Different people, different priorities.

I live in the south USA. I know of two places I laugh everytime I pass. One is a little falling down, ramshackle house, eaves rotting, trash and old junk all over the yard, grass uncut and a brand new corvette in the lean to. The other is a cheapest smallest mobile home you can get with another new vette. There are examples everywhere.

Personally, even if you can't afford both and choose to live in a cheaper house, at least take care of it like you do the car.

I live in a nice place, not extravagant. I choose to not live in a half million dollar house, and spend my extra money on my shop and cars. And watches and knives.

When you aren't rich, but like nice things, you have to make choices.

 

The first scenario is someone realizing they will never be able to afford a nice big home so they buy whatever degree of luxury they can afford in the automotive sphere. The second scenario is someone who likely got wealthy enough to buy a nice big house by realizing that "investing" large sums of money in depreciating assets like cars is ridiculous. I know a guy who is worth probably in the high 8 or low 9 figures and I have never known him to buy a new car of any sort. Sure, he will buy a Mercedes, but only two or three years old after someone else has taken a big depreciation hit. He then drives it into the ground as far as I can tell. I remember his kids drove old Toyotas when they were in school. while their friends had new Porsches. He also bought his home at probably a 50% discount from a bankruptcy auction about 25 years ago. Financially, he is my spirit guide.

 

That should be the best option if asked. I like my space so I rather have a big house. Besides what happens if the car deveops a fault or get bashed or something...
Big house then a nice poartable car which will definitely drive on the same road as the big car and cover same distance too...

 

I am that guy (to a degree). I don't live in a trailer park but I live in a modest house on the "wrong side of town". When my wife and I were deciding how we wanted to live, one of the first things we decided was that we didn't want a large house to maintain and keep clean, nor do we want to impress anyone by how fancy we could live. Another thing we agreed on right from the outset was that we both loved cars and driving so our car budget was always planned to be disproportionate to our mortgage in traditional terms. I've had a lot of cars that might seem incongruous with the neighborhood, like a Lincoln Mark VIII, SVT Cobra, Camaro SS, Corvette, Boss 302 but this is what works for us. It maximizes our pleasure for our budget. My personal mantra is that "if I had all the money I've ever spent on cars, I'd spend it all on cars".b-)

Another side benefit to this arrangement is that I LOVE MY NEIGHBORS. Most are long term residents that all know each other and get along extremely well. It's not unusual to see neighbors from three or four different homes chatting on their front lawns or porches (and some wine or beer might be involved there as well). The lady across the street is living in the house her parents built in 1955. I bought my house from the daughter of the original owner. My neighbor next door told me that he knew we would get along right from day one when I moved in with seven cars, including a '64 Continental, '67 Chevelle and '79 Lincoln Mark V. My neighbors on the other side put their house up for sale when they were expecting their second child and a few days later, the for sale sign came down. I asked him if he had sold their house. He said that once they started shopping for a new home, they realized that they could buy a nicer house but they could never replace the sense of community that we have in our little area. They removed the listing and rebuilt the inside of their house. That child they were expecting is now going to high school.

I've lived in the "right" part of town and I wouldn't want to go back there. My wife and I are discussing some major changes to our house because the house itself is old and small but the thought of moving away from here is not even part of the discussion.

 

My personal mantra is that "if I had all the money I've ever spent on cars, I'd spend it all on cars".b-)

I'm going to use that quote a lot. That's EXACTLY how I feel about cars.

 

I know that in Thailand people love fancy cars, they'll suffer in a tiny flat but drive a nice BMW or Corvette. Not sure if SE-Asia is more particular about that but I often travel to Myanmar on business and from what I've seen, cars are kind of a way for people to show off. When 90% of the cars are old Japanese imports that have outlived their usefulness in their home country, you can really turn some heads driving a nice sports car. I suppose that you'll have very few chances to impress people with your house, so a car is a better way to appear well-off. Well, I'd assume that there are those kinds of people in every country, I know the Chinese are fans of buying upscale cars as well. Perhaps it's just a way for people in developing countries to say that they've "made" it.

There are also those that just love cars and they're happy just having a basic place to live and sleep. I had a mate whose dream was to buy a Lotus, he worked several jobs and lived in a small flat in a cheaper part of town, just saving up like crazy for years.

I suppose it's all about priorities and what you love out of life.

 

For me it has to be a fancy ass house as i love my home & in a nice area.....Cars come and cars go...i feel your home is where your heart is....

