Ask the Readers: How Much Would You Bet?

The Buddha, the Godhead, resides quite as comfortably in the circuits of a digital computer or the gears of a cycle transmission as he does at the top of the mountain, or in the petals of a flower. –Robert Pirsig, Zen and the Art of Motorcycle Maintenance

Last week, Mrs. 1500 and I mentioned that we’re considering buying an Acura NSX, a Japanese supercar:

I’ve been thinking about this the NSX all week (and really for the past 25 years). To help with the decision, I came up with a list of pros and cons:

Pros

  • A Fiero, not on fire.

    Pontiac Fiero doppelganger? I’ve read that people mistake the NSX for a Fiero. I’m not a showy person, so I don’t mind if people think I’m driving a product from GM’s dark days that was famous for catching fire.

  • Keeping up with the PoPs: I have no desire to keep up with the Joneses, but keeping up with the PoPs is entirely different. Mr. PoP just bought an NSX, so I’m feeling the pressure.
  • It’s a Honda: Acura and Honda are the same company. Acura only exists in North America because Americans enjoy paying more for perceived luxury (in many cases, Hondas and Acuras are the same basic car, but the latter has a fancy badge and fancy price). In any case, I’ll be able to sleep at night knowing the NSX is reliable.

Cons

  • Pontiac Fiero doppelganger? How could you think the beautiful NSX looks like a Fiero? Are you blind? It’s not even on fire!
  • Taco Bell drive-thru Troubles: As a sports car, the NSX already sits low to the ground. The one I’m looking at has been further lowered. If I go through a drive thru, the guy handing me the food will tower over me. I can see a debacle where my Extra Cheesy Chalupa Diarhitto and Mountain Dew wind up getting dumped all over me and the interior of the car.
  • Harassment from the Iowa State Patrol: If I buy this car, I have to drive back through Iowa where I was harassed by the cops. An NSX with a Colorado plate (“He must have marijuana!”) is a recipe for fun times with the local police force.

A recent NSX carbeque near my house

Before I tell you what I decided, here is what you had to say:

 

Against:

Mr. Tako doesn’t think I can afford it.

Gosh, got some money burning a hole in your pocket? You really think you have “sports car” money?

With respect, I beg to differ. We get by on about $40,000 per year and this will drop by $27,000 when our home is paid off in 11 years. The investment portion of our portfolio is $1,400,000, so we have a massive buffer. Financial independence comes first. There is no way I’d go back to work for a car.

Joe from Retire by 40:

Don’t do it. Sports car cost a lot to maintain. I love the Acura NSX, but I bet it cost a bundle to fix whenever something goes wrong (inevitably.) If you can DIY everything, then maybe. I haven’t research this specific model so I’m not sure, but it must be expensive to repair.
Do you have to sell some investments to buy this car? I know a lot of people who regret selling stocks to buy a car.

Believe me Joe, I have enough going on. If I thought that this thing would complicate my life beyond swapping cars in the garage and oil changes, I’d skip it. As far as maintenance, I’ll do all of the work myself. And I don’t have to sell any investments to buy it. I’m not that crazy.

 

For:

I was shocked that most of you were supportive:

Reader Avi:

Go for it!

Mr. PoP:

This thread is about 50 to 2 in favor of buying the NSX. Do it, keep it for a year, and sell it if you don’t like it. Even if it falls in value by 1/2 you’ll still have made the right decision.

Reader Tom:

But I also think an important part of the FI universe is making mindful purchase decisions. This is about as mindful as it gets. You know what you’re giving up to buy the car (really, not that much.) It won’t drop in value. It doesn’t cost much to keep (if you don’t put a ton of miles on it.)

It’s all about spending mindfully

FullTimeFinance is a fellow car aficionado:

Do It. This era of car is going to appreciate for the foreseeable future because the people who grew up with the car can now afford to buy it.

 

Show-offs and Garage Queens

There are two types of sports car owners who I don’t admire:

  • The show off: Some buy fancy cars for status. These usually have automatic transmissions and are driven 10 mph below the speed limit.
  • The garage queen: A friend bought a new C5 Corvette back in 1998. It has less than 10,000 miles on it because he thinks it will be worth huge amounts of money some day. Unfortunately, many other C5 owners have the exact same mindset, My friend has an expensive chunk of fiberglass and metal in his garage.

