# Stupid question of the day.... am I a millionaire?



## PennyWise.... (Aug 24, 2013)

I don't know how to ask this without sounding like a douchebag, so I'm just gonna do it anyway.

I come from humble beginnings. We were on welfare when I was a kid... I had to have a job in highschool and all through university... I scrimped and saved like nobody's business. I had one job after university that didn't last long before I realized I didn't want to work for someone else. I've been self employed since. I don't make a ton, but I save well.

I've been obsessing recently over the Tesla Model S (a car, for those that don't know). My wife joked that I could buy one once we get a million dollars, obviously thinking we'd never get there.

Now the funny timing is that a couple days ago, Tesla invited me for a test drive at a recent event they had in my town, so I went ahead and drove it. I was looking for flaws so I could stop obsessing... but alas, I want more even more now.

My wife brought up that million dollar thing again.

So I got out the spreadsheet. Did some figuring. By my math, I come to roughly $1,030,000.

She doesn't buy it.

How is it defined? I'm serious. No, really.

I took my cash + investments (current market value) + realistic house value (I think I was honest and even low-balled it a bit) + converted US dollar values to CAD @ 1.30, then minused our mortgage and the only other debt we have (current credit card). Am I missing anything? Should I not be counting the house? I'm way off if that's the case. Or is it not fair to use the current exchange rate in my favor and/or the "on paper" values of the investments?

Dude, where's my car?


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## none (Jan 15, 2013)

Yup. You win. Go buy your car.


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## uptoolate (Oct 9, 2011)

Yes you are but it is doubtful that you can really afford a 100K+ car even if it is very reliable and low maintenance. I think they are amazing cars, as does Consumer Reports, and an hour drive in a friend's confirmed my beliefs. Fabulous car! My friend is high income but not yet wealthy and if he keeps consuming things like Tesla's he's going to take quite a while to become wealthy. Personally, I'd be waiting for the 2 million mark although I have never been able to bring myself to buy one. Perhaps after the kids are all gone and I'm living a warmer climate!


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## Davis (Nov 11, 2014)

Congratulations - you're a millionaire. Go out and celebrate your achievement. Take your wife out for a nice meal. You can afford to buy the Teska. But ask yourself if you want to put 10% of what you've built up into something that will only depreciate. As uptoolate suggests, maybe you want to hold off until you've paid off the mortgage, and socked away another stack of money in investments. After all, a Tesla is going to cost you a fair bit more in insurance and maintenance than the Corolla.


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## brad (May 22, 2009)

Being a millionaire today is not the same thing as being a millionaire was 20 years ago. There are more than 320,000 millionaires in Canada, and about 9.6 million millionaires in the United States.

Having a net worth of $1 million or more doesn't mean much in terms of your ability to afford a purchase. The deciding factor in "can I afford it" probably shouldn't be your net worth, it should be your net annual income and your fixed expenses.


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## janus10 (Nov 7, 2013)

Actually, since you are married, it is you TWO who, as a couple, are millionaires. You alone are not. 

Also, I've never supported the idea that you don't count your net home equity towards net worth. If either you or your wife have DBP you can also factor that into your NW as some people do. Because I have so many frequent flyer points I add those to my NW. I just take whatever useful gift cards I can by with them and use that as my conversion metric.

Maybe you can't, or even shouldn't, buy a Tesla. Perhaps there is an exotic rental company that could rent it to you for the weekend? I wonder if you have to return it full(ly charged).


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## Guban (Jul 5, 2011)

Yes, according to your calculations, you are a millionaire. I will point out that if you bought the car, because of depreciation, you won't be!

Seriously though, talk to your wife. Look at your finances and your goals. What is money for? If not spending, after all.


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## RBull (Jan 20, 2013)

Congratulations on the net worth milestone. 

I am a car enthusiast and I agree the Tesla S is a fine car. 

However IMO your wife's benchmark was flippantly set way too low and shouldn't even include your home asset for affordability purposes. Your disposable income is probably a bigger factor in this case.


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## tkirk62 (Jul 1, 2015)

I love the Tesla and understand the desire. If I were you I would start saving towards it now if you want to. Don't sell anything, just now some of the money you were devoting to investments, save it for the purpose of obtaining a Tesla in the future. The cars will get cheaper, the technology will get better, and you won't be sacrificing all the hard work you have put in up to this point by buying a depreciating asset. I don't know your savings rate but it seems like you will be able to buy it in cash within six years.

Another option to consider is getting a HELOC with these crazy low rates, buy the car and then devote a lot of your future savings to attacking that debt. Normally I wouldn't suggest borrowing for such an expensive car but the combination of low rates, your good financial position now and seemingly a good ability to pay lots towards the debt in the future makes it seem like a decent option.


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## 1980z28 (Mar 4, 2010)

PennyWise....;752322
Dude said:


> I believe that your car will be a great investment,,,enjoy,don`t speed


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## cainvest (May 1, 2013)

Did you deduct your projected withdrawal tax percentage for the RRSP holdings in your calculations?


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## BoringInvestor (Sep 12, 2013)

cainvest said:


> Did you deduct your projected withdrawal tax percentage for the RRSP holdings in your calculations?


Oh, that's a good one. It's a deferred tax liability.
You could also deduct sales costs involved with selling your home, and any taxes due if you hold equities in a non-registered account.

All that said - congrats on the net worth!


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## birdman (Feb 12, 2013)

Sorry, you are not as half of the assets I suggest belong to your wife and possibly 100% of the mtge (speaking strictly from a legal perspective here) is your responsibility. Pay off your debts and then get to 2 million and you have it.


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## tygrus (Mar 13, 2012)

Well I think you are looking for the definition of rich and that is 1 million in liquid assets plus $250k/yr combined salary. Your house shouldn't count then. In fact no real estate should causes it illiquid.

But if you are obsessing over a car, then go check your net worth, that is flawed thinking. $100k depreciating asset is never a good move but I understand the want to enjoy fruits of your labour. There is a sub $50k telsa coming out later this year I think.


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## wendi1 (Oct 2, 2013)

The problem is that the car will make you happy only briefly.

After a few weeks, you will not even notice its general and specific awesomeness.


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## CalgaryPotato (Mar 7, 2015)

Yes you are a millionaire. But can you afford the car? It depends on so many things. How much of your net worth is liquid and how much is tied up in your house? How old are you and your wife? If you are getting close to retirement age then while you may sound rich, you probably have less money than you should for retirement. If you are younger, are you planning on having kids still? Because that can change your finances in many ways.

But really only you can decide how you want to prioritize your money. For me I'd prefer to travel with my family during my vacation time rather than spending it all on a car. But if the car is your dream then that is what you should work towards. You should write up a financial plan on how over the next 10-15 years you'll cut/make $100,000 to cover the cost of the car.


