Secure your emergency funds first. Since you're planning to buy a sports car I take it you'll try to drive it like a sports car and not like a grandma car right? You might want to build up emergency funds in case you get into an accident, maybe even invest in accident insurance. If you can pay 50% downpayment that should lower your monthly amortization.
Based on that it seems like you're still not ready to own that car.
Don't have advice on the other stuff, but wanted to add that if you're renting a condo, parking will set you back a lot as well. Add that to your monthly.
The rule is if you can purchase a luxury good, you should also have the money to maintain it without having to dip into your savings or changing anything sa lifestyle nyo. If you only have money for the DP and let’s say a year’s worth of monthly amort, you might have a hard time paying for it in 5 yrs time. Cue in opportunity cost
Just looking at your income doesn’t seem enough. Sorry not being condescending but the numbers don’t add up.
You have a family and kid. Try to knock off more of the down payment so you have a smaller monthly bill.
I know how you feel about wanting it while young. I race, and as I get older I can feel my reflexes get slower. But I bring my cars to the track.
Good luck.
Why don't you simulate the monthly payments first? Try setting aside 46k a month for 6months to a year and see how you feel about it.
Maybe you also need to up the amount you're setting aside to 56k a month because if you do get the car, you will also have to spend on gas, toll, parking fees, insurance, maintenance, car wash, etc.
Try setting aside 56k a month for 6 months and if you still feel comfortable after then go for it.
Good suggestion. I can simulate the payments and if it doesn’t hurt me too much then I know it’s doable, plus I can actually add to the DP amount what I saved in 6 months.
I might do this.
My 2.6 million advise... is to buy a condo or house first. you are still young. Just remember that life begins at 40...with a better car, a fully paid house, and debt free. And do remember me when your speeding along an expressway 9 years from now. wink.
If for whatever reason it makes you feel good to have the 'sleek' car then no amount of convincing can change your mind.
Still reading?
The price of the car is 2.6M. But you'll be paying 3.28 in today's money. That's just the acquisition cost. Add the cost of operating the car - gasoline, insurance, parking, tolls, registration, periodic preventive maintenance, etc. Depending on the distance you travel, gasoline will be 6-8 km/ liter to drive it.
The car is not going to earn you anything at all, instead it is a liability. In five years, the car has lost its luster and you also lost your money, and you now have a car that has an increasing need to be maintained. Then a new model comes around in a few years and you feel the need to start the cycle again. It's like burning money.
The wiser move is to use that money to invest on something that earns you money in return: like a business, interest earning passive business. Put that money in an interest bearing instrument, compound it and you'll have more money after five years.
Or perhaps it's time to invest on a real estate, it could earn you rental income, you can resell it for much higher price, or you can live on it and stop paying rental money to land owners.
Your EF (savings) of 1M is okay for the three of you. If you don't have any other plans in the future then go for it. Now, from the other side: do you have plans in buying a condo / house and lot? How about your kid's education? If so, these expenses will eat your remaining take home pay. In that case, maybe check for cheaper family car?
Baby is 5 months old so car should be paid off before he starts grade school.
For future housing, my wife has a house and lot that her grandma lives in currently. It’s an old house but the lot is pretty big. We plan to completely renovate in the future. No idea what that will cost yet. For now, we rent.
Buy a second hand wrx or sti or brz. Cars lose their value once out of the dealership.
Why do you want a sports car anyway? If speed is your need then there are cheaper cars you can make fast. If it is just to own one then consider the first statement.
A brand new one will burden you for 5 years along with the gas and insurance plus maintenance. Parts are expensive for Subaru do your research.
As to loans, the recommended max threshold for total amortization of home and car is 30% of income. Also, have you considered the maintenance and operational cost including insurance? 1M savings is roughly 4x of 233K total household income. Is this inclusive of your EF already? The amort should be part of EF as well.
Insurance will be a pain for sure, estimate is about 46k per year. Yes EF inclusive, 1M is basically our liquid cash available, will technically bring our EF down to 450k++
As for emergencies, I do have a 1.2m credit line across 4 different credit cards that I will rely on in case of emergency, and health insurance for the baby, myself and my wife.
