Recession-Proof Purchase?
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Instructor
Joined: Feb 2022
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From: Northern Virginia
There are a lot of people who mistake high income for wealth. I've lost count of how many people on Reddit have asked a question like the following, "I'm 21 years old, living at home and making $100k/$200k, should I buy (lease) a [Tesla Model S, Porsche, Mercedes, etc].
I wonder how many high-wage earners will decide that leasing a 911 isn't the best strategy in a downturn. People who have wealth, are more insulated from this of course. But I wonder how many prospective 911 buyers have high income and low net worth? That class would be the first to rethink their decision.
I wonder how many high-wage earners will decide that leasing a 911 isn't the best strategy in a downturn. People who have wealth, are more insulated from this of course. But I wonder how many prospective 911 buyers have high income and low net worth? That class would be the first to rethink their decision.
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From: Doylestown, PA
There are a lot of people who mistake high income for wealth. I've lost count of how many people on Reddit have asked a question like the following, "I'm 21 years old, living at home and making $100k/$200k, should I buy (lease) a [Tesla Model S, Porsche, Mercedes, etc].
I wonder how many high-wage earners will decide that leasing a 911 isn't the best strategy in a downturn. People who have wealth, are more insulated from this of course. But I wonder how many prospective 911 buyers have high income and low net worth? That class would be the first to rethink their decision.
I wonder how many high-wage earners will decide that leasing a 911 isn't the best strategy in a downturn. People who have wealth, are more insulated from this of course. But I wonder how many prospective 911 buyers have high income and low net worth? That class would be the first to rethink their decision.
If someone wants to do that, go them. No lecture from me.
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Just speaking generally, if/when there is a recession, everyone will be impacted. It just matters how much.
Yes, disproportionately, the middle to lower class will be impacted more than upper income individuals.
That said, if/when there is a recession and ADM's come down or disappear and a (for example) a 911 GTS is within MSRP or below it, how do you ("you" in the general sense not you as in the OP specifically) will not be part of the group that is significantly impacted by the recession so that a GTS even at a (for example) 2% MSRP discount would be attainable or attractive?
That's sort of the problem of "hoping" for a recession. Just because there's a downturn, it doesn't mean that buyers will not be likewise affected, just like suppliers would be.
Careful what one wishes for.
Yes, disproportionately, the middle to lower class will be impacted more than upper income individuals.
That said, if/when there is a recession and ADM's come down or disappear and a (for example) a 911 GTS is within MSRP or below it, how do you ("you" in the general sense not you as in the OP specifically) will not be part of the group that is significantly impacted by the recession so that a GTS even at a (for example) 2% MSRP discount would be attainable or attractive?
That's sort of the problem of "hoping" for a recession. Just because there's a downturn, it doesn't mean that buyers will not be likewise affected, just like suppliers would be.
Careful what one wishes for.
Three Wheelin'
Joined: Dec 2017
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From: South Florida
There are a lot of people who mistake high income for wealth. I've lost count of how many people on Reddit have asked a question like the following, "I'm 21 years old, living at home and making $100k/$200k, should I buy (lease) a [Tesla Model S, Porsche, Mercedes, etc].
I wonder how many high-wage earners will decide that leasing a 911 isn't the best strategy in a downturn. People who have wealth, are more insulated from this of course. But I wonder how many prospective 911 buyers have high income and low net worth? That class would be the first to rethink their decision.
I wonder how many high-wage earners will decide that leasing a 911 isn't the best strategy in a downturn. People who have wealth, are more insulated from this of course. But I wonder how many prospective 911 buyers have high income and low net worth? That class would be the first to rethink their decision.
At the same time guys with good credit were getting declined in financing . They voiced frustration but the truth is they didnt have the money to pay cash .
I remember sitting on 6speedonline where the consensus of how hard every dollar counted mattered and all vowed never to forget .
I also remember the dot.com sink. I remember sitting in my dealership watching the market in free fall in the waiting room, and a guy there told me he lost everythjing and was having his car inspected to sell the one piece of equity left . BTW he told me he had owned his house outright but mortgaged it because he was chasing dot com mania .
I remember site sponsors who survvieded as well as those who vanished . I recall one member whose 996 Turbo was locked a shop. that went bust in many little pieces .
The stories are endless ... it can get bumpy for wealth . Plus high income can change on a dime even in the most essential secure profession . Even an essential professional like a surgeon can get sick, face a divorce , or make a few bad investments that tap him out .
My feeling is .... always be alert .
Last edited by yrralis1; May 21, 2022 at 02:40 PM.