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## tygrus (Mar 13, 2012)

One thing rich people know is the utility of money. They know a $30k car does exactly the same thing as a $100k car. To me a car is just a reliable way to get from A to B now. Don't really care if its flashy or fancy anymore. When you are 40 your priorities change. To me, my priority is never having to work again and I will drive a beater to make sure that doesn't happen.


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## PennyWise.... (Aug 24, 2013)

Wow, so many thoughtful responses! I'll pick and choose a few to respond to as there was quite a bit of overlap, but I read and appreciated them all!



none said:


> Yup. You win. Go buy your car.


First to respond = answer I wanted to hear = I ignore the others! Lol. J/k, but thanks for that.



brad said:


> Being a millionaire today is not the same thing as being a millionaire was 20 years ago. There are more than 320,000 millionaires in Canada, and about 9.6 million millionaires in the United States.


Yeah, thanks for pointing out that I'm not special. That isn't at all a factor in my thought process. How wealthy, or not, I am in comparison to someone else? I could give a rat's *** now just as I could when I was on welfare. They are them, I am me. If I wanted to chase someone else's goals, I'd never get there. I'd be a billionaire and you'd say, "well yeah, join the club... so and so had more".



janus10 said:


> Actually, since you are married, it is you TWO who, as a couple, are millionaires. You alone are not.


I understand's my wife value in the equation. I could never have gotten to where I am without her and ANY time I say "I" (including the start of this sentence), I mean "we"... absolutely. She set the goal of $1M, not me. And it was a joke goal at that, so I'm not REALLY defining whether or not to get this car based on her definition of "millionaire". She's actually fiercely independent when it comes to finances. She keeps "her" money in her bank account and "my" money is in my bank account. So she doesn't feel she has any say in this decision. I'm actually finding that a bit frustrating because I wish she'd give me more input on the subject. She sees it as my money, my decision. I don't. If we ever had a divorce, there'd be no need for lawyers from my perspective... she absolutely deserves her half. I understand what she sacrificed and I know how she supported us financially while I got my business going. It was also her real estate decision early on that gave us the head start I needed to risk some money on my first business. So I have absolutely NO disagreement that "we" are the the millionaires, rather than "I". But we're so solid that I use the term rather interchangeably.



Guban said:


> Yes, according to your calculations, you are a millionaire. I will point out that if you bought the car, because of depreciation, you won't be!
> 
> Seriously though, talk to your wife. Look at your finances and your goals. What is money for? If not spending, after all.


YOLO, right? All my brains tell me to ignore this impulse. My gut tells me to buy it.



tkirk62 said:


> I love the Tesla and understand the desire. If I were you I would start saving towards it now if you want to. Don't sell anything, just now some of the money you were devoting to investments, save it for the purpose of obtaining a Tesla in the future. The cars will get cheaper, the technology will get better, and you won't be sacrificing all the hard work you have put in up to this point by buying a depreciating asset. I don't know your savings rate but it seems like you will be able to buy it in cash within six years.
> 
> Another option to consider is getting a HELOC with these crazy low rates, buy the car and then devote a lot of your future savings to attacking that debt. Normally I wouldn't suggest borrowing for such an expensive car but the combination of low rates, your good financial position now and seemingly a good ability to pay lots towards the debt in the future makes it seem like a decent option.


I agree with your take except the debt. I personally have only had one car loan in my life. $3500 when I was 16 to get my beloved 1984 Honda CRX (that was in 1992). That "crushing" debt payment was an eye opener. That's when I understood how interest worked. When I realized that was for a depreciating asset... I said never again. Every car I've owned since has been saved for first and paid with cash. I consider this no different. The trick is defining "ground zero" for the savings. Did I start $125k ago and I'm there now? I do I do as you suggest and start now. *The only reason for me to act quickly*, besides the fact I really want it, is the exchange rate. With the spike in the US dollar relative to CAD, I just earned an extra $90k that could be gone just as quickly. But I have that (or not) irrespective of this purchase. The more salient point is that the car, currently, hasn't been adjusted for this spike. The car right now is priced with a $1.15 CAD to USD rate. So in a way... it is "on sale"  They've been fairly quick to adjust before, so I imagine the price is going up soon.



cainvest said:


> Did you deduct your projected withdrawal tax percentage for the RRSP holdings in your calculations?


I did not, but I have very little in RRSP. Good point though - I have to deduct about $60k so I have a bit to go.



tygrus said:


> Well I think you are looking for the definition of rich and that is 1 million in liquid assets plus $250k/yr combined salary. Your house shouldn't count then. In fact no real estate should causes it illiquid.
> 
> But if you are obsessing over a car, then go check your net worth, that is flawed thinking. $100k depreciating asset is never a good move but I understand the want to enjoy fruits of your labour. There is a sub $50k telsa coming out later this year I think.


There's a lot wrong with that statement. No, I am not looking for the definition of "rich". I was rich a long time ago. Rich is relative to oneself, not others. I used to want to be rich (when I wasn't). It was my first $40k/yr job that convinced me otherwise. $40k, as we all know, is not "rich" by many definitions in Canada... but I couldn't spend enough to make my account go down. From my frugal upbringing and my constant desire for efficiency... I really don't need much. In fact, my income has never been that high. It is hard to define my income because I've had years where I've paid taxes on half a million, but that's followed by 3 to 5 years of making next to nothing. On average, I'm well under $100k. And my wife is a part time teacher. But we're cheap. We don't drink, don't smoke, don't go out much... we don't have car payments, we don't buy the quads and dirtbikes and annual all inclusive vacations. We don't even drink coffee. To me, "rich" was when I had more than I needed, and that happened a long time ago. And no, there isn't a sub-$50k Tesla coming out soon. The Model S is out now, then comes the X next year then if AND ONLY IF, sales go as well as they hope... the Model 3 will be released in probably 3 years time. That is the sub-$50k. Interestingly enough, many Tesla owners will say its actually their "moral obligation" to buy the current model to help this company get to where they need to be to offer a car for the masses. I don't know if I buy that, but I'd much rather support Tesla than a company that profits from raping our natural world and our childrens' futures.



wendi1 said:


> The problem is that the car will make you happy only briefly.
> 
> After a few weeks, you will not even notice its general and specific awesomeness.


A car won't make me happy at all. That's not the point. Sorry I gave that impression, actually. It makes me look very materialistic. I couldn't care one iota about the "status" element of this purchase. Actually, that's not true... I do worry that if I got it, I'd look like that ******* that has to have expensive things. I want this car for what it represents, more than anything. It isn't even about the gas savings for me. I drive so little that I spend less than $50 a month on gas as it is. I think it is an absolutely beautiful car and I love all the technology, so I really really want it for what it is... but mostly, I'd say its for what it represents. But I can't get too caught up in the holier-than-thou justifications, because I'm sure if I put the money into other clean energy directives it would be of better altruistic use.



tygrus said:


> One thing rich people know is the utility of money. They know a $30k car does exactly the same thing as a $100k car. To me a car is just a reliable way to get from A to B now. Don't really care if its flashy or fancy anymore. When you are 40 your priorities change. To me, my priority is never having to work again and I will drive a beater to make sure that doesn't happen.


