If you had to pick just 1 car to keep, which one would you keep? (993 vs 740i)
03-07-2010, 07:48 AM
#17
From my recent shopping trip, it seems like C4Ss are still bringing good money (for a year after a major downturn). Spring is on the way, so no better time to sell. Mortgage rates can't get much lower, so good time to refinance. If the economy recovers, things should get better for most folks and you can look for another 993. If we "double dip", as many fear, you'll still need to get out of the car(s) and the big house, but there will be a lot fewer buyers for either cars or houses, IMO.
When my (large) group lost our Blue Cross contract at one of our two main hospitals in the mid 90s, our cash flow plummeted overnight but we still had to make payroll for 17 CRNAs and our office staff. I knew I needed to sell my '88 turbo cab ASAP, but I delayed and ended up selling in a panic for less than I believe I could have if I had put it on the market at the first sign of trouble.
I hate condos, but that's just me. I like open space and owning the land around the house.
Good Luck! I read every post and there are lots of people smarter than I am giving you sound advice.
Family first. Nothing else matters.
When my (large) group lost our Blue Cross contract at one of our two main hospitals in the mid 90s, our cash flow plummeted overnight but we still had to make payroll for 17 CRNAs and our office staff. I knew I needed to sell my '88 turbo cab ASAP, but I delayed and ended up selling in a panic for less than I believe I could have if I had put it on the market at the first sign of trouble.
I hate condos, but that's just me. I like open space and owning the land around the house.
Good Luck! I read every post and there are lots of people smarter than I am giving you sound advice.
Family first. Nothing else matters.
03-07-2010, 08:43 AM
#18
These are tough questions - but I applaud you laying things out there. If it were me:
1) Sell the 993. It's a depreciating asset with no functional value in your day to day life which is what you're trying to maintain.
2) Refinance. A 30yr mortgage at 5% would for a $116,000 loan - should put your monthly payments closer to $800 depending on what your property tax rate is. Let's say property tax is $250 ( this is a huge variable I could be way off ) a month that makes the total payment $1050 a month. Subtract the $800 a month from the renters ( great idea by the way) add back increased utilities of say $125 a month and you're out of pocket each month is around $375 for the mortgage. This to me (if I've made the right assumptions) is a true no brainer.
3) I wouldn't touch the 401k unless there are no other alternatives and even then I would downsize before I touched retirement savings. With Tax and penalties you'll lose 40% ++, so in reality to get $86K you'll need to take out $143,000. In my opinion thats a lot to take out at age 49 when that money is growing tax free for your retirement.
Good Luck Steve - Lots on this thread to think about. It's always easy to give advice I guess, but asking for it the way you have sets you apart.
Jeff
1) Sell the 993. It's a depreciating asset with no functional value in your day to day life which is what you're trying to maintain.
2) Refinance. A 30yr mortgage at 5% would for a $116,000 loan - should put your monthly payments closer to $800 depending on what your property tax rate is. Let's say property tax is $250 ( this is a huge variable I could be way off ) a month that makes the total payment $1050 a month. Subtract the $800 a month from the renters ( great idea by the way) add back increased utilities of say $125 a month and you're out of pocket each month is around $375 for the mortgage. This to me (if I've made the right assumptions) is a true no brainer.
3) I wouldn't touch the 401k unless there are no other alternatives and even then I would downsize before I touched retirement savings. With Tax and penalties you'll lose 40% ++, so in reality to get $86K you'll need to take out $143,000. In my opinion thats a lot to take out at age 49 when that money is growing tax free for your retirement.
Good Luck Steve - Lots on this thread to think about. It's always easy to give advice I guess, but asking for it the way you have sets you apart.
Jeff
03-07-2010, 09:17 AM
#19
Rennlist Member
What I find so funny in our society is that people think they own so many possessions when in fact, the possessions own us.
I don't own 4 motorcycles, a Porsche and a Honda. They own me based on the time I devote to them all.
I never finance anything, but then, I hate banks.
