Very interesting topic which I did think about.
There are many expensive cars in HDB carparks. Who owns them? How much do the owners earn?
Cos I, myself also has felt how come I can't afford such a vehicle.
There are many ways to look at this question or comment, and of course I don't have all the answers, but I'll try to shed some light with what I know.
Firstly, there are a lot of expensive cars in HDB carparks. But, there are also a lot of regular cars. We tend to notice the nicer, bigger cars. So there is a bias when we see these cars. I think if we really go and count them, we would end up with around 10%-20% being expensive cars. Which is reasonable.
Next, there is the willingness to spend
I have a friend he earns $10,000 per month by himself. He asked me... "When will I be able to afford an Audi?"
The thing is... he can already afford an Audi, but he doesn't feel that it's worth it.
The question is... WHEN do you think you can afford an expensive car?
For me, even if I have $1m in the bank, I won't buy any car if I don't need it.
And my friend, I think he wants to have a very big cash cushion before he is willing to put out money to buy an expensive car.
So the thing is, you may already be able to afford it, but don't feel like it's worth splurging the money with your current level of financial capability.
When I was selling insurance/property sales, the bosses really tried to encourage the staff. They said, "if you can earn $5,000, just buy the car, you can afford it."
And the truth is, with $5,000 monthly income you CAN buy an expensive car.
The reason why bosses like to encourage the staff to buy expensive cars has a couple of reasons.
1. After buying the car, the staff is happy, and will be willing to go out and "chiong" more sales. Cos he can see the effect of his hard work.
2. After getting into debt, the staff has to "chiong" more sales to keep up the payments.
So there were a lot of agents who had higher end cars.
How much is needed? Only around $5,000 income per month.
You may be surprised, but there ARE a lot of people who are willing to buy an expensive car with only $5,000 income or less. The monthly payments is only around $2,000. Still manageable.
Most of us would think this is unbelievable, but the thing is, there are many many people who aren't financially prudent and manage their finances properly.
Those who can truly afford it
I stay in a new HDB so all who stay here balloted from HDB, which means everyone's income was of a certain level when they balloted for the HDB.
Around my area, there are 2 property agents that I'm familiar with.
One drives a BMW, the other drives a Honda Vezel.
Both are doing very well. I expect $10,000 per month average.
Can both of them afford it? Yes. But one feels it's worth it, the other feels that getting an expensive car isn't necessary.
There are 3 Porsche(s) in my area. I know one of the owners.
He stays in a 3 room HDB. He was a business owner and sold the business and started other businesses. A very highly successful person. How much he knows about financial management? I have no idea. But I'm sure he can afford it. He probably became highly successful after balloting for his HDB.
So let's put things into perspective...
How many people are highly successful?
How many people can afford an expensive car?
Probably not many people are highly successful and earn $10,000 per month.
But there ARE a lot of people who can afford to pay the monthly installments of a luxury car.
So the question then becomes... it's not about whether you can afford it. Most of us likely can afford it.
But rather, are you willing to pay this large amount of money for a car?
How much financial security do you require for yourself before you are willing to splurge on a premium vehicle?
Different people have different levels of financial security and feel that they can or cannot afford luxuries based on that feeling of security. It's not so much the actual cash or income that makes one feel like they can afford a vehicle.
So don't feel too bad if you feel that you can't afford a luxury vehicle. You probably can. But it's highly likely that you just don't feel like it's worth putting down this amount of money for such a form of transport. It's just that you feel that you want more financial security before you are willing to put out this amount of money.
So ask yourself. WHEN do you feel you can afford such a ride?
If you find yourself saying, over $1 million in the bank or liquid assets.
OR above $15,000 in monthly income.
Then it's highly likely you just have higher requirements to financial security than others.
Cos think about it... how many people have over $1m in assets or $15,000 in monthly income?
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