 Lol.. I've never even owned a $30k car. $30k is a lot for a car! My $27k car was the most I've ever paid (and that was after taxes)... but that car actually earned me half a million, so I can't complain.


And that brings me to one more point. My business... essentially I design aftermarket electronics. For various things, but among them are automotive electronics. I developed a part for my aforementioned car and sold it - directly to owners - and that is where the bulk of my savings came from. There's a chance the Tesla is just an R&D expense  All my products stem from my personal interests.

Back to Brad's point about me not being special. To my mother's ire (who knows I'm special), an over-riding business mantra I've always had is.... "I'm not special". And I mean that. But it isn't as self-deriding as it might sound. What I mean is that "if I want it, a million others do to". The trick is just finding them 

Again, thanks for all the responses.

I'm going to go have a chat with my wife and ask.... ok, probably beg... her to give me a green light or a red light.

(ps. Someone mentioned children. We have a 3yr old. We are both stronger people by not having every advantage handed to us and he'll have that same opportunity for self-growth. So I'm not concerned about leaving a million bucks to him when we die)


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## tenoclock (Jan 23, 2015)

Don't buy a car which is more than 5% of your liquid net worth or 20% of annual gross income. Spending $100K on a car is a very bad idea if you don't have income generating assets that would cover it's cost in less than a year.

I bought a $10,000 car when I was in 3rd year university. It was just a bad decision which I vowed never to repeat again, because the car's cost (at that age and in debt) weighed down on my mind and didn't make me happy. 

I see friends and other acquiantances buying BMW's, Mercs, Lexus, first year they get a job out of Uni and it really makes me cringe. Because as I predicted based on my own experiences, it would not make them any happier, and after a few months, it really didn't.


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## leoc2 (Dec 28, 2010)

If you can wait, the Tesla dealership near San Francisco says they are coming out with less expensive models in the future. I test drove one this past Xmas off of their lot.

http://blog.caranddriver.com/tesla-...r-model-for-2016-or-2017-code-name-blue-star/


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## PennyWise.... (Aug 24, 2013)

That personal rule of yours seems very... arbitrary. It also isn't very complete. Someone who won the lottery can only buy a car if they do so in the year they won the lottery? Or... a retired person not generating any income can't buy a car no matter the price or how much they have in assets?

I'm not saying you're wrong, just that I don't see the universal application of your rule (nor do I see where you came up with it. I mean, why not 2% and 10% or 20% and 40%? Why less than a year and not 6 months? Or 5 years?).

You're also ignoring one element about this type of car in particular... gas savings. It is entirely possible for someone who spends $2000/mo on gas to have a car like this for "free" (or cheap, I didn't do the math). That doesn't apply to me, as my gas expenses are more than reasonable, but my point is your formula ignores specific circumstantial values. If (in some world) the car actually saved more on gas than the car payment was, then it wouldn't matter if the car was $1M it would still be a positive net flow.

But I digress...


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## PennyWise.... (Aug 24, 2013)

leoc2 said:


> If you can wait, the Tesla dealership near San Francisco says they are coming out with less expensive models in the future. I test drove one this past Xmas off of their lot.
> 
> http://blog.caranddriver.com/tesla-...r-model-for-2016-or-2017-code-name-blue-star/


Note the date of that article. 2013. They've since announced the car, called the Model 3 (not sure where blue star came from), and it is still very much an IF more than a WHEN based on the success of the current model S and next year's model X. It is almost certain that it won't be here by 2017. Can I wait? Well sure I can wait. I don't need a car at all. My Honda Fit is perfectly serviceable and meets our current needs. Its not really the point


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## peterk (May 16, 2010)

PennyWise.... said:


> but I'd much rather support Tesla than a company that profits from raping our natural world and our childrens' futures.


Woa now. If you've got children that live in Canada there's a pretty good chance that if they want an above average career they're best bet is to look towards the oil or mining industries!

Remember, Canada has absolutely world class standards for safely and environmentally conscious mining practices (i.e. # 1) There is literally no place better on this globe that respects the way we remove mother nature's raw materials than Canada.


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## tenoclock (Jan 23, 2015)

Ofcourse it's arbitrary and general, I mean there is no law of money (like the law of thermodynamics) which says you should adhere to that. 

A lot of people value big houses, some value nice expensive clothing, and many - like me, like expensive luxury or high tech cars. So do what you are comfortable with, I just gave you a personal answer and you can take away whatever you want from it. For me, if I find that I am questioning whether I can afford something or not and trying to find ways to rationalize that decision, I probably can't afford it.

I agree with the gas savings part, but you should remember than with Tesla, you need to change the battery pack once it gets older after 8 years I dont think its covered by Tesla (it costs somewhere between 10-15 grand USD) So do factor in that cost. And Canadian winter weather takes more of a toll on batteries than warm Cali climate

Finally, I am not suggesting you don't buy the car, you obviously have the money to do it. If it's your dream car, go for it! We all value things differently after all, which is why you will always get different answers from different people


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## PennyWise.... (Aug 24, 2013)

peterk said:


> Woa now. If you've got children that live in Canada there's a pretty good chance that if they want an above average career they're best bet is to look towards the oil or mining industries!
> 
> Remember, Canada has absolutely world class standards for safely and environmentally conscious mining practices (i.e. # 1) There is literally no place better on this globe that respects the way we remove mother nature's raw materials than Canada.


So when Canada rapes, they say thanks and sorry. How polite of us 

I didn't mean for this to become a political discussion, but it is what it is. I don't feel economy, jobs, dollars, etc (for myself, you or either of our children) should come before the world we should feel privileged to be the stewards for. If we quantified the environmental costs of doing such business, it wouldn't be profitable. So yes, absolutely, I would sacrifice my children's ability to work for such a horrendous industry in a heartbeat if I had the ability to make that decision for them and the world. Big tobacco killed a lot of people to line their pockets. Do we say that's OK because a lot of people had good jobs? Those living in the tobacco producing states sure do, but where you live and how you happen to make money shouldn't have any bearing on what is right or wrong. A paid hitman can't possibly justify that murder is OK just because it is profitable for him, even if it puts his kid through college too. My son working in an oil patch just because it pays well only means I didn't teach him how to view the world. I'm not saying Joe Shmo shouldn't look out for #1 and take the job if it is presented. But they shouldn't take the job absolved entirely of guilt either, in my opinion. We all do things we don't exactly respect ourselves for in the morning. Some of us just choose to justify it more than others.


Yesterday I saw some creep with a giant truck that had a quad strapped to the back talking on the cellphone while the monster belched out fumes because he figured the thing should be idling loudly while the a/c is on (but he's outside). He was there when I went into the store, he was there when I got back. Of course he had Alberta plates, but I digress. I actually thought to myself that perhaps buying a Tesla was my responsibility to make up for that jackass. But I can't afford enough Teslas to make up for them all!

