Why I Ended Up Buying A $120,000 Tesla X
This is an update to my previous post: Should I Buy a Tesla X?
If you haven’t already done so, please read this previous post before you read this one, so that it makes more sense!
So I did it: I bought the Tesla. And here’s why:
I’m Tired of Penny-Pinching
I mentioned in my previous article (link above), that I’ve lived 31 years on this earth as a penny-pinching frugal. This kind of “scarce” mindset is from growing up in a missionary/pastor household.
And if you’ve been following me for a while, you know that I immigrated to the US in 2004, with just $500 to my name. Because I don’t come from “old money”, it was always hard to spend any of the money I’ve accumulated.
But when am I ever going to use my hard-earned money? When is enough enough? When I’m 90 years old? What’s the point? Be the richest guy in the graveyard? No thank you.
I’ve already revealed that I had $1.1 million; well more like $1.2 million ($1,200,000) and I’m 31 years old. So I spend $0.12 million ($120,000) of that money. We’re going to be ok; we won’t go broke anytime soon.
I Have the Liquid Cash And Passive Income
In my previous article (Here Are The Top 16 Financial Mistakes Everyone’s Making), my rule for car-buying is: spend no more than 10-20% of your annual salary…until you have a big enough money snowball that can pay for the car so that you’re not using your principal.
So in other words, front-load all of the sweat equity upfront. Be super frugal with your money, upfront. Spend all of your money, every penny you can muster, in buying assets that product income for you. And continue working to grow that money snowball.
When your assets get to a point where they’re throwing out enough money to support a more expensive car, then you’re finally ready to splurge.
In my situation, I have the cash outlay to buy a brand new Lamborghini Aventador for $450,000 in cash, if I wanted do.
I made approximately $150,000 with my equity position in the markets (mostly from my Emerging Markets allocation). I made roughly the same amount last year. And the year before that. And the year before that! And this isn’t even my job, or my side hustle.
But I’m still working on my money snowball. I’m not done.
So until I have a big enough money snowball, the Tesla X is a compromise. You should work on your snowball as well.
Related: The Money Snowball Effect
The Tesla X Ranks As The #1 Safest SUV In The World
The Tesla X ranks as the #1 safest SUV in the world, by a huge margin.
Nothing else comes close to it. And safety is a big deal when you have a family.
The majority of vehicle-related deaths comes from the car rolling over.
Teslas have heavy thousand+ lb batteries at the bottom of the vehicle which makes the cars’ center of gravity very stable. And because they don’t need all of the engine components in the front of the car, there’s a lot more crumple surface to offset impacts in the event of a collision.
And lastly, the autonomous driving and 8 cameras on the vehicle takes it to a whole different level of safety.
According to Tesla, when the cars are driven in fully autonomous mode they are roughly twice as safe as a human driver driving the car.
That’s a 100% increase!!
I Want to Support Elon Musk and His Endeavors
We need to expedite our progress towards clean energy so that we can wean ourselves from the reliance on fossil fuels. And I’m saying this even though I have ownership stake (equity) in fossil fuel companies! Maybe I’ll write about hedging in a future post.
I’m putting my money where my mouth is. I am a big Elon advocate: Tesla, the Boring Company (hyperloop), colonizing Mars and becoming a “inter-planetary species”, exploring the vast unknown.
These are all worthy endeavors that are worth supporting.
This is Not The Best Financially Astute Decision
I want to be very clear that I am not proposing that everyone go out and buy expensive cars. From strictly a monetary and fiscal standpoint, this isn’t the smartest decision I’ve made. And I know this.
So if that’s what you’re getting from this article, then you didn’t read above.
So make sure to not do yourself a disservice by misinterpreting what I’m saying. So before you leave this page, make sure you re-read and fully understand why my purchase makes sense, in MY situation (scroll above to paragraph title: “I have the Liquid Cash And Passive Income”). Everyone’s financial situation is different.
How familiar are you with Elon Musk’s work towards sustainable energy and his companies? Would you ever buy a Tesla or a luxury vehicle? Why or why not? Share in the comments below!