Buying My Dream Car With Dividends (2020 McLaren 570s)

I always wanted to buy my dream car McLaren 570s using Dividends and dividend investing

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Usually I talk about finance, investing, and being responsible with money. Today, I wanted to reveal something about myself - i've always wanted to do something special when I reach one million subscribers, but I figure - life is too short so I decided to do it sooner.

At first I thought about traveling to Hawaii, but I did that early last year, then I thought about getting a luxury watch, but most of all, I thought about getting myself a Tesla. Unfortunately, everyone on YouTube already owns a Tesla and I wanted to be different. I've always wanted to own a luxury supercar, specifically - the 2020 McLaren 570s.

The McLaren is something I've been obsessed about it ever since I was a kid. It has a mid engine V8 3.8 liter, twin TURBO engine. Which will make, 443 foot pounds of torque. That means, it produces - 562 break horsepower. Ultimately, this means, it can do 0-60 in just 2.7 seconds.

I’m ready to share how and why I did it, and how much it cost. When I say afford, I don’t mean, a LITERAL price tag of this car which is a base price of 192,500. When I say “afford” I mean, how much money do you need to invest in something like the stock market to be able to afford something like this?

The first thing Is to first decide between a lease and a purchase. The benefit to leasing it was that I could let the time value of money make me more money, because instead of paying a large amount up front, I can pay less and invest the difference. Plus, I don’t have to worry about the maintenance as much which for the McLaren is on average - between 3,000 to $15,000 per year.

A standard lease would cost around $7,471 my first month, with a monthly cost thereafter of 2,471. Gas, maintenance and registration not included but I’ll average another $150 on top of that. The other option was to buy it outright with my dividend portfolio. The benefit with doing this way is that I get to own something at the end of my payments that I can sell.

Juddging by the numbers, purchasing it makes more sense, purchasing it means getting a loan for roughly $168,000 at a 2.5% interest rate, and investing whatever money I have left over in the stock market because I can make more than 2.5% per year. So what I’ll do is invest the money left over after the downpayment of 20% which is $41,600, and with a loan that lasts for 48 months, we’re looking at a final monthly payment of $3,966.00. I didn't say it was a smart financial decision, but I did say to watch the video until the very end.

I didn’t want people to only read the title of the video or just watch a minute of this video and think I did all this because, I didn’t end up buying a McLaren. People talk about "true cost of ownership" all the time, but underneath true cost, which is the dollar value, REAL COST is the time value. I want you to think twice when you consider the real cost.

I’m not saying DON’T buy things that make you happy and just forever for no reason. But understand that it’s not OWNING the car that will make you happy, it’s the CHOICE to own the car. I’d you can save enough to say this one phrase, it will change your life forever just as it’s changed mine - “I can buy that.”

Instead, think of everything in terms of .04, or 4%. Take whatever purchase that you think you need, and divide it by .04. In the case of the McLaren, I would need, $741,300, invested at 4%, to be able to have this car exist in my life as a lease option - indefinitely. That’s how much money I need not in the bank, but invested in the stock market, working for me to afford the TRUE cost. If I wanted to buy it, I would need over $200,000 plus, insurance, maintenance, depreciation costs PLUS, the monthly payment of $3,966 (not including maintenance and gas costs), which means I need at least a cool million dollars to afford it passively - that’s the "real cost".

Continue being frugal.

Special thanks to LVCExotics.com for letting us use their cars (this video was not sponsored by them, but if you're in Las Vegas, tell them Andrei sent you!)

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