But hey, he's justified because he's helping the "economy".

Sigh.

We're all entitled to our opinions, right? Well... only if you respect the hitman's opinion too.


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## GPM (Jan 23, 2015)

If you really want it, buy it! With your back ground, you are likely truly a person who would enjoy a great toy, wether it matters or not. In a way you deserve it. If you can have nice things and reach your retirement goals, then why not have nice things. A lot ot of people are overly concerned about inheritances for kids etc. From an egg head point of view, large inheritances have been shown to decrease value of life for children by robbing them of goals and the thrill of achievement. One warning above was good. Try and rent one for a weekend. I bought a beloved James Bond Z3. Beautiful in its day, sigh. Thought I was the king until I started driving it. I was actually embarrassed, even though the price was right and I was surrounded by F150's that cost more. Rumours of me charging too much at my business as well! Some one crashed into it in a parking lot on purpose and it felt like I was stabbed. I eventually just had to sell it. I have a somewhat similar background, but you started waymharder and achieved more. You do have to live in the moment a bit. You can turn around one day and be disabled. Don't be afraid to chase dreams.


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## peterk (May 16, 2010)

PennyWise.... said:


> So when Canada rapes, they say thanks and sorry. How polite of us
> 
> I didn't mean for this to become a political discussion, but it is what it is. I don't feel economy, jobs, dollars, etc (for myself, you or either of our children) should come before the world we should feel privileged to be the stewards for. * If we quantified the environmental costs of doing such business, it wouldn't be profitable*. So yes, absolutely, I would sacrifice my children's ability to work for such a* horrendous industry *in a heartbeat if I had the ability to make that decision for them and the world. Big tobacco killed a lot of people to line their pockets. Do we say that's OK because a lot of people had good jobs? Those living in the tobacco producing states sure do, but where you live and how you happen to make money shouldn't have any bearing on what is right or wrong. A paid hitman can't possibly justify that murder is OK just because it is profitable for him, even if it puts his kid through college too. *My son working in an oil patch just because it pays well only means I didn't teach him how to view the world.* I'm not saying Joe Shmo shouldn't look out for #1 and take the job if it is presented. But they shouldn't take the job absolved entirely of guilt either, in my opinion. We all do things we don't exactly respect ourselves for in the morning. Some of us just choose to justify it more than others.
> 
> ...


Holy crap. You are on top of the highest horse I have seen around here in a while! You have no clue what you're talking about. This isn't the 19th century anymore with big businesses dumping sludge in the nearest lake... The cost of environmental protection and mitigation is absolutely incurred by all profitable businesses, and is a massive massive expense that often makes them UNPROFITABLE businesses and shut down.

I hope in your teaching of world views to your son you don't forget to include the one where he isn't entitled to sit in a cushy café all day working a life of leisure and living off the taxes of people and businesses who are out there delivering real products to those who need it, and making real money; pontificating about how they are nothing but "horrendous industry" that is "raping Canada". All as you drive by in your exotic electric car filled with exotic metals and acids that all came from a mine, powered by electricity that was made from burning gas or coal or damming a large river valley or nuclear rods sitting in a hopefully stable granite subterranean vault that won't kill us all.

The economy does not belong in quotes. It is very real, not a fairy fantasy construct of the evil corporations that are trying to rape the land and control your life.

All that being said, seems like a pretty sweet car. And if you work hard all your life, you can buy what you've earned without guilt.  I'd prefer if it'd come in a V8, though. :biggrin:


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## BoringInvestor (Sep 12, 2013)

peterk said:


> Holy crap. You are on top of the highest horse I have seen around here in a while! You have no clue what you're talking about. This isn't the 19th century anymore with big businesses dumping sludge in the nearest lake... The cost of environmental protection and mitigation is absolutely incurred by all profitable businesses, and is a massive massive expense that often makes them UNPROFITABLE businesses and shut down.


Some environmental costs are paid, others are externalized.


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## PennyWise.... (Aug 24, 2013)

@GPM, thanks. I'm sorry about your Z3 experience. I hadn't really thought about what my customers might think if they knew I had one. I wonder if their perceptions would change. I know I'm viewed as "one of us" to many of them, because every project starts with a genuine interest in the item [whatever it is] that I'm providing adaptations for. Perhaps "one of us" goes out the window if they knew they funded a purchase like this. While I don't generally care what "other people think"... perceptions do matter.

@peterk. I'm not really sure about the high horse. I don't think money rules. Or rather, I think money shouldn't rule. The economy - in terms of fiat money - very much is a human construct. It isn't "real" at all. You can't touch it. You certainly can't eat it. If money was never conceived, we would still have an economy but, hopefully, one based on a totality equation, not one limited to the benefit of the few for the detriment of the many. I think we'll get there some day. In the meantime, I wish people could just look at total costs, not just dollar costs. You are very right about the rare metals. I never said I wasn't a hypocrite. And I do wonder and worry about that, probably more than most other Tesla dreamers. If everyone switched to electric cars (as they are now), what problems have we shifted to? Are they better? Worse? I can't pretend to know. I remember in university when Mr. Ballard from Ballard Power Systems gave a talk (in case there's people that don't know, they pioneered the concept of the hydrogen fuel cell). I listened to the amazing story that the only emissions would be clear, clean pure water. And that sounds amazing! But... the internal combustion engine was pretty amazing too when the greenhouse gases spewed out were so minuscule. But it wasn't just one engine, was it? And with a billion on the road, we're killing (or, perhaps, according to a recent scientific report... killed) our world. So what would a billion cars dripping out water mean? Ever see Water World (you're forgiven if you haven't - widely regarded as one of the biggest flops Hollywood ever put out). Who knows, right?

The point... we have to try to live our lives in such a way that we're making a positive difference. We might not get it right, but we try. If that means mounting a high horse and publicly espousing what people largely already know about our government and industry... well, so be it. "High horse" tends to imply that I think I'm better. I don't think I'm better. I wish I was better and I hope my son will be.


