It Finally Happened. We Bought a New Car.
Some things are noted for their rarity. The return of Halley’s comet. The Chicago Cubs winning the World Series. Joshua Kennon and Aaron Green buying a car. After years and years of discussing our search for our next car, the bargain we had been waiting for finally presented itself.
I know the latter shouldn’t be the case given our diversified sources of income and our net worth – we could buy a new car whenever we wanted from my copyright income alone for heaven’s sake – but it’s not exactly a secret if you’ve read my writings for the past fifteen or more years that I generally tend to hate purchasing depreciating assets. We worked hard to create those copyrights. We worked hard to build the sporting goods business. We worked hard to accumulate our portfolio. With Aaron and I having amassed everything we own from nothing, every penny we used on an asset that lost value was a penny we couldn’t use to buy more dividends, interest, rents, and royalties. This was especially true when we were teenagers and in our twenties because, assuming an ordinary life expectancy, the opportunity cost was staggering. That’s the reason we spent so many years driving Aaron’s 1993 Ford Escort, which eventually had no heat or air conditioning; a car that was wonderful in its affordability but that shook on the highway whenever we were driving between 55 and 60 miles per hour. To demonstrate what I mean, consider a 20-year old who compounds his or her money at a rate equal to the long-term average equity returns generated by the domestic stock market between 1926 and the present, which is around ten percent according to Ibbotson Associates. By 30, every $1.00 put to work becomes $2.59. By 40, it becomes $6.73. By 50, it becomes $17.44. By 60 it becomes $45.26. By 70 it becomes $117.39. By 80, it becomes $304.48.
Living in a household with two savers aware of the power of compounding, it takes a special alignment of the stars to spend money on things that don’t provide a financial return. When we do, though, we tend to focus on quality and then working to get the best deal we can within reason and that is fair to everyone involved all circumstances considered. In other words, we may be frugal but we are definitely not cheap.
After graduating from college, we both relented a bit and eventually bought cars. The first and, up until today, only car I’ve ever purchased for myself was a 2004 Jaguar that I bought modestly used in 2006. I got a fantastic deal on it, picking it up after it had been divested by a leasing company that sold it to a local dealer at auction and most of the early-years’ depreciation had been taken out of it. At the time I bit the proverbial bullet, I calculated what I was giving up in terms of Berkshire Hathaway Class B shares. I drove it for what is now the past going-on 11 years, amortizing the total expense so that it was almost nothing on a per annum basis. In the summers we’d take it into a great local shop that looked everything over, maintained it, and took care of any normal maintenance issues that arose from ordinary wear and tear. I can’t even tell you how many annual reports and books I read in the passenger’s seat during long road trips while Aaron drove and we discussed whatever was on my lap, usually a pen and paper nearby so we could write down our thoughts and observations. For awhile, we also had another car for Aaron before realizing it was redundant given that our work schedules were identical so we were almost always traveling together.
Back in 2012, we looked at replacing that car because it was approaching an age when it needed some overhauls to keep it in good working condition. I used it as an example to show how the future value of money could be combined with a tool called a decision tree to determine which trade-offs would help you maximize your personal happiness, publishing a blog post called The Opportunity Cost of the Car You Drive Is One of the Biggest Financial Decisions You’ll Ever Make. Ultimately, we decided to choose the route that maximized our compounding and repaired and upgraded that vehicle, extending the life. As of even two years ago, I had hoped to go even further than originally planned and make it to at least 2018, squeezing even more utility out of that initial outlay. There was both an emotional and intellectual satisfaction out of it; of knowing that every passing day we were able to put off getting a new car, that original outlay generated a higher and higher return. It became sort of like a game. However, as we approach 2017, the time was right for a reevaluation of the car decision tree for various reasons. One of those reasons, I’ll explain in a future post and involves us accelerating our timeline to leave Missouri for greener pastures, pulling up the drawbridge behind us. Suffice it to say, we were going to have to buy something, though we weren’t sure what that was going to be.