Drifting
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very hard to predict as there are many variables at play. Some of these variables
1. how deep is the recession in the US
2. How deep is the recession in Europe . The risk of deeper recession in Europe seems to be higher than US . In the past some German car companies diverted more cars from Europe to US
3. How bad will the inflation be and for how long it will last
4. will wages/incomes catch up to inflation, so the net result of inflation will be minimal
5. How high interest rates will go. We are a debt society , so higher interest rates affect demand.We can argue that the low interest rate environment for years by the Feds has contributed significantly to this mess " cheap money"
6. Despite the fact that the feds should be independent , they have been more and more influenced by politics as compared to before. So this is an election year , Dems will put pressure on Powell to lift off the gas on rate hikes to avoid a slaughter come Nov
plus a bunch of other variables
but if I am a betting man , you have much higher chance at getting a 911 allocation in a year as compared to now
1. how deep is the recession in the US
2. How deep is the recession in Europe . The risk of deeper recession in Europe seems to be higher than US . In the past some German car companies diverted more cars from Europe to US
3. How bad will the inflation be and for how long it will last
4. will wages/incomes catch up to inflation, so the net result of inflation will be minimal
5. How high interest rates will go. We are a debt society , so higher interest rates affect demand.We can argue that the low interest rate environment for years by the Feds has contributed significantly to this mess " cheap money"
6. Despite the fact that the feds should be independent , they have been more and more influenced by politics as compared to before. So this is an election year , Dems will put pressure on Powell to lift off the gas on rate hikes to avoid a slaughter come Nov
plus a bunch of other variables
but if I am a betting man , you have much higher chance at getting a 911 allocation in a year as compared to now
Last edited by pitt911; May 21, 2022 at 05:27 PM.
Three Wheelin'
Joined: Dec 2017
Posts: 1,381
Likes: 1,140
From: South Florida
very hard to predict as there are many variables at play. Some of these variables
1. how deep is the recession in the US
2. How deep is the recession in Europe . The risk of deeper recession in Europe seems to be higher than US . In the past some German car companies diverted more cars from Europe to US
3. How bad will the inflation be and for how long it will last
4. will wages/incomes catch up to inflation, so the net result of inflation will be minimal
5. How high interest rates will go. We are a debt society , so higher interest rates affect demand.We can argue that the low interest rate environment for years by the Feds has contributed significantly to this mess " cheap money"
6. Despite the fact that the feds should be independent , they have been more and more influenced by politics as compared to before. So this is an election year , Dems will put pressure on Powell to lift off the gas on rate hikes to avoid a slaughter come Nov
plus a bunch of other variables
but if I am a betting man , you have much higher chance at getting a 911 allocation in a year as compared to now
1. how deep is the recession in the US
2. How deep is the recession in Europe . The risk of deeper recession in Europe seems to be higher than US . In the past some German car companies diverted more cars from Europe to US
3. How bad will the inflation be and for how long it will last
4. will wages/incomes catch up to inflation, so the net result of inflation will be minimal
5. How high interest rates will go. We are a debt society , so higher interest rates affect demand.We can argue that the low interest rate environment for years by the Feds has contributed significantly to this mess " cheap money"
6. Despite the fact that the feds should be independent , they have been more and more influenced by politics as compared to before. So this is an election year , Dems will put pressure on Powell to lift off the gas on rate hikes to avoid a slaughter come Nov
plus a bunch of other variables
but if I am a betting man , you have much higher chance at getting a 911 allocation in a year as compared to now
There were many other times that we saw plunges in the markets and a hopelessness fed by media . Remember, Ebola ? More recently how about the first weeks of Covid ? Enough illness .. Remember Brexit ? Greece ? The Govt Shutdown US ?
These trends have momentum and no one can pick the bottom but I am looking at AXP. MSFT, and XOM and wishing I had more money to nibble long .
This is not forever !! Not even close.
Nordschleife Master
Joined: Jun 2018
Posts: 5,985
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From: Ohio
Maybe people will pick up their own food instead of paying 30% more to have it delivered by DoorDash.
I think most people that say they’re waiting for a crash to buy a 911 because allocations become aplenty, aren’t going to when it happens.
A good test is if you’ve bought the dips recently, or have you been holding out because inside, you say it’s going to drop even more.
I think most people that say they’re waiting for a crash to buy a 911 because allocations become aplenty, aren’t going to when it happens.
A good test is if you’ve bought the dips recently, or have you been holding out because inside, you say it’s going to drop even more.
Banned
Joined: Jul 2020
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Despite the fact that the feds should be independent , they have been more and more influenced by politics as compared to before. So this is an election year , Dems will put pressure on Powell to lift off the gas on rate hikes to avoid a slaughter come Nov
plus a bunch of other variables
plus a bunch of other variables
I suspect your average voter (consumer), is more concerned about what inflation is doing to their family budget or savings, from price increases in gas, rent, goods and services, etc….than they are in interest rates? While rates directly impact what the average consumer pays in interest on CC and other loans, I don’t see rising rates impacting inflation until consumers slow their pandemic-induced spending spree. Further complicating this issue, and coming out of two years of COVID, I personally believe that the forces driving up inflation have more to do with things out of the Fed’s direct control….so I don’t see increasing rates to have any immediate and major impact on inflation. There are other forces at play here, some being international, that are driving inflation.