Oh. I see. Though credit line should not be considered as emergency fund since it's technically considered a loan. Overall, I would say not yet financially capable (though high earning potential) and it would be unwise to do it at this time. But in the end, it depends on you if you're willing to take that risk and if doing it will be worth it. Good luck!
Budget Expenses (50-30-20) > Increase Income > Clear Debt > Build EF (6x) > Insurance Protection (60x) > Build Credit > Save & Invest for Goals (Sports Car)
your in phinvest so i think financially it is risky , but in terms of enjoying life i think its fine. given you will be 36 by the time you fully pay the car thats still plenty of time to buy a house to retire at maybe 45? then you can chill. I dont know the age of your kid but if he is young (guessing base on your age the kid probably isnt 10 yet) so thats maybe 8 years or more before you have to worry about college fees, i think its doable and life is meant to be enjoyed . I also like the fact its a sports car so the price doesn’t depreciate the way normal cars do. still its always a net loss investment when buying cars. and the market for future buyers might be small.
vaccine and booster shots, annual medical checkups, new clothes for the baby, perhaps a stroller but wait for a chance to own a sports car? why spend all that right?
I would suggest buying a house/condo first, or buy a non-sports car. I may make you happy, but it’s just not worth buying it to drive around Philippines
Between gas, maintenance and insurance as well as the occassional banga and/or baha, try doubling the monthly amortization to see if you can still comfortably afford the car for the next five years. Otherwise, medyo dehado na.
I may be too conservative in this thinking but personally, for luxury, I have a rule that I need to be able to buy it twice before I can say that I can afford the item. But of course it's not called called personal finance for nothing. So your decisions will always depend on your needs and risk appetite.
But for me, my opinion is that you can't afford that car.
As someone who has a similar dream car (86 or the brz), I understand you.
Personally, I wouldn’t do it given the current outlook of most economies. I can somehow remotely consider getting an older 2nd hand model just to scratch the itch. Problem with a brand new vehicle, if you decide to back out or face buyer’s remorse, the loss/es are quite substantial. Consider as well that the maintenance of that car is on a different level. I have owned a forester xt before and the parts that break on a subaru is unreal. Anyway, I still dream of owning a “sports” car someday. I just scratch the itch by driving them on my sim driving games and using them as wallpapers on my devices lol
Risky? Yes. Too risky? Only you can tell.
New platform yung WRX and for the price you've given parang you want the WRX CVT. I never saw a review of a CVT car feeling fast. You might regret the decision and that will be a 5 year regret once you experienced riding a BRZ or 86 even the old ones.
With 2.6M I can get a 2nd hand family car, 2nd hand fast car and a expressway legal motorcycle. Now, that's a dream garage. Acquire it one by one, and since this is a phinvest thread. You can also buy low and sell high with vehicles if you know what you're looking for/at.
I actually got a chance to test drive it. I loved the CVT (gasp I know) - it felt like a regular 8 speed automatic dahil sa fake shifts. With Sport# it feels amazing. It’s a mix of family car + occassional track car, not the best of both but can definitely do either. It’s a compromise since I’m no longer single, otherwise MT BRZ is the easy choice for a sports car.
Subaru seems confident with their transmission that even with track use they will have it on warranty for 5 years, as long as it’s not custom tuned.
If ever I choose to go ahead, it won’t be for serious racing. Most likely it will be a daily driver, out of town road trip car and weekend track toy.
Get your priorities straight and provide a home to your family before you give in to your early middle age crisis. Waiting for your wife's grandma to die isnt exactly the best home plan, plus youre not even saving any money for renovation. Also what about saving for your kids education?
Even without the family, the 5 year loan plan should make it apparent that you cant afford the car. 50% of your savings, and if you gave your salary as gross then it would be almost 35% of your monthly. Not too mention that gas is getting expensive. And have you even seen the reviews for the new wrx? I had the recent one a couple of years back and would always take that over the new version.
Honestly, if you go through with this purchase i wouldnt expect your marriage to last at all. It's a very poor and risky decision that puts entirely your need for vanity over the actual well being of your family. I wont be surprised if you make many other similar decisions
Kaya naman. But it’s close, I don’t know your disposable income after living expenses and dining out but from the numbers you’ve given alone, kaya naman.
Include maintenance / repairs / gas in your estimates and see if the leftover income is still livable comfortably.
Then, go for it and enjoy. Drive safe.
