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I have about 50% of my model 3 budget in TSLA & SCTY at the moment. It won't affect whether I buy the car but it may delay the timing. If the stock is going for a huge run after Model 3 delivery + Tesla Energy + SCTY integration in 2017-2019, it would be silly to sell the stock in 2018 to pay for the car.
I would be quite disappointed if the stock price level in 2018 is where we are today.
I would be quite disappointed if the stock price level in 2018 is where we are today.
Remember, stocks are long term assets. You wouldn't put your money into a 30 year bond for something you are planning to buy in 2 years, right? Same with stocks. Stocks are perpetual securities in that they don't have to ever be redeemed, and so they're subject to a lot of risks.
This is critical because if they are really assets with a duration of 30+ years, then that doesn't support a basic process of asset liability matching.
In general, the stock price of these companies should be independent of your ability to buy the car from a prudent financial perspective.
This is critical because if they are really assets with a duration of 30+ years, then that doesn't support a basic process of asset liability matching.
In general, the stock price of these companies should be independent of your ability to buy the car from a prudent financial perspective.
ModelNforNerd
Active Member
I'm not a CPA, or even super good at complex math.
But if you're dealing with a large number of shares, your short or long term Capital Gains Tax hit might be a big enough hit to not make cashing out the stocks worthwhile.
If your capital gains tax hit is $3,000, just so you can reach for a $2,500 option.........
Yea. My TSLA stock and my Model 3 fund are completely separate from each other.
But if you're dealing with a large number of shares, your short or long term Capital Gains Tax hit might be a big enough hit to not make cashing out the stocks worthwhile.
If your capital gains tax hit is $3,000, just so you can reach for a $2,500 option.........
Yea. My TSLA stock and my Model 3 fund are completely separate from each other.
Back in March 2013 TSLA was trading at $30 and a year later it was at $240. I really hope people do not plan on it going up the same percent from from $200 to $1,600 in the next year.
Just because you like a product does not mean it is a good investment. On a side note if they have a 6 month average of $327 Elon has a massive bonus coming.
Just because you like a product does not mean it is a good investment. On a side note if they have a 6 month average of $327 Elon has a massive bonus coming.
Great reminder - great product does not translate into a great investment.
Ben graham once said that your investment return is a function of the price you pay, because it's the only thing you can control - the price you sell at in the future will be whatever it is. So you want to pay as little as possible when buying in. I won't say tesla is expensive, but it's certainly not cheap... A lot of good outcomes are being priced into the price today.
BluestarE3
Active Member
No, stock price is not a factor in my ability to buy a Model 3 because I don't own any TSLA stock. 
ModelNforNerd
Active Member
and depending on your tax bracket, you're on the hook for either 15% or 20% Capital Gains. That's a hefty markup for a $2500 car option.
No, but it could affect how I choose to pay for it.
When I first started planning for my future Beloved, I decided that it would be super nifty if TSLA paid for my Tesla. I bought a block of shares (2012), which is tentatively earmarked for that purpose. I also have bought/am buying subsequent, smaller blocks that are meant for keeping until various (personal) milestones are reached.
That said, my plans are as flexible as a Cirque du Soleil acrobat. TSLA isn't the only investment I'm holding outside of my IRA and HSA, and I'm also considering financing a small percentage because I've never had a car loan or mortgage, and one of those in good standing in my history is apparently needed for credit score perfection. And why not strive for perfection (if interest rates are low enough)?
Oh yeah, as I mull on this, I suppose it COULD, because in the HIGHLY unlikely event of a tanking-to-bankruptcy share price due to radical changes in the Tesla Mission, I might decide that someone else's EV is a better choice. I don't think THAT'S going to happen.
But I definitely won't be paying any short-term CG taxes; I gamble in Super Duper Slo-mo.
Happy Monday!
When I first started planning for my future Beloved, I decided that it would be super nifty if TSLA paid for my Tesla. I bought a block of shares (2012), which is tentatively earmarked for that purpose. I also have bought/am buying subsequent, smaller blocks that are meant for keeping until various (personal) milestones are reached.
That said, my plans are as flexible as a Cirque du Soleil acrobat. TSLA isn't the only investment I'm holding outside of my IRA and HSA, and I'm also considering financing a small percentage because I've never had a car loan or mortgage, and one of those in good standing in my history is apparently needed for credit score perfection. And why not strive for perfection (if interest rates are low enough)?
Oh yeah, as I mull on this, I suppose it COULD, because in the HIGHLY unlikely event of a tanking-to-bankruptcy share price due to radical changes in the Tesla Mission, I might decide that someone else's EV is a better choice. I don't think THAT'S going to happen.
But I definitely won't be paying any short-term CG taxes; I gamble in Super Duper Slo-mo.
Happy Monday!
I'll probably base trim level or options based on stock price.
I don't see at all what's wrong *gasp* using your stock profits to buy things. I've paid off significant chunks of my mortgage by selling off shorter and medium term shares many times more quickly than I would have by directly paying my principle. What's the point of holding that money until I die? That's what my 401k is for.
My main forms of income are subject to much higher taxes than my capital gains tax rate. On that argument using stock profits to buy a Model 3 or options is far superior to using my job's income. :/
I don't see at all what's wrong *gasp* using your stock profits to buy things. I've paid off significant chunks of my mortgage by selling off shorter and medium term shares many times more quickly than I would have by directly paying my principle. What's the point of holding that money until I die? That's what my 401k is for.
My main forms of income are subject to much higher taxes than my capital gains tax rate. On that argument using stock profits to buy a Model 3 or options is far superior to using my job's income. :/
But doesn't that assume that you're not going to realize the capital gain in the future? Since you're going to have to pick up that tax rate at some point (very low, btw), the math actually favors viewing the potential gains on the taxes over the life of those holdings.and depending on your tax bracket, you're on the hook for either 15% or 20% Capital Gains. That's a hefty markup for a $2500 car option.
By your logic, someone in a 35% income tax bracket also paid a 35% premium for a car option. 20% is starting to look pretty attractive!
AustinPowers
Total Smeghead
To answer the OP: no, for me it won't. I have very few TSLA shares. There would not be a significant enough contribution towards the Model 3 purchase, even if TSLA was at 500 USD per share
T3SLA3
Member
I brought at $220 & $190 = $205 but don't expect to sell until well after Model 3 release, maybe 2021+.
Company value and stock price are not directly related.
Especially with the amount of shorts = scam press in the field.
Company value and stock price are not directly related.
Especially with the amount of shorts = scam press in the field.
ModelNforNerd
Active Member
Moot point for me. I decided a while ago to just leave my stock as-is. Considering how volatile everything is these days, having my Model 3 fund in CDs seems to be the safer move so far. Brexit won't set me back in the pursuit of my Model 3.
ModelNforNerd
Active Member
I had the same problem in the 2014 tax year, but that was when I was an IT Consultant with VA healthcare (aka, no tax shelter). Between my wife and I, the only real deductions (we don't have kids) were her healthcare, 401Ks, and the mortgage interest.
But I've since taken a pay cut (on purpose) to jump into Federal work, and all of the tax breaks that come with that. By the time I'm done with my taxes, my wife comes out as the real breadwinner on our return. I'm ok with that. I get the Tesla.
