4x4ord wrote:
wowens79 wrote:
Rule of thumb on how much to tie up in vehicles from Dave Ramsey, is that no more than half your annual income should be tied up in things with wheels or motors. So if you make $100k only have 50k worth of cars, campers, and boats. Paying cash works fine for me, and keeps me from swapping vehicles every few years, writing a check for $50k is much more painful than signing for a payment for go up $50.
Probably good advice although I think it would be likely that few of us on this forum live by that rule. I believe people who manage their money well can save for what matters to them. I’d like to know if Dave has a rule of thumb for the maximum percentage of a persons net worth that he recommends be tied up in things with wheels or motors?
He recommends not buying new until you have a net worth of $1million, because of the depreciation, lots of great used vehicles that are a few years old out there. I have not heard him give a percentage of net worth to have tied up. He does often tell people that have built up a large net worth to go get what they want.
We've lived his guidance for the last close to 15-16 years, and it was painful at first, but over the years there is so much less stress, and we have seen our savings and networth grow exponentially. We haven't had a payment on anything other than the house since 2006. What we used to spend on vehicle payments goes straight to a vehicle fund for the next one.