03-07-2010, 10:22 AM
#20
Rennlist Member
Thread Starter
Thanks everyone for your salient points. I should have clarified, our house is "only" 3800 sq feet on the first and 2nd floor, but with the basement and accessory apt above the garage added in, that makes it 6000 sq feet (5900 ft plus 278 ft for the apt above the detached garage). It's not really THAT big 
.
We have our 15 y.o. stepdaughter only on the weekends and have no other kids but have seriously gotten attached to this house. Yes, I realize no one needs this much space. We decorated it just how we like it and it took 2 years to get this way. It's on only 7 years old so maintenance is slight and negligible so far.
We will consider moving to a smaller house in the area after hearing what you guys wrote about downsizing. It would hurt, but I guess we could do it. We'd be "stuck" in a townhouse for the prices we're talking about $500-550K. Single family houses for that price in this area would need a lot of work and would be very old. I know, it could be done if we had to. Our cats have really become attached to the new house, too.
)
Other monies I didn't bring it up yet ... we have $85k in a money market (that was $123k a year ago in 5 American Fund mutual funds till the financial melt down that affected most of us). We stupidly, insanely converted it to a money market when the stock market hit 6500 (and they're value went down to $85k - we panicked like fools, and took our money onto the sidelines on the advice of our money manager lady at Wachovia in case it still kept going down - it was in a free fall so it seemed) so we never got the advantage of the bounce back in the market on it's way back up to 10500 point on the Dow. Arghhh! I can be so stupid sometimes. It's just sitting in this money market at $85k, not growing at all, our only emergency fund other than $35k in our checking account that keep going down each month by $2k or so due to my hopefully temporarily reduced income.
That's why I thought dipping into our 401K would be a "great idea" to pay off the house early but you folks have strong opinions against that and I see why. My great ideas aren't always so great as you can see.
I thought about refinancing about a million times the $116k we owe, but we've only got 11 years to go now on our mortgage. Refinancing and going to ... gulp, 30 years? Eegads. That would mentally suck, regardless of how quickly we could one day pay it off if we get some lump sum or better job. If we don't get a lump sum some how over the years, we're stuck paying a mortgage, albeit small, till I'm 79. I can't see doing that.
Here's where I'm at... if we can swing paying off the house with the 993 sale money and another $86k from somewhere (a smaller amount of $40k from the 401k maybe and $46k from the money market?), we could keep our house and only pay $523 a month for it. That's taxes of $9800 a year equals $817 mo, + $115 mo for property insurance = $932 mo. + $391 for utilities mo. = $1323 mo, minus the rental income of the carriage house above the garage of $800 month = $523 mo payout to live here. $523 a month would be cheap to live in this house. Is that logical?
It is such a royal pain and expensive proposition to move. We love the ability to walk into town in 5 minutes to hit many, many stores. Our friends our out here in this area. Your thoughts on living in a condo are dead on. Very close to the neighbors, they might smoke and make our living area smelly, or they might be noisy and we'll be hating life. Apt living is a thought, investing out money from the house, but with my current income we wouldn't even qualify to get a nice 2 BR, 1 Den place in this area ($2900 mo), even if we are sitting on $700k in cash from the sale of the house.
But man-o-man, I'd miss my car. Maybe, eventually, I could hit the job lottery and buy another one but truly, I doubt it. I know, no one NEEDS a 993. To save up $35k again, I don't see it happening. I bought my last car with inheritance money from my grandfather and the rest went into buying this house. There won't be any more inheritance money.
I really appreciate your astute suggestions. I can't tell you how much this is helping me come to a decision. About buying a beater as a daily driver that's more reliable than a 9 yr old BMW, or a new or almost new Volkswagen TDI that gets crazy great mileage, I will consider that too. I can't imagine life without my 740i. It's hard to explain unless you drive one everyday and you're a BMW E38 7 series lover. I'd only get $8500-$10k for it with 100k miles on it so it seems like a waste to sell it at the bottom of it's depreciation curve but I know the maintenance will be high in time again. Lately it's been reasonable. That won't last.
