jimbo1111

There are benefits to having a home mortgage. The mortgage interest is completely deductible. At least for now it still is.

Duke I

So hard to postpone purchasing things we really want, but do not really need, but best to pay cash for these. Even better to pay cash for everything. Home mortgage is worthy debt (even though interest is deductible, there is still significant net expense).

1. Buy home. 2. Pay off home. 3. Save money. 4. Pay cash for Porsche.

Buy and hold here -- a top perquisite, no fretting about depreciation.

Alan Smithee

That assumes you opt for an unrealistic mileage limit, and return the car to the leasing company at the end of term.

NoGaBiker

I have always bought and paid cash for cars. Until I was able to pay cash for houses, I bought them with a mortgage, which we paid off asap. I think of paying cash as a financially wise move that also happens to feel like a great luxury when doing it. But everyone's different. Personally, if I was paying mortgages every month on 10 pieces of real estate and several cars, I'd feel a little freaked out about the exposure. Especially given the two close friends I watched shed their sizeable fortunes in the 2008-2012 downturn because nearly everything was mortgaged so they'd have cash readily available at all times.

But that was fairly unusual, I'll grant you. Then again, to those two families, unusual or not, it hurts like a sumbitch to be starting over in their fifties after having been mansion-and-airplane rich for a decade.

ibmiked

Actually I believe the correct (and misquoted) advice would be to never FINANCE a depreciating asset. When you lease something, you are essentially only paying for the depreciation anyway, along with a small profit for the finance company. So all this talk about depreciation is moot. 20+ years ago it was possible to lease a car through your business and basically buy it back at the end as an individual. The leases were inflated to cover much more than just the depreciation and therefore the buyout was ridiculously low. It was a great way to transfer wealth out of your business tax free and end up owning a personal vehicle with almost no cost basis.

Now leases don't work that way, and whether you buy a car and enjoy it for a few years or lease it and turn it back in, one way or the other the 'cost' of ownership is the depreciation. Of course there are other factors such as sales tax and business write-offs, but in many ways the two different methods are a matter of preference and financial standing. If you want to walk into the dealership and just toss them your keys at the end of a lease then that's your prerogative. For me personally, by 'owning' my car I have the flexibility to get out of it at any time, either by selling or trading it in as circumstance dictates.

If you want to give someone sound financial advice you should tell them to only buy a Porsche (or anything for that matter) at the bottom of it's depreciation curve. That is the smart financial move. Otherwise, since we all want to enjoy our cars well before they reach that low point we've all decided we can live with 'losing' money during our ownership. I choose to see the depreciation as the cost I pay for the pleasure I derive from the car. In the end, if you subtract what you get when you sell the car from what you paid and divide by the miles you used the car, you'll have a number that you can then evaluate as worth it or not.

c_Gio

I think in terms of monthly cash-flow, and how things fit... I've financed, leased, and just bought cars outright. Leasing sure offers the best smile per dollar value

Scorponok

Well, I really posted the quote as a joke (great show btw). As I said before though, I've purchased all my cars; I have never leased a car, so really not that familiar with it but do know it has its advantages/disadvantages depending on your personal circumstances (can you afford the car, do you own your own business, etc). Of course, if you couldn't afford the car in the first place, you really shouldn't be buying or leasing it ... but that's for another thread.

I agree that the smartest thing to do is to simply wait it out and purchase a quality used/CPO one. Sometimes you just gotta have the latest greatest and in that scenario, you just have to eat the financing and/or depreciation costs associated with having the latest toy.

It is what it is, to each their own.

Alan Smithee

Not sure how leases are different from 20+ years ago, but you can select a higher mileage cap than you will be using, and on a car with unfavorable lease residuals (any Porsche sports car) have a lot of 'equity' at the end of term that will either benefit PFS when you hand back the keys, or provide an opportunity - with the option of CPO - to buy as an individual for much less than market value.

993Mpls

Archimedes, what are the three cars that you bought?

Archimedes

RS5, Carrera S and a Cayman S.

Archimedes

Leases? No. Tax rules? Yes. I think that's what he's referring to, the time before there were caps on the auto write off.

Mumbles

These are fine automobiles indeed. But not worth getting into debt for..........

Old school. If I can't pay for it I don't buy it.

reuben991

+1 and if the depreciation bothers you either buy used or buy a new "cheap" car. None of us "need" a Porsche

993Mpls

Archimedes - nice collection.

Thanks!

Lawsofpower

You'll be purchasing other cars. Lol.