While we had always been looking, we began studying the market intensely several months ago, even going so far as to stop by some car dealerships to look at models. We looked at four-door sedans, SUVs, Crossovers, and even briefly considered pickup trucks like the Ford F150. However, we were busy so it was pushed to the back of our agenda time and time again. Finally, on Thursday afternoon, we decided it was time to come back to it and get it done. I called a local car dealership while Aaron was taking care of something else, gave them a list of specific VINs that interested us, and asked that they send us a list of their bottom-line prices; that we would not counter or negotiate because we didn’t have the time. Rather, if the price was good enough, we’d come in and buy the car, if it wasn’t, we wouldn’t even bother returning their call. Within ten or fifteen minutes, the gentleman who had given us his card during one of our test drive trips called us back and gave a list of bullet points, model by model. We appreciated that tremendously. The most attractive: They had several current-year, brand new, Jaguar XJL AWD Portfolio Editions with all sorts of bells and whistles that they wanted to sell to make room for the models that will be arriving next year. To free up capital and space, they offered to slash a staggering amount off their advertised price, effectively absorbing a lot of the depreciation leaving a lower asset base to be amortized over the 10 to 15 years we would expect to drive the car. It was a huge discount; enormous enough that it made me feel good about the cost. It also came with a 5-year, 60,000 mile warranty with service upkeep so we don’t have to do anything on the car for awhile.
I said I’d get back to them after talking with Aaron. We ended up getting caught up with work until around 3:30 a.m., at which point we decided to go over the details before going to bed for a few hours to get whatever sleep we could. A few calculations later – to be specific, I looked at Aaron and asked, “Would you rather have this or more shares of something like Coca-Cola? Which would give you more utility right now?” – we agreed we’d buy the car given the massive size of the discount and the overall expected costs of purchase and ownership over the next 10 to 15 years relative to what we were receiving. We called the direct office line of the sales representative who gave us the figures. To our shock, he answered like it was the middle of the day (it turns out, he has his phone line forward to his cell phone). After apologizing profusely for bothering him in the middle of the night, we told him we had a deal. We explained that our morning was booked with meetings but we could swing by in the early afternoon to pick up the car. He offered to have everything ready for us so we could avoid spending much time in the dealership since we had to get back to work. After we hung up and before we fell asleep, almost everything was hammered out over a few text messages that made the process practically effortless. He was on top of it so we could focus on more important matters, even taking the old Jaguar as a trade-in so we didn’t have to deal with it, handling everything involved while I read a 10-K on the iPad and discussed it with Aaron. The whole thing was just easy.
Funnily enough, we didn’t set out to buy another Jaguar. Neither Aaron nor I were intent on staying within the Jaguar family after I got rid of the older model but this hit on so many of our checkboxes, from design to features and at a price that was fantastic, that’s how it happened. Less than 48 hours later, we can say, without reservation, it is one of the best purchases we have ever made. The conveniences are incredible. We can remotely monitor various aspects of the car from our cell phone; e.g., if we’re in a meeting and it’s frigidly cold, we can remotely activate it to a specific temperature, check the gas levels, tire pressure, etc. It has multiple suspensions for different driving conditions. Everything is automatic from the heated windshield when it snows to the headlights automatically brightening and dimming. If Aaron and I needed to travel, we could work without missing a beat from the road as the car can transform into a hotspot and conversations with the integrated phone capabilities while driving are completely natural given the quality of the sound system. It’s also large enough in the back that we won’t have any problem accommodating two car seats when we have kids. If we’re ever traveling on business and need to pick someone up, we can easily accommodate three adults in the backseat. I wish I could adequately convey how happy we are with it. To be blunt, if we had needed two cars, we’d have considered buying two in different color combinations because it’s that well done. The jump in quality is so massive that I’ve only calculated the compounded value of the trade-off three times in my head and each time felt like we got way more than we gave up in future additional wealth. We’d do it again in a heartbeat. (After driving it, my mom put it best when she said, “It’s so you.” It’s seriously as if Aaron and I had designed a car that looks like our life; our home, our aesthetic, how we want things to be nice but somewhat understated – this isn’t a car that people tend to notice right away, which is how we like it – the emphasis on quality in even the smallest details but in a way where it is internally focused and not necessarily something the world needs to see when you’re pulled up next to them at a stoplight.)
