In 2020—on this very website!—I passionately argued against the typical American practice of a $550 car payment for the initial decade of one’s investment journey:
“In 15 years, you pull a big ol’ f*** it, and you buy a Porsche Cayenne. Great. You deserve it!
In the meantime, though, you’d invested $99,000, which turned into $172,000 thanks to compound interest.
So now we’re cruising down Easy Street in our Cayenne, and our $172,000 of Responsible Decision Money is compounding in the background. We’re done being responsible.
That’s fine. Your $172,000 will become $490,000 on its own over the next 15 years. (Assumes a 7% average rate of return.)
Do you see how insane this is? You can drive fancy cars for the next 15 years or have an extra half a million when you’re literally 55 years old. These decisions matter. This is not my opinion. This is math. You can have your Cayenne and eat compound interest, too. Just give it a minute.”
The article, titled “Why You Need to Sell Your Car (Maybe),” was delivered with my signature sassy style, clearly revealing my inner conflict: a desire to be financially responsible battling a love for finer things, symbolized by the Porsche Cayenne (and a passing mention of the Carrera). My younger self was determined to preach financial prudence, yet the allure of luxury hadn’t been completely subdued by finance podcasts and compound interest graphs.
This piece resonated with the broader theme within Personal Finance Car Culture, which often criticizes prioritizing “impressing others with possessions” over the pursuit of “financial freedom.” It leaned into the then-popular narrative of minimalist living and delayed gratification as the ultimate keys to wealth building.
In the years that have followed, the financial landscape has shifted, and so has my perspective. Many financial experts now advocate for “values-based” spending—aligning expenditures with personal priorities. However, a subtle hierarchy often persists, distinguishing between “acceptable” and “unacceptable” values. Luxury vehicles frequently land in the latter category, where the ultimate status symbol is portrayed as being “a millionaire who drives a Honda Accord” – an image of understated wealth and practicality.
Reflections After 3+ Years: A Car Wash 101 Perspective
Fast forward to 2023: I, the author of those frugal pronouncements, am now the proud owner of a 2022 Porsche Macan (yes, you read that right!). It felt necessary to pen a “car purchase” breakdown, especially coming from someone who once openly questioned such choices. This post explores how 2020 Katie was both incorrect and surprisingly accurate in her financial assessments, offering a fresh look at car ownership through a “Car Wash 101 Investors Tool Box” lens – essentially, a basic guide to evaluating car decisions with an investor’s mindset.
Decoding the Numbers: An Investor’s Initial Assessment
The sticker price of my Macan, complete with the “Premium Package Plus” and a mere 8,000 miles, was $58,995 – a sum that would have made my former frugal self gasp. Objectively, there’s no sound personal finance justification for a $60,000 car beyond the simple declaration, “I really wanted it.” Yet, true to the Money with Katie brand, I attempted to rationalize it, applying some basic investor tools to the decision:
- Income Percentage Analysis: As a percentage of my current income, this car represents the most financially accessible vehicle I’ve ever owned. Framing it this way provided a surprising level of comfort with an otherwise extravagant purchase. This is akin to an investor assessing asset allocation based on portfolio size.
- Certified Pre-Owned Advantage: Opting for a 2022 “Certified Pre-Owned” model extended the warranty through 2028. This five-year buffer allows me to prepare for potentially significant Porsche maintenance expenses down the line (though routine wear-and-tear costs like brakes, tires, and oil changes remain my responsibility). This mirrors an investor mitigating risk through due diligence and understanding potential future costs.
- Robust Savings Rate: Our household currently maintains a roughly 70% savings rate (saving $7 out of every $10 earned). This substantial financial cushion provided a sense of permission to indulge in a less conventionally “responsible” expenditure. Similar to an investor diversifying their portfolio and having room for calculated risks.
- Prior Car-Free Savings: Having forgone car ownership for over two years meant 26 months without car payments or insurance premiums. My previous vehicle and insurance averaged around $415 monthly, translating to an estimated saving of $10,790 (excluding gas and maintenance). This pre-purchase saving can be viewed as an investor accumulating capital before making a significant investment.
Since keeping $60,000 in readily accessible cash isn’t our typical practice (we generally hold less than $40,000 in joint cash and invest the rest), I chose to finance the purchase initially, intending to pay it off within a couple of months. The interest rate, at a steep 7.99%, was far from ideal. Acquiring the car involved an out-of-state purchase and shipping to Colorado due to limited local inventory and better deals found outside of DFW (apparently a hub for blonde Macan enthusiasts!).
Post-taxes, registration, and shipping ($1,295), the total investment reached $65,059 – a considerable sum by any measure. A minimal down payment on a credit card secured the vehicle ($2,500), and the remaining balance was financed, resulting in a monthly payment of $1,100. Extending this payment over the 72-month loan term would escalate the total cost beyond $80,000 over six years – far from optimal and the primary motivator to expedite the payoff using funds from a recent business deal.