I'm one stubborn SOB, I know.
. We have our 15 y.o. stepdaughter only on the weekends and have no other kids but have seriously gotten attached to this house. Yes, I realize no one needs this much space. We decorated it just how we like it and it took 2 years to get this way. It's on only 7 years old so maintenance is slight and negligible so far.
We will consider moving to a smaller house in the area after hearing what you guys wrote about downsizing. It would hurt, but I guess we could do it. We'd be "stuck" in a townhouse for the prices we're talking about $500-550K. Single family houses for that price in this area would need a lot of work and would be very old. I know, it could be done if we had to. Our cats have really become attached to the new house, too.
)Other monies I didn't bring it up yet ... we have $85k in a money market (that was $123k a year ago in 5 American Fund mutual funds till the financial melt down that affected most of us). We stupidly, insanely converted it to a money market when the stock market hit 6500 (and they're value went down to $85k - we panicked like fools, and took our money onto the sidelines on the advice of our money manager lady at Wachovia in case it still kept going down - it was in a free fall so it seemed) so we never got the advantage of the bounce back in the market on it's way back up to 10500 point on the Dow. Arghhh! I can be so stupid sometimes. It's just sitting in this money market at $85k, not growing at all, our only emergency fund other than $35k in our checking account that keep going down each month by $2k or so due to my hopefully temporarily reduced income.
That's why I thought dipping into our 401K would be a "great idea" to pay off the house early but you folks have strong opinions against that and I see why. My great ideas aren't always so great as you can see.
I thought about refinancing about a million times the $116k we owe, but we've only got 11 years to go now on our mortgage. Refinancing and going to ... gulp, 30 years? Eegads. That would mentally suck, regardless of how quickly we could one day pay it off if we get some lump sum or better job. If we don't get a lump sum some how over the years, we're stuck paying a mortgage, albeit small, till I'm 79. I can't see doing that.
Here's where I'm at... if we can swing paying off the house with the 993 sale money and another $86k from somewhere (a smaller amount of $40k from the 401k maybe and $46k from the money market?), we could keep our house and only pay $523 a month for it. That's taxes of $9800 a year equals $817 mo, + $115 mo for property insurance = $932 mo. + $391 for utilities mo. = $1323 mo, minus the rental income of the carriage house above the garage of $800 month = $523 mo payout to live here. $523 a month would be cheap to live in this house. Is that logical?
It is such a royal pain and expensive proposition to move. We love the ability to walk into town in 5 minutes to hit many, many stores. Our friends our out here in this area. Your thoughts on living in a condo are dead on. Very close to the neighbors, they might smoke and make our living area smelly, or they might be noisy and we'll be hating life. Apt living is a thought, investing out money from the house, but with my current income we wouldn't even qualify to get a nice 2 BR, 1 Den place in this area ($2900 mo), even if we are sitting on $700k in cash from the sale of the house.
But man-o-man, I'd miss my car. Maybe, eventually, I could hit the job lottery and buy another one but truly, I doubt it. I know, no one NEEDS a 993. To save up $35k again, I don't see it happening. I bought my last car with inheritance money from my grandfather and the rest went into buying this house. There won't be any more inheritance money.
I really appreciate your astute suggestions. I can't tell you how much this is helping me come to a decision. About buying a beater as a daily driver that's more reliable than a 9 yr old BMW, or a new or almost new Volkswagen TDI that gets crazy great mileage, I will consider that too. I can't imagine life without my 740i. It's hard to explain unless you drive one everyday and you're a BMW E38 7 series lover. I'd only get $8500-$10k for it with 100k miles on it so it seems like a waste to sell it at the bottom of it's depreciation curve but I know the maintenance will be high in time again. Lately it's been reasonable. That won't last.
I'm one stubborn SOB, I know.