While I can’t say we are car people, I can say there is a degree of emotional satisfaction in not only driving this particular car but being done with the car selection process so we don’t have to think about it again for a decade or longer. It’s one more thing we don’t have to worry about so we can focus on more important matters.
While this whole operation was much more straightforward, the takeaways and reinforcements for me are:
- If you are patient, you can save tremendous amounts of money. Those of you who read that earlier article know we started looking for a replacement car back in 2012. If we hadn’t found a deal like this, we’d still be looking most likely. Don’t let the presence of a time crunch cause you to enter into less-than-favorable transactions. Make decisions before external pressures force you to make decisions. That ability and willingness to choose your moment when it’s most advantageous to you can let you get significantly more than you pay for in the transaction.
- If you are flexible and willing to go wherever the bargains are, you can save tremendous amounts of money. This doesn’t mean necessarily giving up what you want but, rather, being aware of which things are really deal-breakers. One of the things I would have enjoyed was a wooden steering wheel because our old model had one and I liked how it looked and felt. However, to get it with all of the other options, I’d have had to order a new Jaguar entirely rather than picking one off the lot, which would have resulted in paying probably $25,000 or more in addition to what we paid by the time most things were said and done due to the deal we negotiated. No thank you. I’d rather have more capital to invest because no steering wheel on the planet is worth that kind of money. I’d have been more likely to buy shares of something and give them away to younger family members than do that.
- Don’t let people tell you what you should like. We were open to almost anything and everything. We looked at everything from Kia and Ford to Maserati and Mercedes. For the utility trade off, I gladly would have chosen a mid-tier Ford Explorer over a top-of-the-line Maserati because, despite loving the exterior of the latter, I didn’t like the interior. Neither did Aaron. (Though, if that ever changes and the interior matches the exterior, I could see being tempted. The outside of those cars are beautiful to both of us.) The cost simply wouldn’t have been worth it. Know yourself. Focus on that sweet spot where the cost-benefit lines meet and don’t let peer pressure influence you. If you want to bicycle to work rather than drive and, instead, use your money to take a couple of extra vacations a year or to collect original mint condition comic books, do it. There are no rules. It’s your life. The trick is making sure the decisions are intelligent when compared to your stated goals; e.g., if a 25-year old making $60,000 a year said they wanted financial independence and bought a car like this one, that’s a foolish way to behave as it’s self-defeating. It would be a dumb. Yet, if you develop and own hotels, are 45 years old, and make $1,200,000 a year, it’s a non-event over the period during which you’ll be driving the vehicle.
- I am thoroughly convinced, as I’ve written many times in the past, that those of us who had to make everything ourselves get a permanent happiness boost when we actually outlay capital compared to those who didn’t the same way certain characters in video games have stronger starting base stats. We’ll always appreciate it. There’s a contrast principle in our head; in this case, it’s knowing what it is like to be shivering in the cold as you see your breath and the car shakes around you because you’d rather buy more shares of AutoZone or Berkshire Hathaway or whatever it is that interests you at the moment than you would buy a new car. It’s also a physical manifestation of intelligent behavior; a real-world example of how prudent decisions, and trying to look for intelligent things to do, is not just an academic activity that makes numbers grow on a page or spreadsheet. Those numbers are real purchasing power than can be exchanged for tangible goods and services. That’s something I’ve always needed to be reminded about because, all else equal, I almost always prefer to buy more ownership of things than stuff. In fact, when we were driving off the lot, the dealership had placed a bottle of Jaguar-engraved red wine in a gift box in the back seat. Aaron looked over and joked – but at the same time was completely serious – “They should have made it a share of Coca-Cola. That really would have sold the experience.”
