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Ask Dave

Time to Get the Toy

Mike wants to know when it's okay to make a big purchase. He owns a classic car he's always wanted to restore, but it's hard for him to part with the cash even though he has the money.

QUESTION: Mike in Los Angeles wants to know when it’s okay to make a big purchase. He owns a classic car he’s always wanted to restore, but it’s hard for him to part with the cash even though he has the money. Dave offers Mike some guidelines.

ANSWER: The rule that I use is that I want you to be debt-free but the house, putting 15% of your income away for retirement, and you’ve got your emergency fund in place. Those are foundational things. You’ve got those in place. Beyond that, the rule that I use is when is it okay to buy a toy? What I tell people to do when I’m meeting, for instance, with an NFL guy or a music artist or something and they’re making a huge pile of money is set aside—and Sharon and I do this too—above your living expenses, run a formula on what we would call disposable income—extra money above living expenses.

You make a great income. You do very well. Above your basic living expenses, say we’re going to invest X%, we’re going to give extra X%, and we’re going to play with X%. Then I have zero guilt about playing with that X%. If someone looking in from the outside thinks I live an extravagant lifestyle and Christians shouldn’t do that, they don’t know what the flip they’re talking about. They have no idea what my finances are. I don’t worry about it. I just do whatever I want to do with that money. If I wanted a collectible car—in my case, it would be more likely a boat—that’s a toy. By any definition, it’s a toy. Your thing is a toy. It’s a large boy toy. When is that okay, and when do you not feel guilty? When you have laid out a game plan in which your life is balanced between wise investing, heartfelt giving, and playing. You’ve balanced in that.

People who play all the time are self-centered twerps. People who give everything away weird me out. People who never invest for the future aren’t wise. You’ve got to have a balance across those things. I want you doing some of that. Then you can do this, and you’ll find yourself emotionally more enjoying the toy because there are just no strings to it. You just bought it. It’s like if you put money in your clothing envelope and you see a shirt you like and you buy the shirt. You don’t have any worry that you can’t pay the light bill because that money was allocated to clothing. It’s the same kind of thing except we’ve just put a few more zeroes on it.

We need $25,000 out of your income. That’s not going to be that hard because you’re not going to do it all at once. It’s a process. We’re not going to write one check and be done. You just kind of lay out your schedule for the car and then say, “While I’m doing that, can I be a generous giver and a wise investor?” Then your emotions are just released, and of course your spouse is in agreement too.

It’s like my buddy Truett Cathy who owns Chick-fil-A. He’s 90 years old. He’s got a collectible car collection—probably 200 or 300 cars. Absolutely incredible. They’re worth several billion dollars, and they give millions and millions and millions and millions of dollars away every year. They’re just wonderful people. They’re fabulous investors. They’re fabulous givers. I asked his wife as we were standing there in one of the buildings full of these cars, “Miss Jean, what do you think about Mr. Truett’s cars?” She said the same thing your wife said. She said, “This is a good husband. We’ve got three wonderful children. We’ve got grandchildren. Our life is great. We give, and we support ministries and missions around the world. For him to invest a few of our dollars into his hobby and it gives him joy…” He doesn’t drink. He doesn’t have many other hobbies. This is it. At some point, you’ve got to cut yourself some slack. But when you do that and that’s all you do and you put that before your family, which is not your case and it’s not Mr. Cathy’s case, then you would be called a child instead of a man. When you have a motorcycle payment and your kid’s college fund isn’t funded, that’s a little boy. That’s not a man. That’s the difference.

Get you a toy, dude. You’ve earned it. You work hard, and you’re obviously bright. Stupid people don’t make that kind of money.

Thank you! Your guide is on its way! 

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