03-07-2010, 10:33 AM
#21
Three Wheelin'
Do the refi to drop your monthly. When things pick up, you can always pay down the principle with a higher payment if you like. That will get you through the tough times and you can get back on pace when things turn.
Sell the 993 and use those funds to pay the reduced mortgage for the next couple of years.
Sell the 993 and use those funds to pay the reduced mortgage for the next couple of years.
03-07-2010, 10:34 AM
#22
Rennlist Member
I should have clarified, our house is "only" 3800 sq feet on the first and 2nd floor, but with the basement and accessory apt above the garage added in, that makes it 6000 sq feet (5900 ft plus 278 ft for the apt above the detached garage). It's not really THAT big .
.But who is anybody to tell you how to live.
But you did state in an earlier post...
You're proud of your baby, you love this car to death, you can't imagine life without it, it's part of your "image".
03-07-2010, 10:52 AM
#23
Rennlist Member
Thread Starter
Even then...3800 sq. ft. for two people and an occasional overnighter?
But who is anybody to tell you how to live.
But you did state in an earlier post...
I really hope that no part of your life is about "image", because if it is, you are living a life for others...and paying for it.
But who is anybody to tell you how to live.
But you did state in an earlier post...
I really hope that no part of your life is about "image", because if it is, you are living a life for others...and paying for it.
03-07-2010, 10:59 AM
#24
Rennlist Member
I haven't read all the replies and I'm no financial expert, but property is property and long term always increases in value. A car, well unless it is a LeMans winning 917, they go down in value.
I'd sell both cars, buy one reliable low maintenance Camry or Accord (as boring as they are) and use what is left as a buffer in the bank.
Its tough to cut back when you don't know how. I once lived on powdered milk and macaroni dinners between graduating and the job...and that was in my mid-thirties.
03-07-2010, 11:01 AM
#25
Rennlist Member
Refinance!! Refinance!! Refinance!!
When your fortunes turn, you can always pay more principal and shorten the pay-off time period and therefore also the amount of interest paid. You CANNOT borrow money to pay for retirement. If you touch those funds, they are gone!!!
I suggest this based on your previous career successes. Based on your relationships and reputation it sounds you should be able to increase your earnings again as the economy and job market improve. Everyone is hurting right now. What people here are suggesting allows you to decrease your monthly obligations, while AT THE SAME TIME still allowing for you to pay-off your debts by their pre-refinance time period because there are no pre-payment penalties.
When your fortunes turn, you can always pay more principal and shorten the pay-off time period and therefore also the amount of interest paid. You CANNOT borrow money to pay for retirement. If you touch those funds, they are gone!!!
I suggest this based on your previous career successes. Based on your relationships and reputation it sounds you should be able to increase your earnings again as the economy and job market improve. Everyone is hurting right now. What people here are suggesting allows you to decrease your monthly obligations, while AT THE SAME TIME still allowing for you to pay-off your debts by their pre-refinance time period because there are no pre-payment penalties.
03-07-2010, 11:06 AM
#26
Burning Brakes
This is a decision only you can decide naturally but what is the most important thing in your life at 49 years of age besides your family? Is the house really that important or would you rather downsize BIG TIME to keep your 993 and be mortgage free? Unless your wife is adamantly opposed to serious downsizing I would do just that and keep your cars. Cars are very important to you obviously and to sacrifice the wrong thing at your age could be a critical mistake. You may NEVER make big $$$ again and buying a quality 993 may never be financially feasible again. Sorry to be dramatic but it may be true. You own the 993 now free and clear and I would never sell it for a quick fix. Too many 'other' things to cut back on, even moving to a less expensive area. I retired from FL 8 years ago with next to nothing except my state pension at age 49 (same age as you) to move to a very inexpensive area here in NC where there are driving roads that go on forever and a cheap house to live in. I still have a small mortgage too. My wife was the key to the situation. She is 100% with me. Life can become too short at our age to deny yourself the important simple pleasures. I have NOTHING in the bank yet I have a 993 and I'm happy. Would I rather have $30k in the bank. Absolutely NOT! Life is for living now. Others feel quite differently and have to have their entire lives platted out. Now you have to decide and hopefully your family will be with you. Good luck!
