Soon to graduate from University... thinking about getting a Model S...

[kinddog]

Its not unheard of for students at my university with a BS in CS to get 120K+bonuses/yr right out of college....

unheard of? no. common? hardly.

of course if you graduate summa cum laude, you will have more opportunity. but most summa cum laude graduates are smart enough not to go into $90k worth of debt at age 22 right out of college, effectively crippling their financial future right at the outset...

 

[blc1017]

it's amazing, the hubris that today's young-ins coming out of college have. even in the midst of an epic recession, where unemployment among college grads is about 40%, this guy thinks that a simple B.S. will have him making $80k right away. NO DOUBT!!!

i remember when only very successful professionals, maybe in their 50's, after putting their kids through college would go out and splurge on a $90k car. now every college graduate thinks they are entitled to one before they even have a job.

i fear for the future of this country...

I am more hopeful than you, based on the very austere habits of my own adult children as well as their friends. Both have learned and are living the concept of delayed gratification, are keeping their credit scores high and their spending low. Happy and living within their means. I want to believe they are not the exception.

 

[yobigd20]

Buy some decent furniture (not cheap crap). Buy yourself a few toys. I bought a camera ($1.5k), a bicycle ($5k), and some really nice pots and pans ($1k).

$5k for a bicycle?? WOW. Does it pedal itself and give you a back massage while you're on it?

 

[K Hall]

Some college grads can buy a MS with cash if they want. They may choose to finance due to the insanely low interst rates. It is a personal choice and if you can afford it I say go for it.

 

[abasile]

Don't listen to Dave Ramsey. If you smart enough to get an 80k/yr job right out of school you are smart enough to find better financial advice.

Certainly, many will not agree with his advice. I can't say that I necessarily agree with it 100% of the time; for instance, Dave Ramsey takes the position that business debt is a bad thing. Obviously Tesla Motors would not be building the 'S' today if not for having the ability to utilize debt.

My biggest takeaway from Dave Ramsey is his push for debt free living except for a home mortgage if needed. Not having debt obligations to service has been psychologically quite freeing to my wife and me, and has been well worth the spending discipline that it took to get there. Yes, debt can be used to increase income, but with increased risk. While it is acceptable (though not ideal) for Tesla Motors to operate with this kind of risk, we can do without it in our personal lives.

 

[ElSupreme]

$5k for a bicycle?? WOW. Does it pedal itself and give you a back massage while you're on it?

No but it did only weigh 15 pounds. I got a semi-custom Cannondale frame, and built it up from scratch. It was about the ultimate criterium racing bicycle you could get. Probably still is. I don't think you can still get it.

Racing bicycles are expensive. My previous racing bicycle had a cracked frame and about 20-25 THOUSAND miles on it.

 

[yobigd20]

No but it did only weigh 15 pounds. I got a semi-custom Cannondale frame, and built it up from scratch. It was about the ultimate criterium racing bicycle you could get. Probably still is. I don't think you can still get it.

Racing bicycles are expensive. My previous racing bicycle had a cracked frame and about 20-25 THOUSAND miles on it.

well then, I stand corrected. I guess a bicycle can actually cost $5k. http://www.amazon.com/Yeti-Cycles-S...e=UTF8&qid=1362016686&sr=1-1&keywords=bicycle

 

[ToddRLockwood]

My 2-cents: wait for Tesla's Gen III car (to be released in 2015) and pay cash for it. Avoiding debt is a valuable life strategy. It places you higher on the financial pyramid and allows you to put your money to work for you, not for your bank. IMO, the only personal debt worth having is a mortgage, and then only if the rates are very low. Never borrow to purchase a depreciating asset like a car.

 

[kinddog]

I think we scared Ridge Lawrence away for good... hahahahaha

 

[ElSupreme]

well then, I stand corrected. I guess a bicycle can actually cost $5k. http://www.amazon.com/Yeti-Cycles-S...e=UTF8&qid=1362016686&sr=1-1&keywords=bicycle

Yeah that bike wasn't even close to top of the line.