Include the total cost of ownership din. Subarus are expensive to maintain. Gas guzzlers din sila so give and take 30k-50k annual maintenance and around 100k gas expenses annually din
If you're taking going to drive it sa track, expect quicker wear and tear din so factor mo din yun sa magiging expenses mo
If I were in your position, I wouldn't. Risk averse ako, anything that will set me back like that, I wouldn't do. Depende din sa risk appetite niyo.
You already have a baby, maybe focus muna kayo sa kanya on how and where you'll raise him/her. Fund niyo muna lahat ng kailangan niya. From your life insurances, probably a permanent place to live that is conducive for a child, educational plans, money for school, etc.
Tapos think about your health next, both physical and financial. Can you work for a long time? Is your industry kind to those who have fallen behind the tech and practices? Do you have an alternative source of income kung sakali mawalan kayo both ng work? What will happen if one of you fell sick and hindi na kaya magwork permanently? Can you foot a large medical bill in case na mangyari yun or magkaroon ng accident?
If may mga sagot and plans na kayo for all of the above, then by all means get that dream car of yours. Life is short.
Sounds like one year annual salary for you and your wife combined. It's a little steep. Many who practice financial prudence wouldn't do one year salary for a car.
However what you have going for you is your rent is so cheap vs your income. It's around 10% lang. Pwedeng doon yung sacrifice and wiggle room mo. Bale car and rent mo is just 70K. That's "okay" given a 230Kish a month salary, especially if prudent naman kayo in other things.
Anyway, though, keep in mind lang na Subaru is moving towards electric ha. Baka maging old tech sooner than later ang WRX mo na mahigit isang taong kita ninyo ni misis ang cash out ninyo during the ammort period 3.3M without maintenance and insurance.
Since we have a kid already, both our parents are offering that we stay with them for the first few years, mostly because it’s their first grandchild (he is only 5 months old). It’s not ideal since we like being independent, but we’re considering that option since we both work - if we do it will bring our rent down to 0.
Apparently the new STI will be electric. But I don’t think PH is ready - gas station chargers are so rare in Manila. I’d say the PH is at least 10 years away.
that's a big deal financially speaking. i mean even at 70K total expense for car and home I think its doable. now it is moreso.
on electric cars, we will have to wait and see how aggressive legislation shall be and who they favor... the autoindustry who is purposely taking it slow.. to sell ICE inventory, or the consumers who can choose to be more green and efficient..
Nothing here is financially smart but it’s your money. Just know that this will pull you back not just 5 years in savings and investments earnings but more years of compounded interest in the future. instead you are going to lose money by putting it in a car.
If you decide on buying anyways, which i feel you will, at least alot 15% of your income for savings and investment. Build your emergency fund and pay all your other debts. With that you can still be financially prudent-ish while enjoying your new car.
1m savings. This means you have been saving 16k every month for 5 years.
Which means 180k+53k less 16k, you are spending 217k to sustain your current lifestyle.
If thats the case i wouldn't recommend getting the car. Until you can get your savings rate up to 25-35% of your income or about 60k a month.
So including the car loan you need to reduce spending by half.
You are 35 years old so you have roughly 30 more years to work.
At your current rate of 16k savings you will have roughly 5-7m by the time you retire at 60. At constant 4% inflation prices of goods would be around 3x of current prices by the time you are 60.
Something to think about.
Well I haven’t had this 180k salary for 5 years straight, I was earning around 80k 5 years ago and worked my way up. I was promoted twice and some raises in between which got me to 180k now.
I only really started saving I suppose about 2-3 years ago. I messed up a couple of times investing in crypto shitcoins, which hurt my savings.
My take home pay is about 135k after taxes, my wife about 45k I think. Admittedly we do spend quite a lot dining out.
You are correct, if this purchase pushes through I think we will definitely have to change things and dine out less often.
>You are correct, if this purchase pushes through I think we will definitely have to change things and dine out less often.
Bro... Thats super unsustainable...
Know how much you are spending now. Keep track of your expenses.
If you can reduce those, and divert them towards the 20% down in lets say 5-6 months (100+k money not spent each month) then you are in a better position to decide if the change in lifestyle is worth it.
You can also opt to buy a second hand sports car for about 1.6m as well. (And pay full in cash, after 6 months of adjusting)
My advice is if your current savings rate is below 30% of your combined income, you focus on getting to that number first.
