Big boy's toy, III -- numbers crunching

Going back to psychology 101 - Maslow's hierarchy of needs.



Based on personal experience, the itch and temptation are the strongest when we navigating through love/belonging and esteem stages. Materially, we are neither too poor nor too rich. I constantly getting peer pressures when they upgrade their house or car. In a modern society, the instant gratification will be granted the moment we produce our annual tax filling to a banker. They love our business.

I constantly getting questions why I don't upgrade my car. My constant reply to them was NO MONEY and they will just laugh. However, my real reason is this. Let's say, I woke up in a morning in extreme good mood and decided to reward myself and also to put all the nagging to rest, I decided to get a Lancer Evolution 2008. Look at this, what a beauty.




Then I walk into a showroom and they produced me this quote, a price tag of $ 323,888, insurance inclusive. Don't be concern with the insurance cost of $8,451, you can afford it. After all, a decision has been made!



I put down a deposit of $ 73,888 and take a loan of $250,000 ($323,888). To save you all the troubles, here's a link of a calculator on how much you should pay monthly for the next 9 years with 3% p.a. interest(I'm sure we all can get a better bargain than this but for the purpose of this exercise, just accept it). My monthly instalment will be $ 2,939.81.



http://www.maybank2u.com.my/calculator/form_hire-purchase-calc.html

Congratulations. I'm now a proud owner of my dream car but then........... I feel a little concern now. What?!! Why?%#@

For the next 9 years, based on 10% return p.a., my $ 73,888 will turn into $174,224.04. If I invest my monthly $2,939.81, it will turn into $ 518,888.70. If I add both of them together, this beauty cost me $ 693,112.74 and not $391,387.48($73,888+12x9x2,939.81). And definitely not $ 323,888. This trick works all the time, the flame of my passion will just extinguish everytime I run this exercise. Everytime.

........and the bond between my "legend" and I will just get stronger each time.