In response to my friend's post on Why Realtors Drive a Lexus.
I drive one and have for years, not for luxury but for the customer service I get every year. Now it is no where near the cost you described here. I drive the Rx350. The MRSP is 39,600, which is what I lease.
Matter of fact I drove the Honda 4 years ago to think about changing.
My husband who was in the back seat and only drives Honda's went with me for both test drives.
The Lexus was 15.00 more a month.
I looked at him and said "which one?" He said "are you crazy, the Lexus."
Again, it is all about the customer service I receive at Lexus of Ann Arbor. I work with Gerald Creech and he is the best.
In the Olden Days, people who bought Cadillacs were assumed to be financially well-off. And most were. Those who weren’t were quickly found out and thought to be nothing more than four flushers.
People who weren’t considered wealthy, if they bought a Cadillac, did it as a reward to themselves – they had just retired, and they thought it would be the last car they would ever own.
"Good job!" they said to themselves as they patted themselves on the back.
That’s not the case today. Many people, especially Realtors, feel the need to own new luxury cars if they want to succeed in their business.
The MSRP of a 2013 Lexus LS 460 Sedan is shown by the manufacturer to be $72,000
A lot of those buy them before they have even the beginnings of success, and struggle to make the monthly payments, with $5,000 down, often being as much as $1,400 or more per month for five years at which time they have no choice but to buy or lease a new one of at least equal value.
But what about a loaded 2013 loaded Honda Accord? The MSRP is shown by the manufacturer to be $33,500. With $5,000 down and financed for the same five year period, the monthly payments are about $500.
So let’s assume the Realtor picks the Honda
Honda Accord Sedan ===>>>
but saves the $900 a month difference between its payment and that of the Lexus. And she puts each of those $900 monthly savings into a retirement account.
Our Realtor is 35 years old and she continues this strategy until she is 65, when she retires.
If the money is invested in non-risk financial products, on her 65th birthday, even without one dime of earnings on this investment, she will have $324,000.
Conventional wisdom says she should be able to draw out $13,000 for every year for the remainder of her life without significantly reducing the original accumulated principal amount.
Wonder why a significant portion of America’s Realtors insist on driving luxury cars?
Especially when more than 85% of the retirees in America now live below the defined poverty line.
WILLIAM S. CHERRY AND NO COMPANY
America’s Wealth Coach