- We worry about our future kids because, as we grow older and our opportunity trade-offs modify due to a combination of coming closer to mortality based on average life expectancy and our personal net worth expanding over time, we’re likely to loosen the purse strings somewhat. That means our children, by the time they are in their teenage years, are probably not going to have any memory whatsoever of what our life was like; the journey, the sacrifices, the days where all you get is 3 hours of sleep because you’re constantly pouring yourself into your businesses. Trying to find that balance between doing what is right for them by providing them all of the advantages and privileges that can get them ahead in the world while still making sure, to the extent we can, that they turn out to be good human beings with the right values … in the coming years, it’s safe to say this is going to be something that takes up a lot of late night conversations, essays, and thought time.
- One thing I like doing is following the Alexander Hamilton strategy of tying specific income streams to specific purchases. For example, I mentioned our copyright income earlier and that is because Aaron and I tend to pay for nearly all of our personal household expenditures out of our copyright income so we never have to spend the earnings of our private businesses or investments. There may be times we make exceptions but it strikes us an intelligent way to behave.
As I’ve gotten older, I do understand, at least to some degree, why some men and women love cars so much. I don’t think they’ll ever tempt me as much as a blue chip stock or an attractive piece of real estate but I can at least appreciate the passion they have for them.
Reader Comments (35)
Comments are presented chronologically, with replies indented beneath the comments to which they respond.
Jeff
December 5, 2016
Given the recent pull back I'm surprised the question wasn't “Would you rather have this or more shares of Nestle?"
Brendan
December 5, 2016
Replying to Jeff
Or UL or DEO...but it's also due to a strong dollar, but then again, NSRGY, DEO and UL do a lot of business in dollars, and if your time horizon is 30-35 years (like me), it's awfully hard not to feel like a kid in a candy shop.
Brendan
December 5, 2016
That is a gorgeous car. Whew. I really enjoyed this post because it wonderfully explains the line between frugal and cheap, and the optimization of capital allocation and I've always admired those traits in you from your writings. Recently we were considering a newer car and ultimately shelved the idea until 2018 for various reasons, but probably the biggest was my sadness over how many shares in my direct purchase plans I'd miss out on buying over the next several years. I ultimately decided to maximize my utility cycling, which I already do, but I get lazy and drive far more than I really need to. So, after a little inspiration from Pete over at the Mr. Money Mustache blog, I blew 700 bucks on converting my road bike into a ebike which allows me to go 20 miles on pure battery or up to 50 miles with pedaling, and that in turn gives me very little excuse to not bike to my various extracurricular activities (no commuting since I work remotely from home) utilizing the almost rain-free Las Vegas climate in combination with some really great, safe, bicycling infrastructure. Ironically, more frequent cycling to my various extracurricular activities led to some of my friends thinking that we were struggling financially, never mind my fancy new ebike setup on an already nice road bike, but they couldn't fathom not driving even though most of us bike for fun and this particular group meets up weekly for trail runs where we literally run 5-10 miles up small mountains. I simply said I truly enjoy biking, really don't enjoy urban driving (and I don't), and that seemed to alleviate their concerns. Plus I don't mind the stealth wealth component of all this since in Vegas, there are no shortage of gambling addicts looking for easy targets.
Joshua Kennon
December 27, 2016
Replying to Brendan
I love the idea of bicycling; environmentally, health-wise, to save money. Unfortunately, where we live, while it would be possible if we were to really commit to it, it'd be a major hardship as almost nothing is designed or organized to accommodate anything other than cars. The weather would also be a problem because it can get down to negative windchill temperatures and the roads become almost impassable due to ice. Still, I definitely see the appeal in the right conditions! (There's actually some really interesting sociological work arguing that a lot of America's cultural problems are caused or in some way exacerbated by the fact most municipalities have arranged their entire infrastructure around individuals driving individual cars.)
joe pierson
December 5, 2016
Every time I look at cars I always look at convertibles to full size pick-ups, but always end up convincing myself to buy a sedan. As some point I like to try something different, but a F150 is just not me! White is my favorite color though, gorgeous car!