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## Causalien (Apr 4, 2009)

PennyWise.... said:


> @GPM, thanks. I'm sorry about your Z3 experience. I hadn't really thought about what my customers might think if they knew I had one. I wonder if their perceptions would change. I know I'm viewed as "one of us" to many of them, because every project starts with a genuine interest in the item [whatever it is] that I'm providing adaptations for. Perhaps "one of us" goes out the window if they knew they funded a purchase like this. While I don't generally care what "other people think"... perceptions do matter.
> 
> @peterk. I'm not really sure about the high horse. I don't think money rules. Or rather, I think money shouldn't rule. The economy - in terms of fiat money - very much is a human construct. It isn't "real" at all. You can't touch it. You certainly can't eat it. If money was never conceived, we would still have an economy but, hopefully, one based on a totality equation, not one limited to the benefit of the few for the detriment of the many. I think we'll get there some day. In the meantime, I wish people could just look at total costs, not just dollar costs. You are very right about the rare metals. I never said I wasn't a hypocrite. And I do wonder and worry about that, probably more than most other Tesla dreamers. If everyone switched to electric cars (as they are now), what problems have we shifted to? Are they better? Worse? I can't pretend to know. I remember in university when Mr. Ballard from Ballard Power Systems gave a talk (in case there's people that don't know, they pioneered the concept of the hydrogen fuel cell). I listened to the amazing story that the only emissions would be clear, clean pure water. And that sounds amazing! But... the internal combustion engine was pretty amazing too when the greenhouse gases spewed out were so minuscule. But it wasn't just one engine, was it? And with a billion on the road, we're killing (or, perhaps, according to a recent scientific report... killed) our world. So what would a billion cars dripping out water mean? Ever see Water World (you're forgiven if you haven't - widely regarded as one of the biggest flops Hollywood ever put out). Who knows, right?
> 
> The point... we have to try to live our lives in such a way that we're making a positive difference. We might not get it right, but we try. If that means mounting a high horse and publicly espousing what people largely already know about our government and industry... well, so be it. "High horse" tends to imply that I think I'm better. I don't think I'm better. I wish I was better and I hope my son will be.


Be a millionaire in USD term then you can talk.
Also, discount the house and the mortgage. These two don't factor into the decision.

Whether or not you can afford the upkeep of a Model S depends on your income. The annual ranger fee of $500 and the insurance cost plus the lease payment. Add on the 3G cost.

Most ModelS owners I've met has annual income in excess of $100k USD. Below that it is too much of a burden.

Also, others are right, divide your networth by 2.


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## PennyWise.... (Aug 24, 2013)

Why would I divide my net worth by 2? It is our money, it is our car. If my wife's target (which was arbitrary) was a million, then that's for both of us. Anyway, I never asked for advice on whether or not you guys felt I could afford the car... just the definition of "millionaire". Anyone else agree with Causalien that I should base that definition in US dollars? I know Stephen Harper is trying as hard as he can, but we're not a state yet!

Others here seem to agree that the house and mortgage should factor in. I wasn't sure. You say they shouldn't... why not? 

And I really can't look at my decisions on an income basis. I just don't fit that model. I don't have "an income", in the traditional sense. It varies anywhere from negative $150k to positive $500k in any one year. 

Since you did a little research, I'll address your Tesla-specific comments: The annual ranger fee is at most $500, but you can have it for the bargain basement cost of zero. It is a typical upsell that I'd ignore just as I would any other car brand  The warranty is the warranty whether or not you pay $500 for someone to check it out every year (yes, I confirmed with the area manager that there is no consequence whatsoever. It is a fee to feel important enough to have a guy come out and check it over and that's all). I phoned ICBC and confirmed the insurance cost is only $200 higher than I pay now. That was surprising, really. The 3G cost is provided for free for either 4 or 7 years depending on who you ask. After that, it is an unknown cost and will always be completely optional since you can get updates via wifi and/or tether your own phone to get 3G. "lease payment", as I said, is zero.


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## GPM (Jan 23, 2015)

PennyWise.... said:


> @GPM, thanks. I'm sorry about your Z3 experience. I hadn't really thought about what my customers might think if they knew I had one. I wonder if their perceptions would change...
> 
> Well, it wasn't all bad penny wise. I had quite a bit of fun for a while. When I brought it out, everyone drove it! Staff, family, clients. A real hoot. If it was prescratched, I think I would have done better. Having a dream wounded bothered me. My wife loved it and didn't get any complaints. I was a bit shy I guess, but on a whole I don't worry about others opinions. We were in a small town though, which didn't help. However, as far as perception goes a friend of mine was quite wise. He told me if you are successful, you should look it, or clients will go elsewhere to others they think are. I think there is truth. In that, even as we try and be frugal.


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## CalgaryPotato (Mar 7, 2015)

I think there is a significant difference between being a single person and having a million dollars in assets, vs. having a family of 3 and having a million in assets. I'm not saying it doesn't qualify you as a millionaire. But if you can't see the obvious differences (you need to fund two people's retirement out of your money, you need to pay costs for your child at least up until 18, if you are putting money into an RESP for them, while it may technically still be yours, you'll never be able to use that money) I'm not sure what to say.


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## jaybee (Nov 28, 2014)

PennyWise.... said:


> Anyone else agree with Causalien that I should base that definition in US dollars? I know Stephen Harper is trying as hard as he can, but we're not a state yet!


No, I don't agree. Not if you're living and spending money almost exclusively in Canada. Only you know if you can afford it. If your wife is comfortable with it, go for it!

And congrats BTW!


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## peterk (May 16, 2010)

PennyWise.... said:


> @peterk. I'm not really sure about the high horse. I don't think money rules. Or rather, I think money shouldn't rule. The economy - in terms of fiat money - very much is a human construct. It isn't "real" at all. You can't touch it. You certainly can't eat it. If money was never conceived, we would still have an economy but, hopefully, one based on a totality equation, not one limited to the benefit of the few for the detriment of the many. I think we'll get there some day. In the meantime, I wish people could just look at total costs, not just dollar costs. You are very right about the rare metals. I never said I wasn't a hypocrite. And I do wonder and worry about that, probably more than most other Tesla dreamers. If everyone switched to electric cars (as they are now), what problems have we shifted to? Are they better? Worse? I can't pretend to know. I remember in university when Mr. Ballard from Ballard Power Systems gave a talk (in case there's people that don't know, they pioneered the concept of the hydrogen fuel cell). I listened to the amazing story that the only emissions would be clear, clean pure water. And that sounds amazing! But... the internal combustion engine was pretty amazing too when the greenhouse gases spewed out were so minuscule. But it wasn't just one engine, was it? And with a billion on the road, we're killing (or, perhaps, according to a recent scientific report... killed) our world. So what would a billion cars dripping out water mean? Ever see Water World (you're forgiven if you haven't - widely regarded as one of the biggest flops Hollywood ever put out). Who knows, right?
> 
> The point... we have to try to live our lives in such a way that we're making a positive difference. We might not get it right, but we try. If that means mounting a high horse and publicly espousing what people largely already know about our government and industry... well, so be it. "High horse" tends to imply that I think I'm better. I don't think I'm better. I wish I was better and I hope my son will be.


Well I can't fault the ideals you desire. Obviously they are a noble goal. I just think that if you become more informed you would find yourself self-dismounting from said horse and take a more reasonable stance. Pollution of course is a problem, acid rain that kills our plants and ecosystems is devastating, toxic sludge dumped into rivers is a disaster! These are largely things that have been mitigated down to acceptable levels with technology, monitoring and regulation over the past 50 years.

