Steve 96C4S

I hate to type this post, and am putting myself out there more than I really want to, so please take it easy on me. In much better times, when I was kicking a** at work, we bought a house (2 1/2 years ago) that was maybe more expensive that we should have spent. I've been the top salesperson at my cable company each year for the past 22 years so we "went for it". We sold our old house in Silver Spring and moved to a prettier area in Gaithersburg, MD. Hindsight is 20-20. My high paying job was eliminated 3 months after buying it. We put about 80% down on it though, so it could be worse. I did take a marketing position at my company when my old position was eliminated but the pay is a trifle of what I used to earn. At least I kept my benefits and time on job, for now.

So here's the scenario: Let's just say, that the economy was crushing you and you needed the money from the sale of one of your cars. Also, let's just say that you were downsized at work and were now making 1/3 of what you used to make, and that it's lasted for a whole year. You've looked for a new job almost every day for about a year now but nothing has panned out so far.

Also, let's say that you're in sales and would use your car for work every day on sales calls all over town. Is this starting to become a no-brainer? You wouldn't keep your 993, right? You'd keep your daily driver, which happens to be a 2001 BMW 740i Sport. The Porsche is a pain to drive all day, every day, day in, day out, in good weather and bad, winters included, to drive downtown in DC traffic or out in the suburbs, hitting monumental back ups on the beltway during rush hour, coming and going. And, your 993 is a 6 speed, not a tip, so it's constant shifting.

But, lets say you're hellaciously attached to your 993 so it would make it very tough to sell. 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", you enjoy driving it to no end, but you have to be a responsible family guy, too. Dammit man, you're in a hell of a quandary, aren't you. Feeling queasy? Kind of sick to your stomach at the thought of parting with your sports car you dreamed about as a kid?

But in the end, you must be fiscally responsible, and selling your 993 makes the most sense if you do have to sell one of the two. It's not like you can carry your friends (plural) in your 993 or pile in a bunch of stuff (big stuff) from home depot or BB&B if need be.

This totally sucks. It hasn't happened yet, but I fear it's getting closer. Here's the deal - We can't afford our mortgage payments anymore so we rented the space above our garage for $800 mo. That helps, but not enough. It takes us from $2133 mo to $1333 a month (plus the higher gas and electric expenses that our renter causes us). I know, it's pretty cheap money for a nice house in the suburbs, but we're not making ends meet.

We've cut back as best we can but we're still going into savings each month just to pay our bills (some heavy medical expenses each month and simple living expenses). With my terribly reduced income, my lovely, wise, and oh too practical wife thinks that having a 3rd car (yep, you knew this was coming) is ridiculous when we can't even pay our bills so selling it would be a huge help. And, she said, we wouldn't have to pay the insurance and maintenance on the car anymore. (ughh).

We owe $116k on our house, (sorry to be so financial but...) we have about $300k in our 401k, so she thought we could sell my car for the mid to lower $30k's, take $86k out of our 401k, and have the house paid off - that huge burden relieved. We'd still owe $1323 mo (taxes, utilities averaged out over 12 months, and insurance), but the principal and interest part for the 11 more years we currently owe on it would be done with.

Or, I could sell the BMW and keep the 993. I'd only get about $10k max for the BMW instead of in the $30k's for the 993, but I'd get to keep my beloved 993. The responsible thing to do would be to sell the 993. The "7" is much more comfortable to drive all day and in bad traffic. I did have the 993 for 7 years and got my money's worth out of it. (But will I have to give it up kicking and screaming like a little child? You bet!)

If I could have found a high paying job like I used to have in this past 11 months, we wouldn't be sunk like we are now. I've spent countless hours searching job boards, sending out resumes, redoing my resume 4 times, doing interviews on the phone and in person, getting rejections emails, getting job offers that I decided wouldn't pay high enough in the end to make it worth leaving my current company of 23 years, etc. A total drag overall. I had 6 interviews alone with one company last month that if it worked out, would have solved all our problems. The one manager said he's love to have me on his team. In the end, they hired someone else instead. I was fairly devastated but I pressed on the next day with more interviewing. Life could be worse. We could be living in a tiny little apartment in the bad side of town, or live in Darfur, Haiti or under a building hit by the earthquake in Chile but I guess that's a silly analogy.

