No. of Recommendations: 2
Well, I'm a bit late to the discussion...

Likewise. :)

I think of cars as an expense like anything else. Why base any expense on your net worth? Instead just figure out what makes sense for you, and budget accordingly.

Most necessary expenses have a range of values where there's some minimum and maximum you could plan on spending. With something like a car, you might decide that at a minimum, you would like to buy a new-to-you, slightly used, lower-end vehicle every 10 years, at a periodic cost of $10,000, or $1,000 per year. The upper bound might be a brand new mid-range car every 8 years at a periodic cost of $40,000, or $5,000 per year.

With that budget in mind, now you can plan accordingly. It's nobody's business but your own what numbers you should use... you would need to tailor the plan to suit your own needs, desires, and financial situation. Your net worth may inform the numbers, but it need not dictate it. For example, a person with a net worth of $10M would be in a better position to look at more luxurious cars than someone with $1M net worth, but that doesn't mean she's obligated to spend more simply because she's worth more. Plenty of high net worth people drive Hondas.

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