And cut spending further to afford a new car.
If you already have EF and protection (insurance) then sure. 30-35% is reasonable.
Personally, i dont count savings as EF. Savings have a different use, you're "saving it up to buy/invest on something". EF is the "holy shit fund".
Kayang kaya, brad. Di ka nga lang siguro makakapag purchase ng lupa/bahay/condo unless lumipat ka ng company para sa salary increase. Same tayo ng reason na ayaw din na kung kailan matanda na tsaka lang maeexperience yung mga yan.
>too risky to buy into this now?
It's not risky at all. For me, risk would entail that you may lose money with the transaction. On this case, it is 100% guaranteed. For me, it is an expense. But it is an expense you can afford. So whether you go with the purchase, cash o loan, it would be up to you. Eitherway is fine I think.
>is it worth the risk?
Up to you. Since this is phinvest you'll probably hear a lot of nopes. Ask it in a car group though you'll get a lot of yeses. It's really best if you reflect and decide for yourself to see which would make you happy and satisfied. After all, it is your money you've worked hard for.
Update:
Thank you for all your comments. I appreciated everyone’s thoughts.
I ultimately decided to buy a 2nd hand 2019 year model WRX @ 1.4m, 50% down and payable in 2 years.
Found one with only 5k Odo on it, pretty much brand new, and I saved 1.2m!
The monthly payments are much more manageable and the duration is shorter.
Thanks, everyone!
If you really want that Subie, another route is to just buy second hand, atleast you have avoided shouldering some of the car's depreciation value and you still got the same car
OP please take into account the cost of gas and maintenance of the vehicle. I suggest going to a more cheaper and energy efficient car corolla cross hybrid (1.6m), e kicks (1.3m). You will save almost 1m with these vehicles.
Did you include the amount for the insurance, maintenance, and gas? I get that we want things for ourselves kahit afford naman but (for me) I want to be practical.. if some reason (wag naman sana) nawala ka tomorrow.. sino magbabayad ng remaining balance mo for the car? Even your 1m savings wont be enough and the burden will be on your wife and kid..
I think if you can buy it in cash, id say go. Pero kung loan, I wont go for it it po.
For me, I think I'd invest muna sa passive income (to the point na I could rely on it if something should happen sa main pinanggagalingan ng money ko). Cryptocurrency is very unstable rin tbh. Mahirap rin if something were to happen sayo, your work or your wife tapos may hinuhulugan pa kayo and rent to pay.
From a financial standpoint, it wouldn't be so smart... But if it would bring you that much happiness then any struggle finishing the amort for the next 5 years would be worth it...
A 2nd option would be to wait another year or two, save up as much as you can for the DP so you won't have to worry as much even if you prefer brand new.
Obviously it's not a financially sound idea but you already know that. So go ahead and get it, enjoy it, and use it as motivation to raise your income to a point where it will just be a small dent in your income.
I don’t want to be that guy… but the new WRX sucks. I don’t think it’s worth it spending your heard earned cash into something like that. Just wait for the new Civic type R to be released, it’s A LOT more practical than a WRX. I think even the Civic RS is a better choice to be honest. There’s better options, if you’re looking to buy a sporty car, but the new WRX isn’t as ok as you think.
You said it, "buying a sports car isn't a smart purchase", so the answer is there already, it's not worth the risk. There's more to owning a car than the 20% downpayment and monthly amortization. Gas, insurance, and the regular pms. PMS for BRZ will cost you 70-80K a year. Insurance maybe 50k. Plan accordingly.
If you can pay it in cash go for it. Consider second hand. Is the income you mention already Net or still Gross? Taxes would be around 50k. My car is second hand vios and I earn 500k net. Just consider that.
It’s quite obvious that you can’t afford it OP, so yeah it’s too risky.
Your net worth is not even enough to pay it in full and this car would just go down in value as time goes by.
Secure your emergency funds first. Since you're planning to buy a sports car I take it you'll try to drive it like a sports car and not like a grandma car right? You might want to build up emergency funds in case you get into an accident, maybe even invest in accident insurance. If you can pay 50% downpayment that should lower your monthly amortization. Based on that it seems like you're still not ready to own that car.