Option #3 is to move to a small condo in Bethesda (we looked at 4 today), totally downsize our lives, (going from 6000 sq ft to about 1500 sq ft), getting rid of half our furniture and possessions in the process. I don't think I'm ready for that yet at 49 years old but I guess it's an option. If we did that, we could sell our house, end up with $100k or so in the bank, and buy a $500k condo for cash. But, we'd still end up paying $1400 a month in condo fees (including the taxes) so our monthly outlay would be similar. And, it's almost impossible to find a 2 BR with Den condo or 3 BR condo for $500k in a desirable area. They're more like $750 - 900k believe it or not, way more than we can afford.

Back to the original q -
Sell this:


or this:


So we can keep this:


or keep both cars and end up somewhere much smaller like this, a condo in this building (no place to wash my car, though - I'd have to use a car wash):


Thanks in advance (and for those actively searching for a C4S, I'm not selling it just yet so hold off on the PM's - it's too depressing getting them till I'm ready)

Steve R

chaoscreature

Wow, that's quite a dilemna. You speak about the house like it's just a burden, while you obviously love your cars. I would downsize, pocket the money and keep the cars but you really need to make this decision with your wife

logan2z

Hey Steve,

Really sorry to hear about your situation. As much as it pains me to suggest it, I think the 993 has got to go as there is really no way for you to justify having a 'toy' car at the moment. You can always get back into another 993 as soon as your financial situation allows it. Not the answer you want to hear, but it sounds like you already know it's the right one. Best of luck.

ilko

I feel for you Steve. It's a tough dilemma, the biggest problem is that if you sold the Porsche your financial problems still wouldn't go away completely and you would still be tapping into your savings account every month.

I don't see how moving into a condo would solve anything since you will be paying maintenance up the nose every month. The other thing is that you can't choose your neighbors in those buildings. For those two reasons I would never buy an apartment. I've been renting in NYC for ever and in the long run it's much cheaper. Equity my ***! After all the maintenance, depreciation, and repairs you do to an apartment you're still upside down.

Have you thought about moving to a different area where you'd have better prospects in your line of work and a better quality of life?

993Brendan

Steve- sorry to hear things continue to be difficult for you and your family in this economy. We've never met, but I feel like I know you as your car was one of the first ones I fell in love with when I started surfing Rennlist 7 years ago.

A few thoughts...

1. You don't really owe that much on your house, yet your payment is pretty high. I'm assuming this is because you have a 15 year mortage and not a 30 year. Ever thought of refinancing to a 30 year loan? Between that and the renter, you could get your monthly payment down to next to nothing. If things turn around down the road, you can make some lump sum payments to get the house paid off quicker.

2. Have you ever thought of unloading your 740 and your watch in lieu of the 993? I know you are a pretty big watch guy (and I love your watch, which is why I remember it), but if I had to choose between some bling on my wrist and a 993 in my garage, it would be a no brainer for me. I do admit I would miss the pics of your watch in front of various objects

3. If the refinancing option in #1 isn't attractive, I would definitely consider downsizing your house. I know location was important for you with the new house, but seems to me you could definitely find something a little more conservative for less money in the same area. 6,000 square feet is an insane amount of space for three people. I should also not that my family of three lives in a 1,700 square foot house at the moment, so I'm just jealous!

4. The 993 has always been a point of conflict for you and your wife. Whenever you guys have run into a financial issue, whether it be your ablility to take trips to buying a new house to exceeding your yearly maintenance allowance, your wife is always quick to put the 993 up on the chopping block. If you sold it, what would be next to go if things don't turn around? Would you resent her for making you sell it? I think it would make her very happy to see it go, but would you really be happy?

Best of luck to you whatever you decide- sorry things have yet to turn around for you.

Brendan

kjr914

Steve,

Sorry to hear your predicament. If it makes you feel any better, I can name 5 friends who are in the process of foreclosure, short-sale or outright bankrupcy due to a house they bought a few years back. Not to mention 2 close friends who've been unemployed for about a year now. Luckily, you're not in either of those 2 situations.

It sounds like you've come to your conclusion, but the final admission is a bit painful. By the nature, tone and length of your post, you've thought hard about this, debated, stressed and worried about it all and it seems to be dragging heavily on you. While the loss of the 993 is tough (OK, it outright F***ing SUCKS!), ridding yourself of that stress will be worth it.

