit of oversimplification above!

 

[macman]

Thank you for the advice. I'm ok to loss all this investment. I think the odds of Tesla going strong vs going under is 1000 to 1. The odds of TSLA doubling the current $150 in 5 years vs not is 10 to 1. I like my investment odds. Just for everyone's reference. My average price of investment is $150.

I would caution against investing all of it in TSLA unless you would also be ok with a $130k Model S. Worst case scenario TSLA goes under due to an unexpected safety recall and you are left with a low production, completely unique vehicle with a safety issue plus worthless stock.

With that said, if you are buying stock you would need a price around $390 to have $55k profit off of $35k. You are accounting for 10 years of gas savings, if you also allow 10 years for the stock I think that is totally reasonable if Tesla does as well as we expect. Of course you also have inflation to account for but I am ignoring to avoid the math on a Saturday night

 

[sleepyhead]

Thank you for the advice. I'm ok to loss all this investment. I think the odds of Tesla going strong vs going under is 1000 to 1. The odds of TSLA doubling the current $150 in 5 years vs not is 10 to 1. I like my investment odds. Just for everyone's reference. My average price of investment is $150.

Good job macman; I agree with your odds and your strategy. If there is a 10% chance you lose your money and 90% chance you double it then you have to take those odds every time. There is no reason to be risk averse, especially if losing all of your money is an option you are prepared for and could live with.

I have a whole lot of my wealth in TSLA too and I am not planning on losing it either. Worst thing you can do is know that you will be right and not invest only to find out that you were right all along.

 

[borat99]

Man, a lot of you guys get very generous tax credits. I'm jealous.

 

[Acmykguy]

I would caution against investing all of it in TSLA unless you would also be ok with a $130k Model S. Worst case scenario TSLA goes under due to an unexpected safety recall and you are left with a low production, completely unique vehicle with a safety issue plus worthless stock.

With that said, if you are buying stock you would need a price around $390 to have $55k profit off of $35k. You are accounting for 10 years of gas savings, if you also allow 10 years for the stock I think that is totally reasonable if Tesla does as well as we expect. Of course you also have inflation to account for but I am ignoring to avoid the math on a Saturday night

I think a safety recall that would do that much damage to a stock when they have a 5 star safety rated car is highly unlikely.

- - - Updated - - -

Good job macman; I agree with your odds and your strategy. If there is a 10% chance you lose your money and 90% chance you double it then you have to take those odds every time. There is no reason to be risk averse, especially if losing all of your money is an option you are prepared for and could live with.

I have a whole lot of my wealth in TSLA too and I am not planning on losing it either. Worst thing you can do is know that you will be right and not invest only to find out that you were right all along.

I agree sleepyhead!