 

Kindof this...

my my wife and I struggled for many years. No cell phones, no cable, no internet at all. Couldn't afford it. The cars we drove were gifts from our parents (and they were old). We lived with our first son at my dads house.

so early on, we decided we'd never, ever live above our means. We would always live below our means, assuming just one salary (mine). As our life changed, we were able to afford more.....so our FIRST decision was our house. Not cars or watches. We wanted to be able to bring our kids up in a nice area with a good school district. We busted our horns, and made it big......

so we chose a nice house over a nice car. We were the nice neighborhood people with the beat up 180,000 mile cars in the driveway. Then, for safety of driving our family around, cars became the second priority. Never were our choices about impressing anyone, period. They were choices we made based on our family (our first apartment was outside the train station overlooking the tracks....the number of drug deals and gunshots was alarming to say the least, and when your car dies as you are driving with your children in the back......you make decisions based on safety alone), and the safety of all of us.

So, early on we had neither the house or the cars. Then we moved to an upper class neighborhood with the cr@ppy cars. Now we have the nice house AND cars. I'd do it exactly the same way again. .......

 

Cars depreciate. House appreciate.

 

I wish I could agree. Currently sitting on a condo worth $290k that I paid $365k for in 2006.

 

I live in Manhattan. Around here and the other boroughs there are certain groups that drive nice cars and live in the projects- no impressive at all. There's a term for that that I cannot say in these forums. I only find it irritating when they're not humble about it or try to show off. It's not impressive at all and personally I find it pathetic especially when they think they're big shi...

I drive a very nice car and live in a nice apartment as well. I think it's only "impressive" if you have the full package. I work with someone who wears designer shoes and belt with the pattern so that you know it's designer (Gucci, Burberry, etc), yet wears a fossil watch... I've met people that would drive a Mercedes AMG (for example) and wear an Invicta...
For me, it just doesn't work.

 

To each his own........

 

Its like any "Rolex or Omega" thread..... the obvious answer is that you should get both.

I do admit to being a little puzzled by big boats parked next to houses barely bigger.... especially when it never seems to leave the trailer, but to each his own. Its actually a somewhat storage question to raise on a site where people have admitted to owning watches worth more than their car.

On a side note, I can relate to the point several have raised about the value of a stable older neighborhood and have been fortunate to have lived in one while my son was growing up. Since then I've also found that the one thing better, and I mean a lot better than having really good neighbors is having no neighbors. I built a house on six acres 10 years ago and love it.

 

Car are just used for sometime but house last forever.

 

Also, why do people living in older affluent neighborhoods drive around in Camry's and Honda's when they clearly have the money.

Every car made in the UK, Italy or Germany during this century has been garbage compared to what Honda and Toyota produce. The smart money is on reliable cars.

If you own a Merc, Jag, RR, Bentley, Lambo, some other VAG product, BMW, Ferrari, some other FIAT product, etc. let's hope you know more about watches than cars.

The correct answer is small house, no car if at all possible. The smaller the house the less there is to clean, heat, cool, and maintain; not having a car means no depreciation, no wear and tear, no repairs, no insurance.

 

Every car made in the UK, Italy or Germany during this century has been garbage compared to what Honda and Toyota produce. The smart money is on reliable cars.

If you own a Merc, Jag, RR, Bentley, Lambo, some other VAG product, BMW, Ferrari, some other FIAT product, etc. let's hope you know more about watches than cars.

The correct answer is small house, no car if at all possible. The smaller the house the less there is to clean, heat, cool, and maintain; not having a car means no depreciation, no wear and tear, no repairs, no insurance.

Porsche.

 

When I was younger, it was all about the vehicles. At one point I had a 2500HD, TBSS, 97 Cobra with a supercharger, and a turbo 99 Trans Am......after some swapping I had a GTO, 335i, ZX6R, etc....

Now I would not say that I live in a mansion or anything, but I am happy with where I live. A little land, room for the family, etc....and most of the vehicles have been sold or traded. Cars will come again in 6-12 months, but for now the focus is on the "dad and husband" priorities.

 

It's all about priorities. I read an article a long time ago how people (guys mostly) will spend 2k a month on a leased car and live in a small studio apartment. When I was younger that sounded great. I see the error of those ways now. I'd rather have the nice house and if I can, a nice car. It makes much more financial sense to do it that way. I work in a very affluent town and I drive past huge, multi-million dollar houses and in the drive way are 30-40k cars. I'm sure they can afford better, but why?

If you get a chance, read a book called "The millionaire mind." The book wasn't what I expected, but it help put things into perspective. Basically it talks about people who are worth millions and how they maintain that by driving "cheaper" but more reliable cars and reupholster old furniture to avoid unnecessary costs. It's a very interesting read. Check it out.