Vastly improved emissions technology and relatively pollutant free CO2 is being released; large areas of forest are being mined out responsibly and reclaimed effectively afterwards. It is just not that big of a problem for this world anymore. We are doing really really really well at it. Better and more responsibly than ever in the history of humanity by many multiples. I work directly in the oil sands industry. No one wants to harm the environment, and largely, we don't. It's all quite well managed by highly skilled professionals who care, and it is improving year after year.

I'm just trying to get you and others to perhaps start to consider that this is not a battle that is worth fighting. Focus on doing what you do the best you can for this world, and let us do what we do best; which is bringing bountiful energy and fuel that is needed to run the entire modern world to market in the most responsible, economical, and safest manner we can.
Canadian and American and European energy companies are not the enemy. Go find a more worthy one to fight please. I'd suggest Chinese coal plants if you're into the environment, Totalitarian expansion of government in the West if you're into keeping your rights and freedoms. There are a number of worthy causes for your attention.


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## birdman (Feb 12, 2013)

The only reason I said to divide it by 2 was that the heading was " . . . .am I a Millionaire" as opposed to "we".


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## Causalien (Apr 4, 2009)

frase said:


> The only reason I said to divide it by 2 was that the heading was " . . . .am I a Millionaire" as opposed to "we".


Being a millionaire gets to people's head. Just like your wife said. If you are above million you can. It's like a switch for irresponsibility. At $999 999, you are not a millionaire and you haven't made it, but $1 more and you can do the most irresponsible things you want. Because you are two people. That's why divide it by two until you can convince your wife to come on board and desiring a ModelS. I am guessing this is why your wife scoffed at you because she doesn't consider her money to be eligible for the calculation of your million. Her money is hers. This is a toy you want, not her. If you can convince her to want it by taking her to a test drive, then you can count her million in. 

What I recommend is more sensible, based on your income, calculate if you can do it. If you have weird income swing then average it out over the past 5 years. 

The +500k and -150k sounds like net income of your corp. If possible, have a withdrawal plan of 10% net working capital in place. So 10% of any year's net working capital averaged over 5 years is a good sensible way to calculate whether or not you can afford a Tesla Model S. 

Also you need to add in the monthly lease cost. I am assuming you are leasing and not dumping 100k in one shot. 

Why base it in USD? Cause Model S is valued at USD at intervals deemed appropriate by Musk. Our currency have dropped by 23%, almost time for a revluation. Just like they did to Norway and Europe.

The free 3G connection is almost going to be discontinued now. I am assuming you are holding your car for more than 5 years, so you add that cost in. Not adding in is like banks offering you teaser mortgage rates at 1%, but in small print it says it will increase to 2% in 3 years.

Ranger fee is good for now as there isn't many shops that can handle Model S yet. If you can find an independent, then go for it, I imagine the cost will be great as specialized equipment + training will mean that they have to offload that cost to customers for the first 5 years. But why would you scrimp out on the ranger fee if you earn 100k+ per year?

The reason why I discount a house is because it is not an income producing asset. How do we treat an asset that cannot produce income? You write it off. I would count it if you can rent it out and to borrow mortgage at 2.20%, buy some rate reset preferred at prme +3% and have the dividend pay for its mortgage. On top of all this, rent it out to a tenant. 

It is true that you save on rent money by not renting it out, but you have not structured it to be a corp that pays rent money to your own management firm while the mortgage holder is inside your RRSP.


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## Afp (Mar 19, 2013)

PennyWise.... said:


> Wow, so many thoughtful responses! I'll pick and choose a few to respond to as there was quite a bit of overlap, but I read and appreciated them all!
> 
> 
> First to respond = answer I wanted to hear = I ignore the others! Lol. J/k, but thanks for that.
> ...


You're awesome! I love the questions and your responds. 

Full disclosure: long Tesla since early 2013 and have never sold a single share. It started from a quarter of a position with fun playing money back then has grown to an extremely overweight position.


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## brad (May 22, 2009)

PennyWise.... said:


> Back to Brad's point about me not being special.


My point wasn't that you're not special: my point is that being a millionaire today is a relatively low bar compared with 15 or 20 years ago. It's like a six-figure salary: people have this idea that once you reach a six-figure salary you've crossed some sort of threshold and now you're wealthy. That's true of course by global standards, but a six-figure salary in Toronto or Vancouver won't get you much compared with a six-figure salary in a small rural village. 

But my real point is that net worth shouldn't be used as an indicator of whether you can afford something, especially if most of that net worth is tied up in things that you wouldn't want to liquidate, like your house and your retirement investments.


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## brad (May 22, 2009)

peterk said:


> Vastly improved emissions technology and relatively pollutant free CO2 is being released


"relatively pollutant free CO2." That's a good one! :biggrin:

Seriously, though, if think you could achieve comparable environmental benefits (and much more practical transportation options) by getting a hybrid instead of a Tesla. The Prius C is in the neighbourhood of $20K and is a great car. Sure it uses some gasoline, but it has an electric-only mode that you can use for very short trips. 

We're at the very early stages of a transition phase away from fossil fuels. Electric cars just aren't practical for most of us in North America, unless we only use them to get around a city or for relatively short trips, because the charging infrastructure isn't there yet. The gasoline infrastructure is. Buying a Tesla doesn't really make a statement that can inspire many others to follow you; I'd argue that buying a hybrid is a more powerful statement because anyone can buy a hybrid, even people who drive 50,000 km/year and who need to drive long distances every day. 

Electric cars (and hydrogen cars) largely displace the source of emissions, they don't eliminate emissions. If you live in a province where electricity is produced mainly by coal, you're not drastically reducing your transportation emissions footprint. Here in Québec, where I live, electric cars really do make a huge difference, because we're nearly 100% hydropower. But that's not the case everywhere.


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## marina628 (Dec 14, 2010)

How are you paying for this car?My husband paid close to 100k for a car in 2010 a Shelby mustang some special edition ,it has only 16k on it today and his plan was always to keep it 25 years +.I understand that is is not just about getting from one place to another...


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## OnlyMyOpinion (Sep 1, 2013)

I'd suggest that what your wife meant was that you could buy a $100k car when you are 'rich' and can afford one. You are not rich and you cannot afford one. But that doesn't stop the typical consumer who has no financial common sense and will never be financially independent - so it shouldn't stop you.


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## janus10 (Nov 7, 2013)

^^^ ah, but what is it that determines if someone is rich? I've seen a baseline proposed of key metrics which we surpass and yet I don't feel rich. I think I would feel rich if I never thought how much something costs, stopped looking for coupons, discounts or deals, and often confused wants with needs.

So, whether or not I meet someone's arbitrary definition of rich, I don't feel rich and that to me is most relevant.

As much as I admire the Tesla from afar, I could not see me buying one that ate up 10% of my net worth unless I literally knew I didn't have long to live and thought, what the heck.

I also don't buy into the environmentally responsible argument when I consider the entire life cycle and support systems. But, for pure aesthetics, gee whiz technology and pure driving pleasure? Absolutely!