03-07-2010, 11:19 AM
#27
Drifting
I would decide whether your situation is temporary or not. If you think you will be earning more money in the next year then you might make a different decision than if you are thinking this is long term. With your equity I wouldn't suggest selling the house (assuming it would sell for a reasonable price nowadays) but the $9800/yr in property taxes gets me (is this right? Yikes) . If downsizing or relocating reduces your property taxes significantly I think this is worth thinking about especially if you think your situation is long term. Other ideas probably already said here:
- Refinance your house temporarily - will this get you where you want to be?
- Line of credit to bridge you until you get a better job
- Sell 993 - won't help alot but you will have reduced insurance and expenses. The $$ could bridge your finances if you think your situation is short term
- 740i - not worth much but probably a big maintenance liability
- 401K - last resort
03-07-2010, 11:35 AM
#29
Racer
Join Date: Mar 2002
Posts: 252
Likes: 0
Received 0 Likes
on
0 Posts
Sell the 993. Cars are a luxury. Plus you can always buy another. Sell the BMW, too. Maybe get a new appliance type car that you lease (or buy.) It'll have a warranty and be trouble-free and overall less expensive.
Then downsize if you think that will make you feel better. You could keep the house and focus on making the mortgage either through a refinance or a simpler lifestyle. After all, the house will retain value. You can always sell it if you change your mind. Plus your situation can always change; don't expect it to be like it is now for eternity.
I've been there, done that. What I discovered is that life is more than ownership. It's interesting to realize what we can do without. Living life stress-free is way more important than having material things. We tend to think that owning things is what brings satisfaction and contentment in our lives. I spent five years of my life owning nothing and simply just living. It was out of choice. And it was a revelation. A complete liberation.
It made me enjoy simple things. And yes, I have since bought some expensive things. But I'm now keen on what they really are: possessions. They don't make my life necessarily better. They don't make it worse. They are just there. But I know the minute they create stress, then they are making my life worse and they will be the first things to go.
Think of this as a good point in your life. It's allowing you to get a perspective on things and make choices for yourself and your partner. Perhaps you can see life differently and realize it's not about possessions. Please don't get me wrong, I'm not implying that you're materialistic at all. But there are times in our lives that allow for reflection.
A friend of mine is a photojournalist. He travels the world. He is single and his belongings fit into a suitcase. He's the happiest and most content person I know. He is utterly stress-free and loves his lifestyle. He has money in the bank for when he decides to stop traveling, maybe get married, and/or gets too old to work. He once told me that making a lot of money was too much of a burden for him. That was because with a lot of money, he would buy big houses and cars and get bogged down and be what he called "addicted" to, and dependent on, making more money.
I don't mean for you to be that drastic, but downsizing one's life can be a positive thing. Maybe try and see all this as positive. Living stress-free as possible is key to a successful and healthy life. A quiet walk in the forest can be as enjoyable as a drive in a 993. And much cheaper and perhaps more real. Want can create stress. Want is artificial. There's no real reason to want anything other than food, shelter, health, and love. We actually don't need much to live comfortably and happy.
Good luck with your decisions. And think positive! Maybe this is a new beginning.
Then downsize if you think that will make you feel better. You could keep the house and focus on making the mortgage either through a refinance or a simpler lifestyle. After all, the house will retain value. You can always sell it if you change your mind. Plus your situation can always change; don't expect it to be like it is now for eternity.
I've been there, done that. What I discovered is that life is more than ownership. It's interesting to realize what we can do without. Living life stress-free is way more important than having material things. We tend to think that owning things is what brings satisfaction and contentment in our lives. I spent five years of my life owning nothing and simply just living. It was out of choice. And it was a revelation. A complete liberation.
