> They want to have a car that doesn't embarrass them when they drive into work or round their friends, because owning a BMW has been a secret dream and it's a totally reasonable price, and a smooth ride and great acceleration.

This is really pushing it. Anybody buying a BMW on $100k in Silicon Valley while paying SV-level rents is a pretty big over-consumer. If you have a family on top of that, well... you won't be retiring any time soon.

I also find it odd that you jump immediately from "a car that doesn't embarrass them" to BMW. There's no in between? You have to go all the way to a luxury BMW to not be embarrassed by your car?

By all means, if you really value owning a BMW then get one, but unless you're making considerably north of $100k you don't have a strong case for not being an over-consumer.

You know how much $100k was when the term "six figure salary" started being used in the early 60s? Let me put it this way. The rich Donald Draper on Mad Men made $45k. $100k would have been more like $800k today. That was a CEO's salary. A "six figure salary" today is nothing like what it was when that term was coined.

> A "six figure salary" today is nothing like what it was when that term was coined.

Exhibit A is whenever a story about public employees makes the front page of HN (for example, the Detroit bankruptcy or the BART strike) and people start freaking out about train operators making $100K: "They don't even have college degrees, for godsakes!"

Well there's the thing: $100k salaries are most commonly made in portions of the world where lots of people make $100k salaries, thus merely increasing locational inequality while not actually pushing up the quality of life for the highly skilled workers commensurately with the income.

What I've seen in my friends is that certain men will buy an expensive car on a loan, keep it 3-4 years and then swap it for a family friendly car when they have kids. Often they will buy the car 2nd hand.

The car retains the majority of its value, they enjoy the car, they're not actually spending massive amounts of money like you seem to think they are. It's essentially a hobby item that they enjoy driving.

And it's only a proportion of my friends, some just get other cars that are a lot cheaper to run.

Not only that but leasing an expensive car can actually cost you less than the value of the car you lose for using it.

I remember checking how leasing a Porsche for 3 years would cost me less than half of the value the car would lose in that time.

I agree with kayoone; it doesn't really seem like this could consistently be true or else it would just be bad business.

In general, though, the best way to combat the depreciation of a car's value is to take out a long-term 0% interest loan, provided of course that you can get it. This works because (1) inflation reduces your effective net expenditure on the car; (2) you can take the cash you would have spent on the car and invest it instead; if you even conservatively get 3% returns a year, you've still come out far ahead.

Regarding (2), if you can't afford the car in cash, then you can't afford the car. That's always been my motto. Financing is a choice; it should never be something you are forced to do, unless this is your first car straight out of school and you just have no money yet.

If that was always the case, leasing agencies wouldnt be able to make profit, so you might just have stumpled on some really good offers which popup from time to time. In general, leasing costs hould be equal to or more than the deprecation in value of the car itself.

It's children that are the real financial issue. Even one child, last I heard, is the difference between early retirement as a reward for spending your 20s and 30s on grad-student frugality while earning plenty of money, and just having to work a 9-5 until it kills you.

N of one here. I have on child. Started saving in early 20's because I remembered two things my parents struggled with in the 80's. 1) being under water wrt their mortgage and 2) just making ends meet meant that they were never able to effectively save for retirement until they were in their mid/late 30's.

Got married to someone who thinks like I do wrt to retirement and with one child we are on track to 'retire' when we want to. Barring us doing something dumb or global financial meltdowns - by mid 50s or so. I put retire in quotes because who believe in retirement where one site on their ass all day and says I'm so glad I don't have to work any more? I don't. Retirement means we will be able to give meaningful time to .org's that need it. But this will still be 'work'. I can't imagine a worse hell than retirement where I have no meaningful work to do.

Note: with two or more children much of what I can still do would need to be re-evaluated.

This is one reason the wife and I will not have a child.

The cost is over a $1,000,000 (with a Dr. Evil pinky). If you look at the costs online, then you will see something between $200K to $400K depending on how good of parent are you. However, this doesn't bring in the opportunity cost of investing. If you just take the 18 year time span, then the first year is insanely expensive. Now, imagine it expanding 30, 40, 50 years out.

agreed. the fact is life pretty enjoyable including the occasional financial strain. its the journey not the destination.