 

It's all about priorities. I read an article a long time ago how people (guys mostly) will spend 2k a month on a leased car and live in a small studio apartment. When I was younger that sounded great. I see the error of those ways now. I'd rather have the nice house and if I can, a nice car. It makes much more financial sense to do it that way. I work in a very affluent town and I drive past huge, multi-million dollar houses and in the drive way are 30-40k cars. I'm sure they can afford better, but why?

If you get a chance, read a book called "The millionaire mind." The book wasn't what I expected, but it help put things into perspective. Basically it talks about people who are worth millions and how they maintain that by driving "cheaper" but more reliable cars and reupholster old furniture to avoid unnecessary costs. It's a very interesting read. Check it out.

The following is my opinion and experience only, not meant to offend anyone. I enjoy people's posts and I can only hope that I can add a little to the watchuseek archives.
I haven't read any of the following posts, but I was going to add "The Millionaire Next Door" book. Basic summary, the most millionaires in net worth in the USA on average drive Toyota Camrys live in middle middle class neighbor hoods, work for themselves in service type industries like CPA accountants or plumbers, and wear Seikos. If one wants to be financially independent, then do what's necessary to get there. Avoid stealing from your future self. Why people live in "crappy" houses or neighborhoods, and have luxury cars, or have nice houses and economy cars is hard to answer in an opinion based world or WIS, but in a general sociological fun mind game activity, it comes down to a person's values of what's really important in life. Have fun now, live like their rich now, or live modestly now to live extravagantly later. The statistics show those who were millionaires didn't live extravagantly because in their words, never cared for that "stuff" anyway. In my humble opinion, houses, cars, watches are all in a state of decay and are like foundations of wood and straw, only to burn up in the end. If one can afford them (I mean, not sacrificing more important life requirements for them) buy them and enjoy them. Just know these things won't bring true joy.

I know a kid I went to high school with (small Midwest town, slowing rust belt economy) who went all in on a Lamborghini after landing an oil company job in Texas after working for a military private contractor in Iraq. He was always spending all his money on a bigger house and his car that required very expensive service. He was even in a Lambo club. He later lost his job, and was essentially broke with a huge car payment and mortgage. Classic grasshopper and ant fable.

 

When I was young, my family were poor. I hunted rats for the fur. I'd find used matches on the ground, sharpen them, and sell them as toothpicks. Those were hard times.

 

You don't get rich by writing checks. Leasing keeps you poor. Most "rich" folks got that way by making good financial decisions.

 

In Malaysia, we have a very high rate of bankruptcy among men aged 22-29. This is due to their spending habits and preference for fancy cars and expensive luxury items.

I have a friend who is working in retail, lives in a tiny one room apartment with his wife and two kids but drives a Jaguar XE. The Jag financing eats up 70% of his active income. This does not include petrol, road tax and insurance.

I heard he is surviving on credit cards and at last count, he has around 10 credit cards from different banks, most of them maxed out.

And surprisingly, this sort of behavior is the norm in Malaysia among the younger set. Malaysia is a place where the minimum wage is USD$250 per month and 75% of the working population are exempted from income tax due to earning less than USD$1,000 per month.

And it should be noted that Malaysia has one of the highest luxury tax in the world. Our cars are the most expensive in the world.

 

In Malaysia, we have a very high rate of bankruptcy among men aged 22-29. This is due to their spending habits and preference for fancy cars and expensive luxury items.

I have a friend who is working in retail, lives in a tiny one room apartment with his wife and two kids but drives a Jaguar XE. The Jag financing eats up 70% of his active income. This does not include petrol, road tax and insurance.

I heard he is surviving on credit cards and at last count, he has around 10 credit cards from different banks, most of them maxed out.

And surprisingly, this sort of behavior is the norm in Malaysia among the younger set. Malaysia is a place where the minimum wage is USD$250 per month and 75% of the working population are exempted from income tax due to earning less than USD$1,000 per month.

And it should be noted that Malaysia has one of the highest luxury tax in the world. Our cars are the most expensive in the world.

We had (still do but its better) the same issue for that same age bracket.

The central bank put rules in place to make sure you cannot get into debt past a certain percentage of your income and the govt opened a fund to help those in legal trouble with banks to restructure their debt and black list them for any more till its paid off.

Its helped.

There is no credit bureau where banks and finance company details are shared and available in Malaysia? That started here about 2 or 3 years back and has stopped the cases where people had 10 cards with 10 different providers.

Sent from my iPhone using Tapatalk

 

A favorite running route of mine takes me from the standard middle class homes I live in past a large, not so nice apartment complex. I have long noticed how the parking lot of the apartment complex has a disproportionate number of late model, expensive cars and trucks, while right across the road, the houses all have older cars in the driveways. The explanation I came to is that young people more eager to impress with a car live in the apartments, while older people with no desire to impress anyone live in the houses. Unless cars are a particular hobby or love, I would think that most people would eventually just learn the merits of buying a good quality car and running it to death before having to buy another.