Road Bikes:
$13k
SUPERSIX EVO BLACK INC. - SUPERSIX EVO - Elite Road - Road - Bikes - 2013

$12k
Madone 7.9 - Trek Bicycle

MTN Bikes:
$11k
SCALPEL 29ER CARBON ULTIMATE - Scalpel 29er - Full Suspension 29er - Mountain - Bikes - 2013

$9k
Superfly 100 Pro SL - Trek Bicycle

 

[Clprenz]

Before buying anything, I would read the book The Wealthy Barber. I am reading it now and it will help you become a millionare. I would not buy a Model S straight out of college, unless you have at least 35k sitting aside. You really would enjoy the car, but after a while you will be bogged down with debt. Its your choice but I would read this book now. This book will really help you.

 

[Al Sherman]

My 2-cents: wait for Tesla's Gen III car (to be released in 2015) and pay cash for it. Avoiding debt is a valuable life strategy. It places you higher on the financial pyramid and allows you to put your money to work for you, not for your bank. IMO, the only personal debt worth having is a mortgage, and then only if the rates are very low. Never borrow to purchase a depreciating asset like a car.

^^^Excellent.

 

[gray]

Buy some decent furniture (not cheap crap). Buy yourself a few toys. I bought a camera ($1.5k), a bicycle ($5k), and some really nice pots and pans ($1k).

Hah, you sound like me. I'm graduating with a PhD in a few months (although I used to have a real job) and a while back I bought a $2k camera and I'm eying a Ridley Noah.

Also I'm really really surprised that nobody seems to have mentioned the effect federal and state taxes has on your paycheck. Sure, you may be making 80k on the top line, but after taxes it's more like 50k.

In Illinois, per (http://www.adp.com/tools-and-resour...calculators/salary-paycheck-calculator.aspx):

$80,000/yr gross means $6,666.67 per month

but:

Federal Withholding	$1,281.56
Social Security	$413.33
Medicare	$96.67
Illinois	$333.33
Net Pay	$4,541.78

A $90,000 P85, with a 2% APR loan (assuming you can find someone which will give you that kind of rate), entirely financed over 72 months, is $1327.54 a month (it's $1577 over 60 months), which is almost 30% of your income. Keep in mind that this calculation doesn't take into account any medical insurance contributions you may have to make to your employer or the fact that you probably want to rent an apartment (which in Chicago, is easily $2k a month outside the ghetto). You're left with about $1k and if you save just half of it so you aren't living on the edge in case you get terminated in a few months, you have $500 a month, which is super easy to blow if you like to eat not-ramen every day. Bottom line: You can get a P85, but you'd probably have to live in your mom's basement or the ghetto.

 

[kinddog]

whatever happened to "delayed gratification"? I mean, if this kid gets a $100k P85 at 22 years old, what the hell does he have to look forward to? to work towards?

wouldn't it mean more to him to work hard for 5-10 years, enjoy the freedom of youth with its minimal responsibilities, while creating a "Tesla Model S" investment fund that he regularly adds to, and then one day proudly write a check for $100k and truly OWN a dream car (instead of it owning you)? maybe at the fossil-like old age of, I don't know... 30?

this country is addicted to having EVERYTHING, and having it NOW (or preferably yesterday). makes me sick to my stomach. the hyper-consumption behavior of the wretched baby-boomer generation has clearly infected their kids.

 

[yobigd20]

A $90,000 P85, with a 2% APR loan (assuming you can find someone which will give you that kind of rate), entirely financed over 72 months, is $1327.54 a month (it's $1577 over 60 months)

Alliant Credit Union for $92k
1.99% @ 72 months = ~$1350/month.
2.99% at 84 months = ~$1200/month.

But yes, I agree with you. For an $80k salary, its still chewing up too much of your income - unless you're living at mommy and daddy's. Not recommended.

 

[LagunaDallas]

whatever happened to "delayed gratification"? I mean, if this kid gets a $100k P85 at 22 years old, what the hell does he have to look forward to? to work towards?

I am this person, and 100% agree. My parents are not car people. They provided me with a good education and a solid foundation in financial responsibility, but I have always earned my own way (including my first car at 16). I'm now 34 and have had 30 cars, from the MS P85 to new Range Rovers, Porsche 911s, Mercedes SL65 AMG, etc. I'm now at the point where everything is "been there, done that." If I could go back and do it all over again, I would've drastically slowed down my pace of car flipping and would probably have another $250K in the bank. I've made money on a few, lost on most, and overall spent way too much on cars than I should have...and now it's kind of boring. The "hunt" for exactly what I wanted is no longer very exciting. For someone as passionate and obsessed with cars as I am, it's much more fun to have something to look forward to and strive for rather than being at the top so early. It keeps you hungry and pushing to get to the next level. I'd much rather be saying this at 64 than 34, and can't even imagine having to pay for a Model S right out of college.