It made me enjoy simple things. And yes, I have since bought some expensive things. But I'm now keen on what they really are: possessions. They don't make my life necessarily better. They don't make it worse. They are just there. But I know the minute they create stress, then they are making my life worse and they will be the first things to go.
Think of this as a good point in your life. It's allowing you to get a perspective on things and make choices for yourself and your partner. Perhaps you can see life differently and realize it's not about possessions. Please don't get me wrong, I'm not implying that you're materialistic at all. But there are times in our lives that allow for reflection.
A friend of mine is a photojournalist. He travels the world. He is single and his belongings fit into a suitcase. He's the happiest and most content person I know. He is utterly stress-free and loves his lifestyle. He has money in the bank for when he decides to stop traveling, maybe get married, and/or gets too old to work. He once told me that making a lot of money was too much of a burden for him. That was because with a lot of money, he would buy big houses and cars and get bogged down and be what he called "addicted" to, and dependent on, making more money.
I don't mean for you to be that drastic, but downsizing one's life can be a positive thing. Maybe try and see all this as positive. Living stress-free as possible is key to a successful and healthy life. A quiet walk in the forest can be as enjoyable as a drive in a 993. And much cheaper and perhaps more real. Want can create stress. Want is artificial. There's no real reason to want anything other than food, shelter, health, and love. We actually don't need much to live comfortably and happy.
Good luck with your decisions. And think positive! Maybe this is a new beginning.
How your wife feels about all these issues is half the equation and it's difficult to provide advice without knowing more about that.
My only take is that a 6000 (or 3800) foot house is a really, really large place and most couples/small families would be much better off with something half the size, or smaller.
Living with significant financial stress is no way to live. Best wishes to you.
03-07-2010, 11:40 AM
#30
Race Director
ok, i read the rest...and this is not gonna be a pleasant post, but quite frankly you need a kick in the ***.
The 993 needs to go asap. As I recall it needs either an SAI flush or more likely a topend. Dump it.
The bimmer? Nice car, but if you are struggling with a mortgage, that needs to go.
Wife's car? Unless its a lease, dump it.
So, now you've got $40k in cash from the sale of the 993 and bmw.
Buy yourself a well used but well maintained Ford Crown Victoria. It has zero style, but it rides great, is reliable as a stone, and makes driving around DC a piece of cake. This should cost no more than $5k.
REFINANCE THE HOUSE. Get over the mental block of thinking that you'll be 79 before its paid off. Who cares? Right now you need to lower your cash outflows and this is a great way to do it. If you get a higher paying job later, than you can move forward with paying it off early.
How anyone is suggesting that he mess with his house for a car, I cannot even fathom.
There are THOUSANDS of 993s and they are not that expensive. In a few years when you're in better shape and you've saved some cash, get a 96 C2. The experience won't be any different.
You need to face hard facts here. If you cannot afford your mortgage, you have absolutely ZERO need for an older maintenance heavy bmw luxury car or a Porsche sports car.
The 993 needs to go asap. As I recall it needs either an SAI flush or more likely a topend. Dump it.
The bimmer? Nice car, but if you are struggling with a mortgage, that needs to go.
Wife's car? Unless its a lease, dump it.
So, now you've got $40k in cash from the sale of the 993 and bmw.
Buy yourself a well used but well maintained Ford Crown Victoria. It has zero style, but it rides great, is reliable as a stone, and makes driving around DC a piece of cake. This should cost no more than $5k.
REFINANCE THE HOUSE. Get over the mental block of thinking that you'll be 79 before its paid off. Who cares? Right now you need to lower your cash outflows and this is a great way to do it. If you get a higher paying job later, than you can move forward with paying it off early.
How anyone is suggesting that he mess with his house for a car, I cannot even fathom.
There are THOUSANDS of 993s and they are not that expensive. In a few years when you're in better shape and you've saved some cash, get a 96 C2. The experience won't be any different.
You need to face hard facts here. If you cannot afford your mortgage, you have absolutely ZERO need for an older maintenance heavy bmw luxury car or a Porsche sports car.