Don't touch the 401k. By the time you pay the penalty and taxes on the money, it isn't really worth it unless its your very last resort. Besides, you're just cheating yourself out of your retirement...

Keep in mind, you've got a "lovely, wise, practical wife" that will understand when its time to buy the next 993! Believe me, this is NOT your last Porsche. You have the disease, it will not go away...

Robert Collins - 96 993TT

I am a Certified Planner, but I will defer to Brendan and Keith as I think they covered it all.

Sell it, use the money wisely.

Don't buy a condo, you won't like the crowded nature of it.

Keep the house, refinance it. The beauty of refinancing now is that your payment goes way down, but when you come back into a good job or money in hand, you can always pay lumps sums of principal down.

You have a beautioful 993 now, but there will still be beautiful examples when the time is right to purchase one again. Who knows, maybe you will try a new color or a TT or a cab?

Good luck in your decisions.

jlb_94611

Selling your 993 will bring in a decent amount of cash. These 740 sedans are beautiful automobiles however .. you're not a diy-er ...and these things have a track record of cooling issues and other $$$ maintenance items that pop up. I recently had a coolant and oil leak under mine which needed $1200 to resolve. If I were you I'd sell the 740 also and get something reliable that would enable you to travel for business/pleasure with no surprises.

aggravation

$86k from 401K account (minus the tax penalty if there is one) + $30k from Porsche to eliminate mortgage payment.
or
refinance the mortgage and use the 401K money to get your mortgage reduced to $30k instead of selling the car that leaves you with a monthly payment of $161 per month at 5% for 30 years.

Personally I think taking the 401k money is a very bad idea unless you happen to have way more in there than the two of you need at your age...unlikely since you live in an expensive area $300,000 in a retirement fund is a good place to be at your age, cutting it by a third (figuring a penalty for early withdrawal) isn't so good. I'd start looking for a short sale or foreclosure house in a neighborhood you can survive in that will cost little to nothing after selling the monster house you are in and keep the car.
Having $300,000 in retirement fund, a nice1700 sq ft. place, $100,000 in the bank, no mortgage, a lovely wife and a 993 isn't a bad place to be compared to having 4000sq. ft. more and going down the drain rapidly! so sell the bmw, buy a honda beater, sell the house, buy a distressed property at a bargain and put anything left over in the bank from the 4000 sq. ft. you give up.

Of course selling a house right now isn't easy to do, I've got one 3 blocks from the beach in good condition that started at $329,000 and now, a year and a half later it's still for sale reduced to $229,000.

first thing to do is find out exactly how much you can cash out of your mortgage if you just refinance it and decide if you want to use that to supplement your income until you find a better job, usually you can get around 75% loan to debt ratio

goofballdeluxe

Unless you have more kids than the Brady Bunch, who needs a 6000 sq. ft. house?!?

Canyon56

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.

Monique

Tough time for you.

My opinion: pay off the mortgage.

Have you heard of anyone who is rich with a debt??

Then you have a roof over your head; this is the top priority in my view.

Academictech

Hi Steve,

Kept up with your postings for awhile. Ended up getting my 1st 993 C2S then parting ways with it within a year for reasons financial. Hated parting with it but other things were just more important. Bought my second 993 C2S less than a year later, and after just a few months of ownership, sold it to help a friend out who needed the $$ quick. Now here I am less than a year later and know that I'll get another one sometime very soon. In both cases, I kept my daily driver because it was inexpensive and reliable.

There are lots of these cars for sale in good condition around the country. Not too many 993 owners who don't love their ride and maintain it better than anything they've ever owned.

If you can hang onto it, you should. If you have to sell one of the two, I'd sell the 993.

AND...if you're looking for a no-hassle sale....just PM me...missed out on buying Ginger by about an hour!

Good Luck!

Bart

timothymoffat

Steve, you've been thinking about this for a LONG time. It's easy; sell the 993! I'd say sell the BMW too but it ain't worth it.

When you are considering selling your home as opposed to your car, it's a no-brainer. YOU AND YOUR FAMILY CANNOT LIVE HAPPILY IN YOUR 993!

Sorry to say, SELL THE PORSCHE!

Sifly

You could sell the 740 and buy a more economicl run about like a VW TDi