Joshua Kennon
December 27, 2016
Replying to joe pierson
Thanks! We love it. As for F150s... I understand what you're saying. I definitely wouldn't want one living in a place like New York or California but, in this part of the country, there is a certain appeal to a really, really nice pickup truck. My grandfathers had trucks. My dad has trucks. My brother has a truck. Sometimes, you just want to put on a pair of blue jeans and sneakers, go to Home Depot, buy some supplies, and go home to work on your project. Though, that's probably my Midwestern upbringing talking. I can remember driving with my grandpa in his pickup truck when I couldn't have been more than 4 or 5 years old to get chocolate long-john donuts at the crack of dawn back when the doughnut shops were independently owned and made them fresh; being in the truck bed with my siblings as we bounced down gravel roads - a safety violation that would result in a ticket or jail time today if something happened. Heck, one of my aunts once let me drive a pickup truck when I was probably 7 or 8 years old, her controlling the gas and brake pedals. There are all of these positive, useful associations with them in my mind.
Stephen H
December 5, 2016
Is that an Apple Watch hes wearing?!
Joshua Kennon
December 27, 2016
Replying to Stephen H
Yeah, we ended up getting a couple to keep track of the back-to-back commitments we sometimes have at the new asset management firm since they integrate with the calendar and bring up reminders. The upshot is, the car has an app that lets you turn it on remotely from your Apple watch, including setting the target temperature, so they work great together.
Blair
December 5, 2016
Joshua, can you tell me how you figure the cost of the car itself vs. the ongoing expenses? I would imagine that something like a Maserati would be very expensive over time if it required a specialist mechanic, even if you got a very low price for the car. For your new Jaguar, it seems like you got a great deal by getting the lower price for the car and the 5-year warranty.
Last summer I had a look at buying my grandma's Civic that she no longer needed, and I ended up figuring that for a vehicle costing around, say, $20,000, five thousand dollars one way or another doesn't make a huge difference over time because the purchase price isn't a large portion of the total cost of ownership. I'm sure the math varies for more expensive cars. For me, the decision tree was a simple one: buy a used $10k car and commit to a bunch of new expenses, or keep riding a bike with the option to buy a car at any time, and keep accumulating cash to put to work in the meantime. When I added the hours I would spend working to pay for a car to my hypothetical commute time by car, bicycling ended up being a faster, cheaper way to get around.
Joshua Kennon
December 27, 2016
Replying to Blair
Great question! The cost of the car consists of the actual outlay for the car itself, the taxes and fees associated with buying the car, the on-going property taxes of the car, the insurance premiums to cover the car, a reasonable maintenance and repair reserve, and the cost of fuel. Aaron and I tend to buy cars like fixed-income investments in that we don't plan on trading them but, rather, holding to maturity. That is, we assume that the total outlay is a loss (little to no salvage, resell, or trade-in value with whatever we get being icing on the cake) and then, if it's worth analyzing, try to come up with a rough estimation of the annual figure for each of those items. In cases where there is a warranty, obviously that figure for maintenance is $0, $0, $0, $0, $0 for the first five years or 60,000 miles which, if the latter case, you'd need to estimate in what year it went into effect so you could begin putting aside reserves. Though not always the case, it's usually safe to assume that, absent a warranty, maintenance on a new automobile might run run 2.5% to 4% of the MSRP per annum so even if you aren't spending it in any given year, putting that cash aside will cover a larger upcoming repair that is necessary.
The actual outlays themselves will come in lump sums but spread out over the cost of ownership period, that tends to be safe. Sometimes, if it is a major model, a research source like Edmunds will have maintenance estimates for the first five years, which can be helpful. For example, looking at a 2017 Toyota Corolla, it estimates maintenance costs on a $18,011 car to be $41 in year 1, $422 in year 2, $326 in year 3, $824 in year 4, and $1,342 in year 5 for a total of $2,955 in those first five years. You reach a point where the repair costs begin to level out and some of the increased maintenance costs are offset by the decreased insurance coverage premiums. Some of it is experience, too. For example, we used a small owner-operated garage for most of our maintenance and they were very, very fair on pricing whereas the major dealership in our area charged a lot more. Some people are capable of doing basic repairs themselves and so can factor that into the figures, too, if they desire.
The best thing to do, in my opinion, is to only buy a car where the maintenance projections couldn't have an influence on your standard of living in any meaningful sense. If the difference between a 2.5% and a 4.0% annual reserve estimate is going to cut into your lifestyle, don't risk it.