These figures underscore the financial prudence of delaying luxury purchases until they can be made in cash, especially in high-interest rate environments. Financing at 8% transforms a $60,000 vehicle into an $80,000 liability. The financial calculus was vastly different when car loan rates hovered around 2%. But at 8%? Eliminating this debt becomes a priority.
Surprisingly, car insurance through State Farm amounted to only $120 per month – a pleasant shock given the car’s value and our comprehensive coverage.
The Emotional Investment: Beyond the Balance Sheet
My past assertions about “impressing people with your possessions” overlooked a crucial element: sometimes, the person you most desire to impress is yourself. I don’t imagine other drivers give my car a second thought, and within my profession, not owning a fancy car is often seen as a status symbol. I anticipated more negative judgment than positive feedback from peers in the personal finance sphere.
Alt text: Author Katie smiles from the driver’s seat of her white Porsche Macan, parked on a sunny street, showcasing her pride in her new vehicle.
The true joy resides in the daily reminder of personal achievement each time I enter the car. The sense of pride when it was delivered was profound. Embarrassingly, I admit to shedding tears of gratitude in the front seat, overwhelmed by the opportunities I’ve been granted. The Macan has been a long-standing object of desire since its US debut in the mid-2010s, but serious consideration only began a couple of years ago after selling my business. It then evolved into a gradual pursuit of financial milestones that would make this indulgence feel somewhat justifiable.
Beyond sentimentality, the core point is simple: sometimes, we desire nice things for ourselves. They become tangible symbols of our dedication and hard work. I anticipated guilt for violating the FI/RE ethos by purchasing a luxury car, but surprisingly, it never materialized.
The “Ma-Cons”: Acknowledging the Drawbacks
The advantages are clear – I can now authentically embrace Cardi B’s lyrics in “MotorSport” (“Why would I hop in some beef / When I could just hop in the Porsche?”), a long-held aspiration now realized.
However, the downsides, or “Ma-cons” (pun intended), are also undeniable. Beyond the obvious financial outlay, my initial concern about increased stress associated with owning expensive items has proven accurate.
A recent hail warning prompted a scramble to relocate the car to a parking garage ($12 overnight fee) to avoid damage, as our single garage space is dedicated to EV charging. With my previous car, hail would have been a non-issue.
Approximately $100 (and considerable time) has been invested in car care accessories recommended by Porsche owners on Reddit – leather protectants, 303 wipes (dashboard sunscreen), and more. One enthusiast even installed a professional car wash station in his garage – next-level dedication! This is all part of the “car wash 101” mindset – taking vehicle care seriously.
Driving now involves heightened awareness of surrounding vehicles, particularly those with dents or worn bumpers. Parking is strategically chosen to minimize door ding risks. No interior dust particle escapes my microfiber cloth, and a specialized hammock in the backseat protects the German engineering from German Shepherd-related mishaps. (A curious pattern in my preferences is emerging; my Italian ancestors might be disapproving.)
These anxieties might diminish over time, but currently, there’s a noticeable increase in stress about potential damage – a paradoxical outcome of significant spending. And, of course, career uncertainties could make this purchase seem foolish in hindsight – a risk I consciously accepted (hence, the continued need for blog readership!).
The Unexpected Return on Investment: Pride of Ownership
While I anticipated financial apprehension, waiting until the purchase was genuinely affordable mitigated that guilt. The true surprise? As a millennial embracing minimalism and freedom from responsibility, I’ve discovered an unexpected enjoyment in car ownership. The inconvenience of caring for something valuable once felt like an unjustifiable burden, a distraction from work and leisure.
My father’s love for homeownership, rooted in the sense of responsibility and pride in maintenance, was something I once scoffed at – “HOA Stockholm Syndrome!” I joked. But his insistence on the satisfaction derived from yard work or home projects now resonates. I’d dismissed it as justification for the burdens of homeownership.
Now, owning a nice car has illuminated his perspective. I genuinely enjoy taking “Snow White” (the car’s working name) to the self-serve car wash and hand-washing it. Vacuuming floor mats and maintaining its pristine condition brings a surprising sense of pride, especially given my past aversion to owning anything requiring significant care. This “car wash 101” journey has been unexpectedly fulfilling.
As Haley Nahman eloquently wrote in this insightful piece about “weekend plans” and the “death of the errand” in our modern, frictionless lives, there’s inherent pleasure in caring for something tangible, something that doesn’t involve screens or intense cognitive engagement.
Perhaps buying a Porsche revokes my personal finance club membership, but any regrets will be contemplated in Sport mode. This experience has been a valuable addition to my “investor’s tool box,” broadening my understanding of value beyond mere financial returns to include emotional and experiential dividends. It’s a reminder that sometimes, the best investments are in ourselves and the things that bring us unexpected joy and a sense of pride.