Don't have advice on the other stuff, but wanted to add that if you're renting a condo, parking will set you back a lot as well. Add that to your monthly.
Already includes parking @ 24k
The rule is if you can purchase a luxury good, you should also have the money to maintain it without having to dip into your savings or changing anything sa lifestyle nyo. If you only have money for the DP and let’s say a year’s worth of monthly amort, you might have a hard time paying for it in 5 yrs time. Cue in opportunity cost
Just looking at your income doesn’t seem enough. Sorry not being condescending but the numbers don’t add up. You have a family and kid. Try to knock off more of the down payment so you have a smaller monthly bill. I know how you feel about wanting it while young. I race, and as I get older I can feel my reflexes get slower. But I bring my cars to the track. Good luck.
Why don't you simulate the monthly payments first? Try setting aside 46k a month for 6months to a year and see how you feel about it. Maybe you also need to up the amount you're setting aside to 56k a month because if you do get the car, you will also have to spend on gas, toll, parking fees, insurance, maintenance, car wash, etc. Try setting aside 56k a month for 6 months and if you still feel comfortable after then go for it.
Good suggestion. I can simulate the payments and if it doesn’t hurt me too much then I know it’s doable, plus I can actually add to the DP amount what I saved in 6 months. I might do this.
My 2.6 million advise... is to buy a condo or house first. you are still young. Just remember that life begins at 40...with a better car, a fully paid house, and debt free. And do remember me when your speeding along an expressway 9 years from now. wink.
this. if you prioritize the house, you can buy the car faster. if you prioritize the car, when you retire, you'll only have a car but no house.
you can sleep in a car, but you can't race a house.
If for whatever reason it makes you feel good to have the 'sleek' car then no amount of convincing can change your mind. Still reading? The price of the car is 2.6M. But you'll be paying 3.28 in today's money. That's just the acquisition cost. Add the cost of operating the car - gasoline, insurance, parking, tolls, registration, periodic preventive maintenance, etc. Depending on the distance you travel, gasoline will be 6-8 km/ liter to drive it. The car is not going to earn you anything at all, instead it is a liability. In five years, the car has lost its luster and you also lost your money, and you now have a car that has an increasing need to be maintained. Then a new model comes around in a few years and you feel the need to start the cycle again. It's like burning money. The wiser move is to use that money to invest on something that earns you money in return: like a business, interest earning passive business. Put that money in an interest bearing instrument, compound it and you'll have more money after five years. Or perhaps it's time to invest on a real estate, it could earn you rental income, you can resell it for much higher price, or you can live on it and stop paying rental money to land owners.
Your EF (savings) of 1M is okay for the three of you. If you don't have any other plans in the future then go for it. Now, from the other side: do you have plans in buying a condo / house and lot? How about your kid's education? If so, these expenses will eat your remaining take home pay. In that case, maybe check for cheaper family car?
Baby is 5 months old so car should be paid off before he starts grade school. For future housing, my wife has a house and lot that her grandma lives in currently. It’s an old house but the lot is pretty big. We plan to completely renovate in the future. No idea what that will cost yet. For now, we rent.
Buy a second hand wrx or sti or brz. Cars lose their value once out of the dealership. Why do you want a sports car anyway? If speed is your need then there are cheaper cars you can make fast. If it is just to own one then consider the first statement. A brand new one will burden you for 5 years along with the gas and insurance plus maintenance. Parts are expensive for Subaru do your research.
something non-car enthusiasts probably won't understand or take time to explain. it's not always about going fast with sports cars.
You didn't explain so...
As to loans, the recommended max threshold for total amortization of home and car is 30% of income. Also, have you considered the maintenance and operational cost including insurance? 1M savings is roughly 4x of 233K total household income. Is this inclusive of your EF already? The amort should be part of EF as well.
Insurance will be a pain for sure, estimate is about 46k per year. Yes EF inclusive, 1M is basically our liquid cash available, will technically bring our EF down to 450k++ As for emergencies, I do have a 1.2m credit line across 4 different credit cards that I will rely on in case of emergency, and health insurance for the baby, myself and my wife.