Having said all of that, the Model S is the #1 favorite of ANY car I have ever owned because it is so *different.* It is worth every penny, yet is MUCH more enjoyable when the finances of it --- whether it's writing a check or financing --- cause very little to no effect on your finances. Trying to pay for one at 22 would be way too stressful.

 

[gray]

whatever happened to "delayed gratification"? I mean, if this kid gets a $100k P85 at 22 years old, what the hell does he have to look forward to? to work towards?

wouldn't it mean more to him to work hard for 5-10 years, enjoy the freedom of youth with its minimal responsibilities, while creating a "Tesla Model S" investment fund that he regularly adds to, and then one day proudly write a check for $100k and truly OWN a dream car (instead of it owning you)? maybe at the fossil-like old age of, I don't know... 30?

this country is addicted to having EVERYTHING, and having it NOW (or preferably yesterday). makes me sick to my stomach. the hyper-consumption behavior of the wretched baby-boomer generation has clearly infected their kids.

At least the kid's parents aren't buying the car for him. There are dozens of internet stories about kids crashing their hi-po cars and dying.

Alliant Credit Union for $92k
1.99% @ 72 months = ~$1350/month.
2.99% at 84 months = ~$1200/month.

But yes, I agree with you. For an $80k salary, its still chewing up too much of your income - unless you're living at mommy and daddy's. Not recommended.

Wow, that's better than my credit union (mine is only 1.99 up to 60 months). Thanks!

 

[johnnyS]

Ignoring all the good financial advice about delayed gratification, how does it look to be driving a nicer car than your boss. If you are a professional athlete, it is O.K. to be driving a Bentley when the coach/manager is only driving a Benz. Older colleagues saddled with mortgages are not going to like the young punk fresh out of college driving the hotest car on the market. For the most part I think you want to look practical/sensible to your new employer.

 

[jerry33]

$5k for a bicycle?? WOW. Does it pedal itself and give you a back massage while you're on it?

$5K isn't all that expensive. I paid $7k about 15 years ago for a custom road bike.

 

[kinddog]

I am this person, and 100% agree. My parents are not car people. They provided me with a good education and a solid foundation in financial responsibility, but I have always earned my own way (including my first car at 16). I'm now 34 and have had 30 cars, from the MS P85 to new Range Rovers, Porsche 911s, Mercedes SL65 AMG, etc. I'm now at the point where everything is "been there, done that." If I could go back and do it all over again, I would've drastically slowed down my pace of car flipping and would probably have another $250K in the bank. I've made money on a few, lost on most, and overall spent way too much on cars than I should have...and now it's kind of boring. The "hunt" for exactly what I wanted is no longer very exciting. For someone as passionate and obsessed with cars as I am, it's much more fun to have something to look forward to and strive for rather than being at the top so early. It keeps you hungry and pushing to get to the next level. I'd much rather be saying this at 64 than 34, and can't even imagine having to pay for a Model S right out of college.

a wonderful admission and contribution to the conversation. your self-awareness alone is a testament to your maturity. I say this as your elder of 2 years... lol

- - - Updated - - -

Ignoring all the good financial advice about delayed gratification, how does it look to be driving a nicer car than your boss. If you are a professional athlete, it is O.K. to be driving a Bentley when the coach/manager is only driving a Benz. Older colleagues saddled with mortgages are not going to like the young punk fresh out of college driving the hotest car on the market. For the most part I think you want to look practical/sensible to your new employer.

excellent point. i stroked a check for the car and can easily afford it. that said, I am on the serious down-low about it. only one co-worker knows i have it (we haz huge parking garage), and just a few friends. posting it on Facebook or swaggering into the office in it? no way.

there are so many jealous haters out there. couple that with a brutal recession, and yes... everyone should stay on the down low. a 22-year old kid rolling up to his entry level job in a $100k luxury car is about as excruciatingly awkward and tone-deaf as it gets..