Gilvus
December 5, 2016
Have you named it yet? You can't not name a motor vehicle. My suggestions to get the ball rolling:
- Kitty Kat Bar
- White Panther
- Feline Felicity
- Bianca
- Kennon Cruiser (when you drive it)
- Green's Machine (when Aaron drives it)
- Meow Mech
Just imagine the jaguar's engine purring softly as you stroke the hood, whispering "good kitty."
Steve Roberts
December 6, 2016
Replying to Gilvus
Green Machine gets my vote.
Joe (arebelspy)
December 5, 2016
When I saw the blog post title, I was really hoping it would be new car, because new kid is on this way. This teased it. "One of those reasons, I’ll explain in a future post and involves us accelerating our timeline to leave Missouri for greener pastures, pulling up the drawbridge behind us." Maybe I'm overly sensitive to the idea--as my wife and I had our fist child this year, and parenthood is amazing--and way jumping the gun on it, but I just can't wait for you and Aaron to be able to experience it. I loved the idea, while reading this post, that this will be the car your kids grow up knowing. 🙂
Joshua Kennon
December 27, 2016
Replying to Joe (arebelspy)
Congratulations to you and your wife! That's awesome! We can't wait, either. We've been talking about how, and to what extent, we will share the journey of becoming parents. I have a feeling it will be a big part of the future. One thing that we do know, Missouri will not be our home when we raise our children. I've thought about sitting down dozens of times to write the reasons but the chilling effect everyone is talking about - I'm not sure how candid I want to be about them even though I trust the existing community wholeheartedly. I have to figure out how to communicate it without triggering a lot of these sub-conscious programs that could cause people to get deeply offended if I were upfront about how we feel. Still, it is what it is so it needs to be written.
I didn't realize how real biological clocks were for men, though. This Christmas, I was shopping for Aaron and suddenly woke up like I had been in a day dream after realizing that had spent 20 minutes looking at Burberry coats for little boys and girls, thinking about what we would name our kids and how we would raise them; what they would look like, what kind of people they might turn out to be. I completely lost track of time and I don't know when or how this started exactly but it is powerful. It's like there's a deeply rooted program hidden our DNA that suddenly activated itself and said, "Yep! Time to go to work!".
Brad Spencer
December 6, 2016
I really loved this post.
I miss you posting so much and it's cool to see you and Aaron enjoying the fruits of your labor (but also being so damn savvy about it haha).
All seriousness, I think it's cool that you mentioned that you choose to live off your copyright income so your investments/businesses can be reinvested. I've been working really hard the last year to live the same way. Bit more simple still but fixed a lot of cash leaks and spending too much on depreciating things. Live and learn but it's cool to see where the road will end up here in a year or two now that my business cash flow is going back into acquiring things to build long term income.
Appreciate all your posts...know you're busy with your new firm but I've shared that article on Synthetic Equity DOZENS of times to friends as it changed my entire perspective when I read it about a year or so ago...completely made my life easier. Not to gush but there's been a few articles on here like that (Coca Cola millionaire town up in Northern Florida which I ended up stopping at to refill gas on a road trip haha).
Have a great day and enjoy your new vehicle...it's super nice 🙂
Joshua Kennon
December 27, 2016
Replying to Brad Spencer
That's awesome! Congratulations on making that change! It's a really rewarding - not just financially but emotionally and intellectually - experience when you start shutting off cash leaks and using the money to buy things that produce cash, instead. Our primary economic measuring stick is still the one I developed as a teenager: "How much cash income would flood into my hands each month if I didn't work or only did minimal maintenance work?". My job was to collect things that increased that number without proportionately increasing my effort or time commitment. It equalized everything - private businesses, bonds, certificates of deposit, real estate, stocks. (Due to the way stocks retain a lot of their income, though, our secondary economic measuring stick is how much look-through income we are generating as that will ultimately influence our net worth more than the passive income alone will.)