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## brad (May 22, 2009)

janus10 said:


> I also don't buy into the environmentally responsible argument when I consider the entire life cycle and support systems.


Actually there have been lots of life-cycle analyses of the environmental impact of cars. Every one that I've seen has concluded that the biggest impact by far comes from driving the car (i.e., burning the fuel). Over a car's lifetime, those impacts significantly outweigh the impacts of the raw materials and energy used to build the car, transportation of the car from the factory to dealerships, service of the vehicle, and disposal of the vehicle at the end of its life. So cars that either use fuel very efficiently (e.g., hybrids) or that use a cleaner fuel (e.g., electricity, depending on how that electricity was produced) have a lower lifetime environmental impact.

The average car emits about 4.75 metric tons of CO2 per year. Assuming the car lasts 10 years, it will emit as much CO2 over its lifetime as you'd get from burning 23 tons of coal.


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## tygrus (Mar 13, 2012)

Remember what a Tesla now is. Its like the iphone of cars now. That means it will be eating itself every few years. Combustion engines have been perfected for a lot of years and car builders just add optional bells and whistles now. Because the efficiency of solar, batteries, electric vehicles and all the elaborate electronics are in their infancy, this will be a revolving technology for a long time. I would pay $50k, but not $100k.


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## Guban (Jul 5, 2011)

^ your description of an electric car may be accurate, but I note that there are a lot of iPhone users! Maybe Pennywise is an iPhone kind of guy?


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## CalgaryPotato (Mar 7, 2015)

Guban said:


> ^ your description of an electric car may be accurate, but I note that there are a lot of iPhone users! Maybe Pennywise is an iPhone kind of guy?


What he's saying though is that how many people are using the iphone 4 these days? You pick up one of those ancient phones (from 5 whole years ago) and see the lack of so many features that you would take for granted now.

You don't want that happening to your $100,000 car.


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## SuperGrover (Oct 24, 2011)

What's your anticipated cash-flow for the duration of the cars life? How will this impact retirement, etc... If it means working an additional year (using averaged cash flow over 5-10 years with anticipated work load if possible), do you still want to buy it? Do what feels right for you and your situation.


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## tygrus (Mar 13, 2012)

I guess a question for the OP is what do you want in a car? Are you a super early adopter that wants to have the latest tech regardless of its development, or do you just want a flashy car? I mean you can get a new vette for $75k if you really want to feed your inner mid life crisis. Or do you just want to get around in an environmentally responsible way? Well then a honda civic costs about $15k and gets more than 40 mpg.

I never ever buy new tech no matter what it is. I always buy a model or two behind. I have an iphone 5, my PC is from 2008 and my ipad is 4 years old. I bought a HDTV 4 years ago and it will last me another 4 I am sure.


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## janus10 (Nov 7, 2013)

brad said:


> Actually there have been lots of life-cycle analyses of the environmental impact of cars. Every one that I've seen has concluded that the biggest impact by far comes from driving the car (i.e., burning the fuel). Over a car's lifetime, those impacts significantly outweigh the impacts of the raw materials and energy used to build the car, transportation of the car from the factory to dealerships, service of the vehicle, and disposal of the vehicle at the end of its life. So cars that either use fuel very efficiently (e.g., hybrids) or that use a cleaner fuel (e.g., electricity, depending on how that electricity was produced) have a lower lifetime environmental impact.
> 
> The average car emits about 4.75 metric tons of CO2 per year. Assuming the car lasts 10 years, it will emit as much CO2 over its lifetime as you'd get from burning 23 tons of coal.


What about placing an order for a brand new car rather than buying used? What about the manufacture and disposal of the batteries? What about how the electricity is generated that charges the batteries? What about the electricity you would still consume for standby even if you don't drive it? What about the construction of charging stations and the additional power lines that need to be laid for the charging stations? Some of these issues are exceedingly minor, but not all. 

I don't buy the environmental aspect of purchasing a Tesla as realistic justification when there are other cheaper electric vehicles available. And, I would have to think, one would consume more electricity per km driven simply because of the great performance it has. Tesla vs. a Yaris may still be cleaner all things considered, but Tesla vs. a Leaf or Prius or Volt? I'd be skeptical if the Tesla would be better for the environment than the rest. If I'm buying a Tesla, it isn't because I want to save the planet. It's because of design, performance, uniqueness and maybe even cachet. That's just me.

If I had a Tesla in my garage rather than my 2002 SUV, I would drive more frequently. It would encourage wasteful behaviour in me. I suspect I would not be alone.


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## brad (May 22, 2009)

janus10 said:


> What about placing an order for a brand new car rather than buying used? What about the manufacture and disposal of the batteries? What about how the electricity is generated that charges the batteries? What about the electricity you would still consume for standby even if you don't drive it? What about the construction of charging stations and the additional power lines that need to be laid for the charging stations? Some of these issues are exceedingly minor, but not all.


Apart from buying new vs. used, and the electricity factor (which I already mentioned), the costs of production and infrastructure are spread across all vehicles manufactured. If you're concerned about charging infrastructure, then you should also roll the ongoing environmental costs of maintaining the gasoline infrastructure into your gasoline-powered car (the extraction and refining of oil, shipping and distribution of gasoline to stations, the power it takes to pump the gasoline, etc.), not to mention the original environmental impacts of putting those gasoline stations in place, leaking underground storage tanks, etc.

I totally agree that if you want an electric car or you want to reduce your environmental impact, there's no reason to get a Tesla -- there are much cheaper and probably more efficient models on the market. And you have to factor in the source of your electricity.

I did this evaluation for myself a few years back and concluded that the best car is no car. We ditched our car entirely a year ago and now use public transit, bike, car-share, and car rentals to get around. But we live in a city with good public transportation, with a bus stop and bike path nearby and car-shares within walking distance. That option isn't available to everyone. If I needed a car, I'd buy a used Prius or even a used Yaris, which gets pretty good highway mileage (the Prius gets its best fuel economy in city driving).


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## nobleea (Oct 11, 2013)

I would love to get a Tesla S. Maybe at some point I will. I would certainly not buy it new. Used from the states there is a decent market. Buy the car used for 60K or whatever, drive it for a year, then decide if getting the latest and greatest is worth an extra 40K from what you have already. Doubtful.

If I was in your position (and I will be next year), I wouldn't even think about dropping that kind of cash on a car. At some point I would like to get a used Cayman or similar, but there'd have to be 750-1000K sitting around in liquid investments before I'd consider it. Or something like 35-50K in passive income, in addition to our regular income.

When I see someone driving a Tesla, I think they are pulling in 250K in personal income at least. Anything less and they're posing.


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## jaybee (Nov 28, 2014)

nobleea said:


> When I see someone driving a Tesla, I think they are pulling in 250K in personal income at least. Anything less and they're posing.


Agreed. "at least" being the key word.