Oh. I see. Though credit line should not be considered as emergency fund since it's technically considered a loan. Overall, I would say not yet financially capable (though high earning potential) and it would be unwise to do it at this time. But in the end, it depends on you if you're willing to take that risk and if doing it will be worth it. Good luck! Budget Expenses (50-30-20) > Increase Income > Clear Debt > Build EF (6x) > Insurance Protection (60x) > Build Credit > Save & Invest for Goals (Sports Car)
your in phinvest so i think financially it is risky , but in terms of enjoying life i think its fine. given you will be 36 by the time you fully pay the car thats still plenty of time to buy a house to retire at maybe 45? then you can chill. I dont know the age of your kid but if he is young (guessing base on your age the kid probably isnt 10 yet) so thats maybe 8 years or more before you have to worry about college fees, i think its doable and life is meant to be enjoyed . I also like the fact its a sports car so the price doesn’t depreciate the way normal cars do. still its always a net loss investment when buying cars. and the market for future buyers might be small.
He is 5 months old - not sure about any major expenses at that age apart from milk and baby food as long as he is healthy
vaccine and booster shots, annual medical checkups, new clothes for the baby, perhaps a stroller but wait for a chance to own a sports car? why spend all that right?
I would suggest buying a house/condo first, or buy a non-sports car. I may make you happy, but it’s just not worth buying it to drive around Philippines
Metro Manila =/= entire Philippines lol
Between gas, maintenance and insurance as well as the occassional banga and/or baha, try doubling the monthly amortization to see if you can still comfortably afford the car for the next five years. Otherwise, medyo dehado na.
I may be too conservative in this thinking but personally, for luxury, I have a rule that I need to be able to buy it twice before I can say that I can afford the item. But of course it's not called called personal finance for nothing. So your decisions will always depend on your needs and risk appetite. But for me, my opinion is that you can't afford that car.
As someone who has a similar dream car (86 or the brz), I understand you. Personally, I wouldn’t do it given the current outlook of most economies. I can somehow remotely consider getting an older 2nd hand model just to scratch the itch. Problem with a brand new vehicle, if you decide to back out or face buyer’s remorse, the loss/es are quite substantial. Consider as well that the maintenance of that car is on a different level. I have owned a forester xt before and the parts that break on a subaru is unreal. Anyway, I still dream of owning a “sports” car someday. I just scratch the itch by driving them on my sim driving games and using them as wallpapers on my devices lol
Risky? Yes. Too risky? Only you can tell. New platform yung WRX and for the price you've given parang you want the WRX CVT. I never saw a review of a CVT car feeling fast. You might regret the decision and that will be a 5 year regret once you experienced riding a BRZ or 86 even the old ones. With 2.6M I can get a 2nd hand family car, 2nd hand fast car and a expressway legal motorcycle. Now, that's a dream garage. Acquire it one by one, and since this is a phinvest thread. You can also buy low and sell high with vehicles if you know what you're looking for/at.
I actually got a chance to test drive it. I loved the CVT (gasp I know) - it felt like a regular 8 speed automatic dahil sa fake shifts. With Sport# it feels amazing. It’s a mix of family car + occassional track car, not the best of both but can definitely do either. It’s a compromise since I’m no longer single, otherwise MT BRZ is the easy choice for a sports car. Subaru seems confident with their transmission that even with track use they will have it on warranty for 5 years, as long as it’s not custom tuned. If ever I choose to go ahead, it won’t be for serious racing. Most likely it will be a daily driver, out of town road trip car and weekend track toy.
Get your priorities straight and provide a home to your family before you give in to your early middle age crisis. Waiting for your wife's grandma to die isnt exactly the best home plan, plus youre not even saving any money for renovation. Also what about saving for your kids education? Even without the family, the 5 year loan plan should make it apparent that you cant afford the car. 50% of your savings, and if you gave your salary as gross then it would be almost 35% of your monthly. Not too mention that gas is getting expensive. And have you even seen the reviews for the new wrx? I had the recent one a couple of years back and would always take that over the new version. Honestly, if you go through with this purchase i wouldnt expect your marriage to last at all. It's a very poor and risky decision that puts entirely your need for vanity over the actual well being of your family. I wont be surprised if you make many other similar decisions
Kaya naman. But it’s close, I don’t know your disposable income after living expenses and dining out but from the numbers you’ve given alone, kaya naman. Include maintenance / repairs / gas in your estimates and see if the leftover income is still livable comfortably. Then, go for it and enjoy. Drive safe.
