Can I Buy a $225K McLaren?

[Music] brought to you by the every dooll app start budgeting for free today so I'm looking to purchase a McLaren 600 LT spider uh the car is2 that's just a couple hundred grand good for you thank you thank you but it's probably going to be the biggest purchase of my life next to the house uh that I live in can I tell can I tell you something hilarious I'm currently negotiating with James Childs over like a 98 uh 4 run like literally he just stuck his head into talk about it so go ahead with your McLaren purchase Tyler yeah so I really I mean I'm just looking for some professional advice here on the purchase because obviously it's a it's a pretty hefty price tag um I think I'm in a good financial position to afford the car what's the cost I wanted to turn to some experts uh the cost is 223,000 wow wow I just don't even know how to act okay cool I'm going to act really nonchalant cool okay cool um what's your net worth it's around 1.4 million right now nice okay looking good um let's find out are you paying cash for the car I can um but I know that there's also benefits with a leasing structure um I own a small tech company so I I also am earning about 5.3% right now on my high yield interest savings account so you know if I should leave some money in there or if I should pay cash for the car I mean if you're calling us the only way I would get this car is if you paid cash for it because you can afford it and it's done and done um I'm assuming that you don't have any other debt laying around that would change my mind here uh I've got $15,000 on another auto loan but that's locked in at 3.5 right now and since my savings account is earning more than that uh did you say you have a 15,000 loan laying around I do why why you you could be totally free I could be totally free and I know that that's what you're big on the the big reason why I'm not is because it's locked in at 3.5 but it be locked in at zero it'd be locked in have you factored in the depreciation you're losing money because you're you're taking a 5% count against your your threo whatever it is but your car is going down in value right and so your calculation you think you're winning and you're not and you're saying based on depreciation only no I'm saying number one you're not because there's a psychology to this and and and I know that nobody wants to factor that in but part two is yeah the car is worth less money every day you drive it and you're and you keep saying you're locked in and I keep going yeah that's the problem you're locked in no matter what happens to your finances no matter what this car bottoms out at you're still paying that same amount of money across the board dude I I'm just telling you what I do in my house I would pay it off right this second you you're a millionaire you have a $50,000 card what are you doing well let's keep talking because I want to know more I want to know what's your income every year so I'm on salary with my company for about 110 a year and then I pull a bonus that's between about 90 and 120 a year okay how well we do okay so that puts you at about 200,000 a year the it's not looking good I'm just letting know right now Tyler it's not looking good for you let's keep let's keep rolling out the numbers tell us about your home so that's uh Lakefront condo um I I visit in Cleveland with some family it's fully owned and it's about $300,000 is be a PR value that's what it's worth and it's fully fully owned what what other properties do you have any other properties that have mortgages nope nope it's fully on that's the only property okay so it's really just this $115,000 car and then between the the property and your other Investments you're at 1.4 million net worth but your income is 200,000 yeah you could say 200 yep and I'm maxing out the 401K maxing out the IRA money and savings I think you're doing really really really really really really well but here's just a couple of rule of thumbs I have a feeling that you're going to go and and do what you want to do but let me just give you some um just food for thought here typically we would say if you are a net you know if you're a baby sips millionaire your net worth is a million dollars or more you have the ability to buy a brand new vehicle outright like at that point you've done well enough that if you spend the right amount you should put be able to put that money in a pile and burn it to the ground and your heart rate shouldn't change right but then there's another parameter to that where we say okay but it shouldn't be any more than half of your annual salary and if you do the McLaren you are at more than your annual salary so if you said hey I want to buy a $100,000 car outright or I want to buy you know even if you said it was like 105 or 120 I'd probably be like yeah let let's do it but I really do think because of your annual salary I think that this is too much car for you I think if we took that $223 and I I you know did a Wy coyote and I put some Dynamite on it and blew it up in the middle of the desert I think that you would start sweating yeah I I know what you mean which you're right absolutely um so I don't think it's opinion I mean it's my opinion and and and it is mine but I don't think you're quite I wouldn't do it if I were in your shoes yeah can I ask you like if somebody called and they made 60 Grand a year and they they had a paid for a condo and they said they wanted to buy a $60,000 car I would say please don't do that because you're putting yourself you're putting yourself at a pretty significant financial risk what is it about this 200 a quar of a million dollar car what is it about this car that's that's that's got you got got you by the guts and I think that's going to be the the game-changing question hopefully is that they only made 345 of these cars um they're an extremely limited production so it's rare and it's it's pretty much being considered a collector's item at this point and I I think it will maintain its value or if not appreciate over time because obviously cars at this calber are depreciating rocks most of the time is it a p there's no denying that uh no I no that'd be a million dollar car man I wish okay which one do you have because because I'm just doing a cursory look here and it said outside of the P1 McLaren are losing 30% of their they depreciate pretty quick you know what I I won't argue with you you know I drive I drive an old truck so you I'm clearly biased um I'm clearly buys here like I just I just don't put money in depreciating assets if you think it will go up I I just can't imagine spending a whole year salary well there's a part of this scale though let's be honest there's let's go back to that you know half of your yearly salary there's a part of that equation that if your net worth were a certain amount I probably I throw that I Jade would throw that out the window um so you can hold me to that I don't at 1.4 and knowing that if you were pulling out of this investment tape to make that happen and make you go down to 1.2 I just don't feel comfortable with that if you had called me and said hey my net worth is even 3 million I might be like okay yeah all right or what's your cash position how much cash do you have in the bank um in the bank right now I've got about 350,000 and that's aside from the 1.4 million uh that's a part of the 1.4 a l the 1.4 is obviously the condo that I own and then the e yeah I'm the soul owner my if I'm if I'm you if I if I woke up in your shoes and I loved cars the way you did I I feel like it's too soon I'm still sticking to that 50% rule um if my net worth were higher I'd probably reconsider so do with that what you will I want to try to convince you to get a nice new Highlander stop he's not getting a Highlander John get a Highlander I'm not even getting a Highlander John create your free every dooll budget today the simplest way to budget for your life