I miss posting. I can't tell you how many times in the past month I've wanted to go write something but I'll look at my task list and realize my time would be better spent reading another annual report or getting advisory agreements out to clients during the controlled rollout of the new firm. It, and they, have to come first but I'm optimistic that within six months or so, we should be fully up and running in a way that I can get up at the end of a workday and not have to show back up until morning just like most other people in the industry. We're just putting in all of the time and effort upfront, front-loading the pain since we'd rather be done with it. I miss interacting with the community more than anything because there are so many wise, good people here I feel like it's something truly special.
Brad Spencer
December 27, 2016
Replying to Joshua Kennon
Definitely and I get that. I've had to really reduce and change my mindset. I "knew" what I needed to do but just took longer to internalize it I guess.
Keep things simple and get back to basics. I definitely love the "look through" income you mentioned here and also reading it a while ago. Also one thing I've done a lot of research on since reading the blog was comparing the 30 yr treasury yield to earnings yield then tracking it. I think rates will be heading up over time instead of down so that'll be an issue for probably the rest of my life to one degree or another.
Either way, appreciate your efforts and building this firm. It's cool to see it and can't wait to hire you guys here in a year or two. I decided once I saw that then I'd rather focus on creating marketing assets rather than being "ok" at investing and good at marketing...be great at 1 thing then partner/hire out specialists in everything else who share your values.
Simple and always work.
Have a great holiday season buddy and chat soon...thanks for replying to my comment
engineer7006
December 7, 2016
I drove a jag recently at one of their events recently. I was surprised at what they offered at the price point, it was more competitive than much of their competition.
http://www.jaguarusa.com/experience-jaguar/art-of-performance-tour/index.html
It was a fun event too, you act in a little movie complete and insert your footage into a larger movie. I have a better opinion of the brand, but don't need a new car anytime soon.
Joshua Kennon
December 27, 2016
Replying to engineer7006
Jaguar is an interesting case study in turnarounds. Since they were acquired by their present owners years ago, billions of dollars have been pumped into them to bring them up to world-class standards in terms of luxury and the value proposition. The market perception hasn't entirely caught up to the economic and consumer reality, yet, but I suspect it will in the next few years. They're doing some amazing things.
Aaron P.
December 7, 2016
I couldn't help but notice Nobuo Uematsu. I'm curious if a softer classical-based music was your first "go to". It seems a great match for the experience of being surrounded by something so luxurious. I personally love new age, film/video game scores, and classical renditions of modern songs. While they don't get much respect from classically trained musicians, I find them much more approachable.
Connelly Barnes
December 8, 2016
Looks nice. I am still driving the 1995 Ford Escort at age 33.
In terms of comfort and functionality, I prefer the Ford Escort to my parents' newer Mercedes, since I find the cloth seats easier on one's back, and the hatchback is useful for carrying around furniture. In terms of safety newer cars are much better due to side airbags, ABS, proximity braking warnings, etc. I should get a new used car at some point and would look for those safety features, and 4 wheel or all-wheel drive, for safety also.
I do not actually enjoy driving unless it is through beautiful countryside with trees/water/etc, or on some outdoor adventure. So I tend to just minimize the time I spend in cars.
Connelly Barnes
November 21, 2017
Replying to Connelly Barnes
I thought I would comment that in a funny coincidence, my Ford Escort now has no functioning heat or air conditioning. My wife does not appreciate this so I am looking for a new used car.
It turns out the important safety features statistics-wise are ESC, ABS, side head and torso airbags, and snow tires in winter. AWD is also valuable for uphill traction control.
Also in related news I am moving to Seattle. Hope the asset management firm is going well.
PastIsPrologue
December 9, 2016
Excellent. And by only by keeping the previous car for ten years and only having one you are an environmentalist to boot. Bonus!
I appreciate you taking the time to share the mental lattice used to evaluate this purchase compared to other choices.
We have been on a car path where we have been striving (and succeeding) to purchase a car that cost half the purchase prices of our last one (in actual dollars, not inflation adjusted which makes the game tougher) that originally cost more (new) than the previous model we owned. We have been leveraging inefficiency in the car reliability reports that severely affect the resale value of some brands and models. As you can imagine it gets tougher with each time but I suspect we can do it one more time before the curve flattens out.