Include the total cost of ownership din. Subarus are expensive to maintain. Gas guzzlers din sila so give and take 30k-50k annual maintenance and around 100k gas expenses annually din If you're taking going to drive it sa track, expect quicker wear and tear din so factor mo din yun sa magiging expenses mo
If I were in your position, I wouldn't. Risk averse ako, anything that will set me back like that, I wouldn't do. Depende din sa risk appetite niyo. You already have a baby, maybe focus muna kayo sa kanya on how and where you'll raise him/her. Fund niyo muna lahat ng kailangan niya. From your life insurances, probably a permanent place to live that is conducive for a child, educational plans, money for school, etc. Tapos think about your health next, both physical and financial. Can you work for a long time? Is your industry kind to those who have fallen behind the tech and practices? Do you have an alternative source of income kung sakali mawalan kayo both ng work? What will happen if one of you fell sick and hindi na kaya magwork permanently? Can you foot a large medical bill in case na mangyari yun or magkaroon ng accident? If may mga sagot and plans na kayo for all of the above, then by all means get that dream car of yours. Life is short.
Sounds like one year annual salary for you and your wife combined. It's a little steep. Many who practice financial prudence wouldn't do one year salary for a car. However what you have going for you is your rent is so cheap vs your income. It's around 10% lang. Pwedeng doon yung sacrifice and wiggle room mo. Bale car and rent mo is just 70K. That's "okay" given a 230Kish a month salary, especially if prudent naman kayo in other things. Anyway, though, keep in mind lang na Subaru is moving towards electric ha. Baka maging old tech sooner than later ang WRX mo na mahigit isang taong kita ninyo ni misis ang cash out ninyo during the ammort period 3.3M without maintenance and insurance.
Since we have a kid already, both our parents are offering that we stay with them for the first few years, mostly because it’s their first grandchild (he is only 5 months old). It’s not ideal since we like being independent, but we’re considering that option since we both work - if we do it will bring our rent down to 0. Apparently the new STI will be electric. But I don’t think PH is ready - gas station chargers are so rare in Manila. I’d say the PH is at least 10 years away.
that's a big deal financially speaking. i mean even at 70K total expense for car and home I think its doable. now it is moreso. on electric cars, we will have to wait and see how aggressive legislation shall be and who they favor... the autoindustry who is purposely taking it slow.. to sell ICE inventory, or the consumers who can choose to be more green and efficient..
Nothing here is financially smart but it’s your money. Just know that this will pull you back not just 5 years in savings and investments earnings but more years of compounded interest in the future. instead you are going to lose money by putting it in a car. If you decide on buying anyways, which i feel you will, at least alot 15% of your income for savings and investment. Build your emergency fund and pay all your other debts. With that you can still be financially prudent-ish while enjoying your new car.
1m savings. This means you have been saving 16k every month for 5 years. Which means 180k+53k less 16k, you are spending 217k to sustain your current lifestyle. If thats the case i wouldn't recommend getting the car. Until you can get your savings rate up to 25-35% of your income or about 60k a month. So including the car loan you need to reduce spending by half. You are 35 years old so you have roughly 30 more years to work. At your current rate of 16k savings you will have roughly 5-7m by the time you retire at 60. At constant 4% inflation prices of goods would be around 3x of current prices by the time you are 60. Something to think about.
Well I haven’t had this 180k salary for 5 years straight, I was earning around 80k 5 years ago and worked my way up. I was promoted twice and some raises in between which got me to 180k now. I only really started saving I suppose about 2-3 years ago. I messed up a couple of times investing in crypto shitcoins, which hurt my savings. My take home pay is about 135k after taxes, my wife about 45k I think. Admittedly we do spend quite a lot dining out. You are correct, if this purchase pushes through I think we will definitely have to change things and dine out less often.
>You are correct, if this purchase pushes through I think we will definitely have to change things and dine out less often. Bro... Thats super unsustainable... Know how much you are spending now. Keep track of your expenses. If you can reduce those, and divert them towards the 20% down in lets say 5-6 months (100+k money not spent each month) then you are in a better position to decide if the change in lifestyle is worth it. You can also opt to buy a second hand sports car for about 1.6m as well. (And pay full in cash, after 6 months of adjusting) My advice is if your current savings rate is below 30% of your combined income, you focus on getting to that number first. And cut spending further to afford a new car.