 

The short answer is most people are dumb assess. I think older people realize that saving money is better than a new car when the one they own works while younger people do not have their priorities straight yet and are more concerned with impressing others by appearing to be successful.

 

After having bunch of cars and houses, I'm now in the downsizing camp. 1 last year of school for the boy then looking to downsize to town homes, Atlanta and Charleston. The missus and I like both cities and have business and family in both. We converted to Toyotas after blowing money on cars for years, our cars are paid off, trouble free, still look good and are fun to drive, little problems.
The big house is a pain to upkeep, new roof, new hvac, paint, yard work, new driveway needed, just on and on.
We spend a lot of time on the road so headed toward a little luxury after the move.
Not a choice of cars or house but could have more in either direction if wanted.....just a balance was good for us.
So after all of that, buy what makes you happy,priorities change.

 

There's really no making sense of it all, some people are just wired differently. An guy I know who has to be making 500k or more a year plus a healthy monthly car allowance finally traded his econobox sedan for a Buick of some sort. This week he had on a unique watch I didn't quite recognize... odd proprietary strap, maybe some AP or something I'm not in tune with...but then I got a better look, $35 Timex Ironman. I get it, he's not a watch guy but spring for a $150 Seiko or something. Brilliant guy, weird taste.

Yeah, I know, not really on topic, but the original puzzle is unsolvable.

 

As someone who drives a cheap car and lives a big house, I sort of do wish that I had a nicer car.

But someone who owns a nice car they can't afford is no different from someone who owns a nice watch they can't afford.
In the end, people have different priorities.
Obviously it's smarter in general to spend less on depreciating "assets," if you can even call cars that, but it is also true that driving a Ferrari is quite exhilarating.

 

People live very different lives, and have very different priorities, and this leads to very different decision making.

There are probably some trends that are common among these different groups bad house/good car vs good house/bad car.

Bad House/Good Car - I think most of these folks don't have kids. It would be difficult for most folks to compromise on the living conditions of their children while spending money on a very nice car. However there are plenty folks with no kids that do not mind very modest living accommodations. This then free's up some of their cash, and since we are human we want to spend money on things that make us feel good. Very nice cars can make people feel good. When they are driving around in their corvette, no one that sees them may know they live in a place that some may find embarrassing. They can drive around thinking "I am awesome, and all these people looking at my car think I'm awesome." A very nice house is a much higher expense to get this feeling, and also you only get it when you invite people to your house, not every day when you get in your car.

Good House/Bad Car - Trend is flipped for kids. For the typical family in the USA the "right neighborhood" is important. Often the right neighborhood comes with the right schools, the right neighbors, the right friends for your kids. Americans will spend an amazingly high percentage of their income to get the house they want because it comes with these other things. This contributed to the housing bubble and crisis of ~2008, it didn't matter how high prices got, people picked the neighborhood/house level they wanted, and they would pay whatever it took to live there even if it completely destroyed their finances. This is still a fundamental problem with housing in the USA, I'm not sure it will ever stop being this way. Spend every penny you have on your house and there is not much left for cars. This is probably some portion of the good house/bad car crowd. The rest is probably folks that understand the depreciating asset issue. At least a percentage of the money spent on an expensive house is an investment (you do not get your high real estate taxes back), however every penny you spend on a car is truly a penny spent. You don't get it back. People that understand this and are savers don't want to spend money on a nice car. For these people money in the bank gives them better happiness return than money spent on a car.

Very interesting thing happened with a family that lives down the street from me recently, upper middle class, guy is in sales, wife is a nurse, two kids, plenty comfortable but not rich. They had a for sale sign in front of their house but then a month later it went away. They told us they had their eye on an upgrade house, however when it came time to finance and they actually figured out exactly what their payment would be they decided they couldn't afford it. Two months later a brand new white corvette showed up in his driveway. People want things to help them be happy . . . .

 

 

In case it wasn't obvious - I'd take a small house and a nice car over a big house and a regular car any day.

A 'big house' is luxury too. i don't intend on having more than one or two kids. I don't need a big house - in fact it's wasteful when you consider how much extra a large house costs to maintain and heat and clean. Give me a modest house (in a decent area), with a reasonable yard... or heck - even a nice townhouse or larger condo plus a couple cars I actually enjoy driving any day.

 

I like my Honda. Would drive it even if I was super loaded.

 

Please don't drink and drive.