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## uptoolate (Oct 9, 2011)

nobleea said:


> When I see someone driving a Tesla, I think they are pulling in 250K in personal income at least. Anything less and they're posing.


This sounds right to me and keep in mind that far more people in this income range are driving a much less expensive car than a Tesla.


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## Cal (Jun 17, 2009)

Personally I don't count my house as part of my net worth, and count RRSP's at half their value, based on what would roughly be left after withdrawing from the RRSP.


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## cashinstinct (Apr 4, 2009)

Cal said:


> Personally I don't count my house as part of my net worth, and count RRSP's at half their value, based on what would roughly be left after withdrawing from the RRSP.


I hope you don't count your mortgage too (if applicable)!

(I remember seing some net worth posted in blogs where people did put their mortgage in, but not the house... big surprise, net worth was negative).

I agree for RRSP. I use around 40%, but same idea... I get a boost in assets when I get tax refund, so the liabilities side is a tax payable in the future.


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## nobleea (Oct 11, 2013)

cashinstinct said:


> I hope you don't count your mortgage too (if applicable)!
> 
> (I remember seing some net worth posted in blogs where people did put their mortgage in, but not the house... big surprise, net worth was negative).
> 
> I agree for RRSP. I use around 40%, but same idea... I get a boost in assets when I get tax refund, so the liabilities side is a tax payable in the future.


How big are your RRSP's/pensions that you are expecting a 50% or even 40% tax rate?? Keeping in mind that's an AVERAGE tax rate, so the marginal rate has got to be well over 60%.
I think 20-25% for an average tax rate is far more realistic.


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## cashinstinct (Apr 4, 2009)

nobleea said:


> How big are your RRSP's/pensions that you are expecting a 50% or even 40% tax rate?? Keeping in mind that's an AVERAGE tax rate, so the marginal rate has got to be well over 60%.
> I think 20-25% for an average tax rate is far more realistic.


DB pension plan, 2.25% per year of service X 30 year ... (If I stay with same employer / plan does not change % per year of service / Etc / Etc)
RRSP is not large yet.

I am in Québec, so 38.37% marginal tax rate after $44,701+ in 2015 dollars... (20% Québec rate, 18.37% federal after Refundable Quebec abatement)... not that much, should have at least $40K in today's dollars in pensions.


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## RBull (Jan 20, 2013)

nobleea said:


> How big are your RRSP's/pensions that you are expecting a 50% or even 40% tax rate?? Keeping in mind that's an AVERAGE tax rate, so the marginal rate has got to be well over 60%.
> I think 20-25% for an average tax rate is far more realistic.


Correct. Unless someone is in a situation with 2 spouses having large DB pensions, plus considerable other investments there is no way anyone is going to pay anywhere near those kind of tax rates in retirement. We pay ~20% range with significant RRSP assets and 1 DB pension and middle upper range for retirement income. 

If people really believe their avg tax rate on RRSP's will be 50 or even 40% why contribute to them at all. 

This thread has certainly gone way off topic.


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## Guban (Jul 5, 2011)

nobleea said:


> How big are your RRSP's/pensions that you are expecting a 50% or even 40% tax rate?? Keeping in mind that's an AVERAGE tax rate, so the marginal rate has got to be well over 60%.
> I think 20-25% for an average tax rate is far more realistic.


Are you including the OAS clawback? The top marginal income tax rate in Canada is only around 50% (and climbing...) not sure how you get "well over 60%".


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## OhGreatGuru (May 24, 2009)

I don't know why you are asking us to get involved in this disagreement between you and your spouse. 

I'm sure that when she said "when we have a million dollars" she meant "when we have a million dollars to spend", not "when our net worth, including the home we live in and all our retirement savings, passes the $1M mark".

eg. If you had no savings, but the net value of your home was over a million because you were in an expensive market, would you still consider you could afford to buy this ridiculously expensive car?

You and your spouse clearly disagree on whether this is a justifiable purchase. Address that issue, rather than try to play lawyer with her over her casual statement that you are now trying to turn into a verbal contract.

PS. In any case, unless you are sitting on a large pile of liquid assets for which you have no foreseeable need, your net worth is nearly irrelevant to whether or not you can afford this indulgence. It's your net income; projected cash flows; projected future expenditures/needs; and family budget that are relevant. What is your family going to have to give up if you buy this car? You haven't provided us with any of this information, nor should you. Crunch the numbers and work it out with your spouse.


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## protomok (Jul 9, 2012)

you could always try the old "ask for forgiveness later" approach


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## janus10 (Nov 7, 2013)

Does spending $100k+ on a car which you probably let sit there 22-23 hours per day cause you to look at this differently?


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## LBCfan (Jan 13, 2011)

You might be, you might not be. The only people who care are you and your wife. Work it out. 

My wife and I have had similar car discussions with the exception that both of us are clearly millionaires. We've compromised. We both have middle class cars to drive (both Fords, not that it matters) and I get to have a few old little british cars for fun. If a Tesla turns your crank, you might want to wonder why?


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## My Own Advisor (Sep 24, 2012)

janus10 said:


> Does spending $100k+ on a car which you probably let sit there 22-23 hours per day cause you to look at this differently?


I had a similar thought. This $100k asset will also depreciate. I'd rather own $100k assets that will appreciate in value over time. (And drive cheap cars).


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## uptoolate (Oct 9, 2011)

I'm with you MOA. I was looking at the Vanguard gift shop site and they have a magnetic bumper sticker that reads, 'My other vehicle is an IRA'. I wonder if they could update it for the Canadian market to RRSP or TFSA?


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## My Own Advisor (Sep 24, 2012)

dotnet_nerd said:


> Reminds me of my college days.
> 
> My bumper sticker read "My other car is a piece of crap too"




LOL uptoolate.


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## GreedIsGood (Dec 4, 2013)

brad said:


> Actually there have been lots of life-cycle analyses of the environmental impact of cars. Every one that I've seen has concluded that the biggest impact by far comes from driving the car (i.e., burning the fuel). Over a car's lifetime, those impacts significantly outweigh the impacts of the raw materials and energy used to build the car, transportation of the car from the factory to dealerships, service of the vehicle, and disposal of the vehicle at the end of its life. So cars that either use fuel very efficiently (e.g., hybrids) or that use a cleaner fuel (e.g., electricity, depending on how that electricity was produced) have a lower lifetime environmental impact.
> 
> The average car emits about 4.75 metric tons of CO2 per year. Assuming the car lasts 10 years, it will emit as much CO2 over its lifetime as you'd get from burning 23 tons of coal.


True, but until electric cars become the norm (eg. sub $30k and a range of at least 500 kms), then I will stick with gas.


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## andrewf (Mar 1, 2010)

I don't think they need to be quite sub-$30k, given that they will require little maintenance or fuel. Probably sub-$40k.

I think people should realize that self-driving cars are going to change the game a whole lot over the next 15 years. A lot of people who own cars today will be quite pleased to buy rides in self-driving cars as needed at that time.


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