When Lambo? NEVER. Why You Should Never Buy a Luxury Car.

Simply put, buying a car for $200,000 or more is a big waste of money.

Might as well do this:

To me, in order to buy a Lamborghini, or any other type of high-performance luxury vehicle, your salary would have to be SO BIG that spending $200,000 should feel like most of us taking our spouses out to a high-class dinner at a Michelin restaurant.

Feel free to call me crazy, but that would be my criteria for deciding how big a salary I would need in order to justify buying such a car.

So what do I mean by that?

Let's see... I can calculate the relative cost of purchasing such a car and then compare that to a minimally middle-class income. So bear with me while I write on the back of the envelope here...

A really nice dinner can set you back about $300... which is about 10% of the monthly disposable income of the lowest tier of middle-class folks... To determine what your annual salary would need to be... IMHO... to buy such a car...

You would simply multiply $200,0001012... for a total of...

$24 million per year.

Yeah, I know it sounds crazy... At least we're talking pre-tax income here. That's gross income before taxes.

But this is just my opinion. Let me explain.

The fact is that you really only just need to go from one place to another. And today, there are just so many affordable, safe, clean, and more environmentally friendly options to get people from A to B and back again. There's public transportation, Didi/Uber, Mobike/ofo, walking, taking your own bike, those crazy motorized personal transport things, etc. In some cities even, you really don't even need to have a car. They're more trouble than their worth.

IN SOME CITIES, even, the economic costs of owning a car, in the long run, FARRRR outstrip the costs associated with simply purchasing that car.

Let me list the economic costs associated with car ownership right here:

• A parking space to store your car while you're at home.
• Parking fees to park your car while you're out and about town.
• Insurance.
• Fuel.
• License plate fees, which in cities like Shanghai can far exceed $10,000!
• Maintenance costs.
• Don't forget to include the value of all the personal time you have to spend managing this declining-value asset!

If I left any reason out please let me know in the comments below. 👇👇👇

To me, when you add up all of these costs, they are such an onerous burden that it just doesn’t make any economic sense to own any car, much less a luxury vehicle like a Lamborghini.

Especially in big cities with well-developed public transportation and plenty of amenities nearby, all of these expenses combined outweigh the usefulness of the asset. So maximizing the economic utility of car ownership happens with a car that costs somewhere between $10,000 and $30,000.

Anything beyond that is really just a waste of money.

Instead, I prefer to buy stocks, companies, houses, and crypto for my investment portfolio.

These are all assets that actually have a chance of going up in value.

Disagree? Let me know! We can have a spirited debate.