Although Wall Street will have a sell off every time the Fed announces a rate hike.
This too shall pass.
PS - The Fed’s Board of Governors are staggered appointments (appointed by the President when someone’s term is up, or they leave), and approved by the Senate….for a 14 year term (non-renewable). In theory, that should help to insure some political neutrality as appointees will/should come from both political persuasions.
Last edited by CodyBigdog; May 21, 2022 at 07:03 PM.
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Joined: Oct 2003
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From: San Francisco
There are a lot of people who mistake high income for wealth. I've lost count of how many people on Reddit have asked a question like the following, "I'm 21 years old, living at home and making $100k/$200k, should I buy (lease) a [Tesla Model S, Porsche, Mercedes, etc].
I wonder how many high-wage earners will decide that leasing a 911 isn't the best strategy in a downturn. People who have wealth, are more insulated from this of course. But I wonder how many prospective 911 buyers have high income and low net worth? That class would be the first to rethink their decision.
I wonder how many high-wage earners will decide that leasing a 911 isn't the best strategy in a downturn. People who have wealth, are more insulated from this of course. But I wonder how many prospective 911 buyers have high income and low net worth? That class would be the first to rethink their decision.
Racer
Joined: Oct 2013
Posts: 322
Likes: 248
From: so cal
Maybe people will pick up their own food instead of paying 30% more to have it delivered by DoorDash.
I think most people that say they’re waiting for a crash to buy a 911 because allocations become aplenty, aren’t going to when it happens.
A good test is if you’ve bought the dips recently, or have you been holding out because inside, you say it’s going to drop even more.
I think most people that say they’re waiting for a crash to buy a 911 because allocations become aplenty, aren’t going to when it happens.
A good test is if you’ve bought the dips recently, or have you been holding out because inside, you say it’s going to drop even more.
Burning Brakes
Joined: Aug 2020
Posts: 1,053
Likes: 863
From: Utah
The best Econ trend spotter I know who called some of the hard to predict pandemic associated phenomena says recessions are expectation driven, and it’s coming later this year, but that it won’t do a whole lot to cool inflation. He says just look at consumer items, asset classes and the sheer explosion of cash still being multiplied in the world’s financial systems. He thinks our recent lengthy deflationary period is now going to be followed by a corresponding inflationary period and during recessions that will mean stagflation. He says corps have so far responded by sending people home to work in volumes that will eventually rival what happened from the pandemic. That in itself will have a stagflation effect on luxury consumer items among other things.
Three Wheelin'
Joined: Feb 2016
Posts: 1,570
Likes: 1,021
Most economists in the US are now predicting a recession towards the end of the year. I wonder if this could reduce the number of people with V70s as people reevaluate their liquidity in a downturn. That is my way of wondering if it may become easier to get a GTS allocation in about six months than it is today?
Last edited by malba2366; May 22, 2022 at 04:45 PM.
Racer
Joined: May 2019
Posts: 366
Likes: 388
From: Philly
There is the same discussion- almost word for word - going on over in the Rolex Forums. Same idea, same allocation, same dealer phone call and some cancel. Their grey market is also scary full of inventory, so the drop when it comes will be swift. Makes me wonder about Porsche also.
Three Wheelin'
Joined: Feb 2016
Posts: 1,570
Likes: 1,021
There is the same discussion- almost word for word - going on over in the Rolex Forums. Same idea, same allocation, same dealer phone call and some cancel. Their grey market is also scary full of inventory, so the drop when it comes will be swift. Makes me wonder about Porsche also.
Last edited by malba2366; May 22, 2022 at 05:10 PM.
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I do see Fed induced recession probably next year and I agree with them stepping on the brakes pretty hard as inflation really hurts not well do households. But some inflation such as wages (labor was squeezed for past 20 years and now reverting, boomers leaving workforce, Covid and previous admin reduced legal immigration, gen x types skipping 9-5 jobs and doing Roblox, Airbnb, Etsy, Amazon seller, etc) and energy (lower capex, OPEC - still 2 million barrels a day short vs precovid, Russia/Ukraine, and less refining vs precovid) seem to be permanent.
I expect a mild recession next year (nothing like 2007 or 1999) barring any crazy escalation in Russia/Ukraine or China/Taiwan. I do agree with others - if there were a recession, it might be easier to get allocation but since there are still limited number of cars, and affluent client base, it's a tricky call (maybe no adm).
I expect a mild recession next year (nothing like 2007 or 1999) barring any crazy escalation in Russia/Ukraine or China/Taiwan. I do agree with others - if there were a recession, it might be easier to get allocation but since there are still limited number of cars, and affluent client base, it's a tricky call (maybe no adm).