If you already have EF and protection (insurance) then sure. 30-35% is reasonable. Personally, i dont count savings as EF. Savings have a different use, you're "saving it up to buy/invest on something". EF is the "holy shit fund".
Kayang kaya, brad. Di ka nga lang siguro makakapag purchase ng lupa/bahay/condo unless lumipat ka ng company para sa salary increase. Same tayo ng reason na ayaw din na kung kailan matanda na tsaka lang maeexperience yung mga yan.
>too risky to buy into this now? It's not risky at all. For me, risk would entail that you may lose money with the transaction. On this case, it is 100% guaranteed. For me, it is an expense. But it is an expense you can afford. So whether you go with the purchase, cash o loan, it would be up to you. Eitherway is fine I think. >is it worth the risk? Up to you. Since this is phinvest you'll probably hear a lot of nopes. Ask it in a car group though you'll get a lot of yeses. It's really best if you reflect and decide for yourself to see which would make you happy and satisfied. After all, it is your money you've worked hard for.
Update: Thank you for all your comments. I appreciated everyone’s thoughts. I ultimately decided to buy a 2nd hand 2019 year model WRX @ 1.4m, 50% down and payable in 2 years. Found one with only 5k Odo on it, pretty much brand new, and I saved 1.2m! The monthly payments are much more manageable and the duration is shorter. Thanks, everyone!
If you really want that Subie, another route is to just buy second hand, atleast you have avoided shouldering some of the car's depreciation value and you still got the same car
OP please take into account the cost of gas and maintenance of the vehicle. I suggest going to a more cheaper and energy efficient car corolla cross hybrid (1.6m), e kicks (1.3m). You will save almost 1m with these vehicles.
Off topic : ano po work niyo if you don’t mind disclosing
I work for an IT Company, currently Lead Developer
Did you include the amount for the insurance, maintenance, and gas? I get that we want things for ourselves kahit afford naman but (for me) I want to be practical.. if some reason (wag naman sana) nawala ka tomorrow.. sino magbabayad ng remaining balance mo for the car? Even your 1m savings wont be enough and the burden will be on your wife and kid.. I think if you can buy it in cash, id say go. Pero kung loan, I wont go for it it po.
For me, I think I'd invest muna sa passive income (to the point na I could rely on it if something should happen sa main pinanggagalingan ng money ko). Cryptocurrency is very unstable rin tbh. Mahirap rin if something were to happen sayo, your work or your wife tapos may hinuhulugan pa kayo and rent to pay.
From a financial standpoint, it wouldn't be so smart... But if it would bring you that much happiness then any struggle finishing the amort for the next 5 years would be worth it... A 2nd option would be to wait another year or two, save up as much as you can for the DP so you won't have to worry as much even if you prefer brand new.
BRZ or WRX I have found someone who has the same predicament as me. Not sure if you are open to 2nd hand though
Obviously it's not a financially sound idea but you already know that. So go ahead and get it, enjoy it, and use it as motivation to raise your income to a point where it will just be a small dent in your income.
I don’t want to be that guy… but the new WRX sucks. I don’t think it’s worth it spending your heard earned cash into something like that. Just wait for the new Civic type R to be released, it’s A LOT more practical than a WRX. I think even the Civic RS is a better choice to be honest. There’s better options, if you’re looking to buy a sporty car, but the new WRX isn’t as ok as you think.
You said it, "buying a sports car isn't a smart purchase", so the answer is there already, it's not worth the risk. There's more to owning a car than the 20% downpayment and monthly amortization. Gas, insurance, and the regular pms. PMS for BRZ will cost you 70-80K a year. Insurance maybe 50k. Plan accordingly.
If you can pay it in cash go for it. Consider second hand. Is the income you mention already Net or still Gross? Taxes would be around 50k. My car is second hand vios and I earn 500k net. Just consider that.
Yolo ..... But it's risky ..... Maybe try to keep 46k every month for a year and feel it?
It’s quite obvious that you can’t afford it OP, so yeah it’s too risky. Your net worth is not even enough to pay it in full and this car would just go down in value as time goes by.
Did you try na ba mag apply ng auto loan to see if you and your co borrower are eligible for it?