I am neither of the above. I would never even post a picture online and there will be no celebration on Facebook. I won’t even tell anyone I own it unless they happen to enjoy cars. I also believe that machines need to be used. The NSX I’m looking at is in the deep south and if I buy it, I’m driving it back to Colorado with a stop in Wisconsin. Low miles be damned.

So, the question is:

What is it that I’ll get out of this car?

Here is Where I get All Deep and Shit

I met up with a local friend last week who just bought a run-down business on Main Street. He’s making the spot and into a beautiful space. He was working on it as we talked and in the course of the conversation, he said something like this.

I come here for a couple hours every morning and work. It’s meditative. Just me, a little music and my tools.

I can see it. He’s fixing and building; making an old and ugly space beautiful again.

I’ve heard others make similar comments about farming and how they get contentment from working the land.

And my happiness would be similar if I owned an NSX. I enjoy mechanical things. I like to take them apart and admire the engineering that went into them. Sometimes, I consider why the designer made the decisions he (or she) did. Beautiful, thoughtful, purposeful design turns me on. The NSX encompasses all of that.

I’d change the oil and perform other maintenance. I might add some tasteful modifications. I like to think that I’m continuing the job of the Japanese workers who assembled the NSX 25 years ago. And I’m just a temporary custodian. I’ll take care of the car and then pass it along at some future point to someone who will continue.

And just so you don’t think I’ve gone all soft and zen on you:

It will be loads of fun winding the engine out on mountain roads. Petal to the metal (aluminum). An NSX in the garage is safe, but that’s not what the NSX is for.

Yes, I’m probably going to buy it. There are a lot of variables to take care of when buying something like this, but at this time, I’m moving forward with it.

 

A Bet

I saw this on Twitter recently:

Designate an amount of money and then flip a coin. If it lands on heads, you lose it all. If it lands on tails, you get 10x the amount.

How much would you wager and why?

Join the 10s who have signed up already!

Subscribing will improve your life in incredible ways*.

*Only if your life is pretty bad to begin with.

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57 Responses to Ask the Readers: How Much Would You Bet?

  1. I’m not much of a gambler so the highest I’d probably go is $100. While I’d love to win more than $1,000 losing more than $100 would probably hurt too much for me.

    I can wait to see how this NSX looks. Sounds like you are really going to enjoy it if you enjoy working on cars. Should be fun to follow you on this journey 🙂
    Mustard Seed Money recently posted…Spending Wisely on MemoriesMy Profile

    • “I can wait to see how this NSX looks.”

      And I can’t wait hear how it sounds and feel how it drives. Of course, the dinosaurs will be along for the road trip.

  2. Not much of a gambler either. I’d probably wager at max 100 dollars. Beyond that I would notice if I lost it too much.

    As for the NSX, yes someone must be blind to think it looks like a Fiero. Not even close! My two favorite parts of owning a sports car are:
    Driving through the mountains or other twisty road away from traffic.
    After parking the car just turning around and looking at it.

    None of that involves other people looking at it, as I’d rather be away from other people. I suspect you’ll be the same.
    Full Time Finance recently posted…How did I manage to pay off $63K in Student Loan DebtMy Profile

  3. Mr. Pop says:

    I’m not smart enough to calculate the odds of that bet (Mrs. Pop?), but it looks like huge upside with very little downside. 50k? 100k?

  4. Jax says:

    I am not a huge gambler either, and any time I’ve gone to a casino I’ve assumed that the money I spent is on entertainment and I won’t see any of it back. So, I’d bet $25. That’s low enough it won’t hurt my budget and if I came out with $250 I’d be very happy!

    I hope you go for the car! While money is important to have to live on, what’s the point of amassing it if you’re never going to spend it? I vote enjoy it now, since it’s not going to significantly impact your future finances.

  5. ESI Money says:

    Buy it! Buy it! Buy it!

    I’m happy for you. We all need a splurge now and then.

    Mine is that we’re planning on living a month in the Caribbean next winter. 😉
    ESI Money recently posted…Is the Cost of a Financial Advisor Worth It?My Profile

  6. It sounds like you really want the car and if its going to add value to your life then go for it. You’ve certainly earned it.