DP
December 10, 2016
I have specific investments accounts that I use the dividends for to pay my household bills. My internet and phone are paid with dividends from a basket of various communication stocks. I love to compartmentalize some of my investments like that. It gives me measurable goals to build it up to my next expense that needs to be covered. This frees up my working income for other investing opportunities, life and family needs.
Remy Scholtens
December 13, 2016
'We worry about our future kids because, as we grow older and our opportunity trade-offs modify due to a combination of coming closer to mortality based on average life expectancy and our personal net worth expanding over time, we’re likely to loosen the purse strings somewhat.'
As a someday-to-be dad coming from modest upbringings, and a estate planner by occupation, these things are at the forefront of my mind. In that regard you might find 'Preparing Heirs' by Roy Williams and Vic Preisser an interesting read. The book goes in depth about the nuts and bolts of what makes an successful estate transition, basing their research on over 3.000 estate transitions, the majority of them unsuccessful (hence the expression 'shirtsleeves to shirtsleeves in three generations'). I just finished it and found it to be a practical how-to guide, and thought you might benefit from the recommendation.
The gist of it is, is that in most failed transitions the communication between family members breaks down and trust is destroyed, a long time before the actual transition is commenced. Taking with it any chance of duly preparing the heir or heirs in question, or perhaps even worse, heirs paying lip-service whilst biding their time. When the wealth is eventually transitioned, the heirs find themselves more often then not unprepared to cope with the demands of a vast estate and without a mentor to guide them.
https://www.amazon.com/Preparing-Heirs-Successful-Transition-Family/dp/193174131X
david
December 16, 2016
On a related note regarding children and family planning, I have been considering the opportunity costs that sometimes are forgotten regarding age of the parents at a childs date of birth. While I would love to be wealthy enough to provide my child with the best upbringing possible, there is a very real opportunity cost where you literally lose years that could have been spent with your children or grandkids. Which is better? A fully funded college plan or seeing your kids for 46 years of life instead of of 36. My father had me when he was 40. As I see other peers with much younger dads, the shortness of life - and the very real fact that I will probably have less time and memories to share with him - has made my financial saving and investment plans even more urgent along with my investment in memories.
Elton
January 3, 2017
Hey Joshua,
I'm not a car person myself but I do think it's an attractive car. One thing I've noticed is that you haven't really looked at the type of engine (or maybe you just haven't written about it here). Given the expense of ongoing maintenance for internal combustion engines, did you consider buying an electric car? If so, how come you still went for a conventional car?
Interested to hear your thoughts.
Best wishes,
Elton
Eric
January 30, 2017
Replying to Elton
As a long term thinker, how did you pass up a Tesla?
Jim
January 11, 2017
For being so frugal and not all that crazy about cars, you made a heck of a choice!!! Congatulations, it's an amazing vehicle!
Clint
January 31, 2017
First off, congratulations on the new car! Maybe one day I'll be in the market for a new Jaguar, but for now I'm sticking to the buy a used car and drive it 'till the wheels fall off strategy.
Being a guy who grew up in the south, I completely understand what you mean about the allure of a pickup. Mental models at work in advertising :). Even when I know it's happening, and all logic points to "I don't need a truck," there's the ever present tug of my emotional decision making side that tries to convince me otherwise.
Thanks to you, I have the tools to sit down, weigh the opportunity cost of a new silverado or F-150 vs investing the difference between it and a more modest used car, have a small panic attack upon realizing "this truck will cost me more than 6 months tacked on to my working career!" And then sleep easy because of another data driven decision!
Thanks Josh, and I'm glad to see you back writing!
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February 1, 2017
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February 2, 2017
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Steve Roberts
May 30, 2017
I noticed that the picture on the homepage has been updated to the Newport Coast arch in Newport Beach, CA. Does that mean that they have moved?
As I post this, I feel like a stalker.....
Steven
July 12, 2017
Replying to Steve Roberts
I so know what you mean! I hope the guys are ok.