  7. Woop, looking forward to that car purchase, Mr. 1500. You’re getting wild(er) and crazy(er) on us. 😉

    As far as the wager, I’d probably bet $100. I’m a risk-averse person so losing $100 wouldn’t be the end of the world. But winning $1,000 would be quite a windfall. 🙂
    Mrs. Picky Pincher recently posted…What A Frugal Weekend!My Profile

  8. Adam says:

    I’d probably go 5K, because i wouldn’t miss it too much but 50K win would be a decent boost.

    And you’re really not going to post a pic online at all? You’re going to tease us then not show it to us once you buy it?

  9. 50/50 bet? Probably 10k. It’d hurt if I lost, but I’d be happy with the $20k if I won!

    As for the NSX, feel free to stop by on your way home from Wisconsin so I can admire it and drool (but not actually drool on the car!).
    Gwen @ Fiery Millennials recently posted…Early Retirement: Everybody wants to be a bodybuilder, but…My Profile

  10. I don’t gamble in real life, but if I had to come up with an amount I’d be ok losing…5k.
    That amount would sting a little bit, but it wouldn’t end up with me crying in a ball on the floor. Plus, I make about $50k a year, so winning that much would make me very happy. 🙂

    Also, I’m really happy it sounds like you’re going to get your dream car!

  11. 50/50 bet on something that pays 10 to 1??? Those are some pretty good odds you’d see NOWHERE near a casino. I’m not a statistician but the average return on that investment is 5x your investment or 500%, for 1 second of work. I’d probably risk $50k. If I won, I’d be pretty close to FIRE. And if I lost, it would only take me about another year of work to make it back.
    Fervent Finance recently posted…Slowing Things DownMy Profile

  12. Joe says:

    Enjoy working on your NSX! 🙂
    As for the bet? Maybe $500 top. That’s about how much I can lose without feeling terrible about it.

  13. Hmmm -great odds and great payday on that bet. I’d probably put down $25k. It would hurt a bit if I lost, but it wouldn’t be insurmountable. If I won – I’d put the $250k into VTSAX or similar.

  14. KMB says:

    We don’t have any riverboat gamblers reading today? The Kelly Criterion says 45% percent of your ‘stache, by my math. Too rich for me, but I’d definitely bet 10% of net worth…

  15. J All says:

    Hate to be too rational, because this thought experiment is all about human perception, but mathematically speaking, you make 4.5 x your wager on each bet on average. (-1 x 50%) + (10 x 50%) = 4.5.

    With that in mind, a rational person would bet the maximum they could if there were only 1 bet and the goal was to gain the maximum return. However!!! Since I have a solid concept of “enough” my goal would be slightly different:

    Since I need about $700k to FIRE, I would bet 70K. If I hit, I saved 5+ years of working – if not, I only “lost” 6 months of working.

    Now, if there were a series of successive flips, and I lost, I would simply raise my stake by $7k to offset the lost wager from the first round. In a successive series of losing flips, my wager would look like this: 70k, 77k, 84.7K, 93.2K, 102.5K. I could probably go about 6 flips before my net worth is exhausted, so I’d need a hit before that.

    Now, who do I see to make my wager?

  16. Fascinating question.

    I would wager $200,000.

    $2 million dollars more than I have now would place me in complete abundance. The marginal utility of money question would be a moot point for me, because I really couldn’t use more than that. Work would be completely optional and force me to really answer why I continue to do it. It would force me to grow and step out of my cofmort zone.

    Adding money slowly to my stache allows me to keep justifying one more year (maybe I need 3.4% SWR instead of 3.5…).

  17. Mr. Tako says:

    Happy I’m part of the 1% that thinks you shouldn’t buy the NSX, but I also understand your reasoning. You gotta do what makes you happy, I can’t argue with that.

    Some people the car-bug bites, others it doesn’t. Like I mentioned before, I have multiple relatives that love cars, so I’ve seen this before. Most of the time the cars sit in the garage in some state of disrepair. ‘Garage queens’ as you called them.

    If, in 10 years you call me and tell me I was wrong, I’ll owe you some beer. 😉
    Mr. Tako recently posted…The Importance of ListeningMy Profile

  18. Eric Cumming says:

    I am floored by how many people cant perform a proper cost/benefit analysis on this bet. You have 50/50 with 10x (!!!!) return. The value of that flip is 5x whatever you paid for it (50% odds * 10X retrun). You would be crazy not to put a huge chunk of money on it.

    If I had the opportunity, I would be looking high and low for as much cash as possible to put on this flip. Im relatively young so I have time to recover from a loss, but a win would mean I’d be retiring tomorrow!

  19. For that kind of payoff, I’d wager $100k. I know I should bet more but I can stomach losing that amount and still roughly hit our FI goal in a reasonable time if I lose. But if we win, we’re FI tomorrow and the wife and I are buying matching Sym Wolf Classic 150s to “race” against your NSX. 🙂

  20. Ms. Montana says:

    Mr. Montana has a lovely classic car. When we got married 15 years ago, I knew it would be in the cards some day. He drives it everywhere, does all the work on it (just put in a new starter yesterday) and just loves it. 🙂 And I love him. Simple as that.

  21. Paul says:

    This has to be some kind of late April Fool joke. Or, has a mid-life crisis hit a bit early? Please start at the beginning and re-read all the posts on the MMM website as well as Jim Collins’ posts on car ownership and minimalism…..you will thank me later…don’t do it!

    • I’m a minimalist in every other way. I’m on my bike all the time, live in a modest home and we don’t eat out much. And Jim Collins himself encouraged me to make this purchase!

      This is the only crazy-ass thing I want and it’s the end. I have no desire for any other fancy car.

      I understand your point though. But hey, I’m not perfect.

      • Paul says:

        Well, if Jim Collins signed off, who am I to complain?

        • Ha ha, no, you have every right to call me out! 🙂

          I wish I was better adjusted and could quash this silly desire. I live being held accountable!

          • Paul says:

            I do have a minor confession. In a prior life, before I got married, had two children, and became determined to become financially free, I was an avid motorcycle rider. I sold my last Harley about 12 years ago, right before I got married. Now I ride a bicycle. However…..there are days, especially in the Spring, when I am very tempted to go out and buy an new Harley Davidson. I miss the wind. Based on what I know about Jim Collins he would likely give me enthusiastic permission to buy one if I asked…. Have fun in that very cool sports car.

  22. Mrs. BITA says:

    Yay, I’m glad you made the decision and that you’re going to get this thing that gets your juices flowing.

    As to the bet – I would put $100k on the line. Losing that much would hurt, but there would be no permanent damage done. The 10x win would instantly elevate me to a position of fuck-you, blog name and bayalis be damned.
    Mrs. BITA recently posted…The Position of Fuck YouMy Profile

  23. I’d bet my entire net worth on that bet. Expected return is 0.5*-100% + 0.5*1000% = 450%. Beats the hell out of any investment I can think of.

    It kind of reminds me of this game: http://coinflipbet.herokuapp.com/. It’s a fun and very educational way of spending 20 minutes.

  24. I would go for the NSX and enjoy the hell out of it. Plus if it doesn’t work out you can always sell it.

    As for the coin flip bet, at this point in time, I would bet $10K. Losing would be a minimal hit to the net worth, but the winnings would be a big boost to reaching my goals.

  25. Team CF says:

    Glad to read that you will likely buy the NSX, just let me know when I have to buy the ticket to Colorado 🙂
    As to the coin flip, tricky one. The odds are about as good as you are going to get for such a high reward. But I’m not sure what I would do, probably limit it to a €1000. Not much a gambler myself 🙂
    Team CF recently posted…March 2017 Cheesy IndexMy Profile

  26. Brian says:

    Even if you don’t like it, it really probably won’t cost you that much to own it for a year.

    http://jalopnik.com/heres-what-it-cost-me-to-own-a-ferrari-for-a-year-1669923931

    This guy owned a 10 year old Ferrari and it only cost him $13K for the year (excluding fuel). I feel like you can probably do better since Hondas have a better reputation for reliability

  27. Steve from Arkansas says:

    Hey, if you are already FI then get the car! If you aren’t and you can cut other discretionary spending enough to offset the car 100%, get the car! If you don’t meet one of the above two criteria then wait until you do, then get the car! I waited until I was 58, and could live off my investments at a higher spending rate than I ever did while working, then I bought the car, a third car, an Infiniti EX35 little rocket sled that is so fun. But it was only $22k & 6 yrs old. Yeah, I could afford a new Corvette or Porsche, but that wouldn’t be me.

  28. Vivan Shah says:

    I stumbled across this and thought I could comment on the reliability and cost aspect as an NSX owner for 3 years. I bought my 2001 in September of 2014, and in the time since, the only thing I’ve had to replace aside from oil and tires was an O2 sensor which I diyed for under 100 and a clutch master which I also diyed for under 150. The big maintenance item is the timing belt and water pump which runs 1500-2500 including labor and is due every 5-6 years or 60k-100k miles depending on module year. Everything else is consumables, including longer terms consumables like hoses and bushings that are a reality on any 15+year old car.

  29. Tony says:

    As for the bet, I think the answer depends entirely on how much one can afford to lose up to the point where winning additional money should the coin flip go the right way becomes superfluous. For someone with your net worth and spending, I think the $200K that you said you would wager is a decent answer. If you lost it, you could still be FI, but making any more than $2 million probably wouldn’t make you any happier. Basically what the Happy Philosopher said.

    As for the NSX, I won’t opine on whether you “should” buy it but I wonder if you are considering all of the variables. You seem to be looking only two factors: (1) whether you can afford the car; and (2) whether you would actually enjoy owning the car more than having that money in your investment account. I think the answer to both questions is yes, but wouldn’t that be the pre-purchase justification for most frivolous non-essential purchases? It seems to me that you are looking at this from the idea of either spending $40K on a car or not spending $40K, whereas I think the question should be whether spending $40K on this car will bring more happiness than doing anything else in the world with $40K. The car may bring you more happiness than the security of having an additional $40K in your investment account, but those are not your only two options for the money. You could spend it travelling more with your family (or maybe seeing more exotic locations more frequently). You could give it to charity(s) (and there is plenty of research showing that charitable giving benefits the givers, not just the recipients). Or anything else you can think of that you could do with that money if you had to spend it. If after considering all of the other options for the $40K, if you determine that spending it on the car will bring you more happiness than any other possible use of $40K, you should buy the car.

    All I have to go by is your posts though. You very well may have considered all the options and decided that you want the car, in which case you should go for it.

    • Thanks for your comments on the NSX. I’ll probably go through with it and if I don’t like, I’ll just sell it after a year.

      We’re already maxed out on everything else that brings happiness. I’m fine with my home, we’re traveling for 5 weeks over the summer. Not much to complain about on my end of the world.

  30. What the heck, just buy it already man. You guys have earned it, and forget the internet frugal police (IFP). The IFP – like IRP – can get nasty at times. Frugality, much like FI, is entirely relative. With this purchase hardly making a dent on your FI status, just go for it. No, you are not violating any of the FIRE tenets by doing so. There you go, feel better? Do you need a certificate from the FI School of TFR approving the NSX purchase? 🙂
    Ten Factorial Rocks (TFR) recently posted…A Headache That Tylenol Doesn’t CureMy Profile

  31. Sabbaticalia says:

    How much would I bet? Hmm. Enough to make my Number if I were to win, but not too much to affect getting there from where I am now if I were to lose.

    So $47k and change would be my bet. But I’d not do that right now: my wife’s very annoyed at me for “practicing FI” and has “discovered” a few more (large) expenses we “need to cover”. She triggers herself over any money flowing out now that’s not going towards those new expenses. I’m trying to talk her through what’s up, but it’s a slow and unjoyful slog right now.
    Sabbaticalia recently posted…Moving forwardMy Profile

  32. Have to echo other commenters that it is disappointing that people (including many other financial bloggers it seems?!) can’t do some simple maths on the betting question. I know “it’s not about the maths it’s about the emotions behind it” or whatever but come on.

    Kelly says you bet 45% of your pot on it, OK so I’m not expecting everyone to know that or even know what Kelly is, but you should at least get a sense that this is the offer of a life time and you should put more than $100 or $1k on it! I would expect the man on the street to get this one wrong more often than not but not people who frequent fine blogs such as this one 😉

    Also, why are people saying they aren’t gamblers? Do they not invest in stocks or property or anything else? Do they not know that investments can go down in value as well as up? It is essentially the same as gambling, just the win/loss mechanism is a bit different? Anyway rant over, apologies if I offended anyone, it’s late over here and I’m tired 🙂

    Our NW is around £200,000 but a large chunk of that is in the house, so I’d probably go with about £20K. £100K would be awesome and juice me FIRE plans (I’d probably quit my job in fact) so in that essence it would be life changing, but to lose £20K wouldn’t be “that big a deal”.
    theFIREstarter recently posted…what are our long term plans?My Profile

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