Cars as a % of Total Assets - Ferrari Life
 
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post #1 of 13 Old 01-15-2011, 12:26 AM Thread Starter
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Cars as a % of Total Assets

In terms of the percentage of one's personal wealth that their car collection represents, what would you consider reasonable?
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post #2 of 13 Old 01-15-2011, 11:55 PM Thread Starter
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To add to the above, I think it also depends on the value of the cars. Think the dividing line would be around $1mil with higher percentages north of that.

Personally I would put it at 15-25% max.
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post #3 of 13 Old 01-16-2011, 02:12 AM
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Think it would depend on the actual cars as well. A fleet of brand new heavily depreciating machinery might warrant a much lower % of total assets than owning a couple of high value classics that are holding their value.

Ferrari's: 360 Modena, 550 Maranello
Ex's: Dino 308 GT4, 612 Scaglietti
The Rest: Rolls Royce Silver Shadow, Porsche 911 2.7s, Porsche 911 3.2 Carerra, Ducati 916... and the Land Rovers
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post #4 of 13 Old 01-16-2011, 06:15 AM Thread Starter
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Originally Posted by Barry View Post
Think it would depend on the actual cars as well. A fleet of brand new heavily depreciating machinery might warrant a much lower % of total assets than owning a couple of high value classics that are holding their value.

Sorry, to clarify, I assumed that the cars were all near to fully deprecaited.
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post #5 of 13 Old 01-16-2011, 07:29 AM
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Difficult question and very individual. If someone wants to keep their cars forever then the questions becomes irrelevant. He paid what he had tp pay..the money is spent and forget about.
If otherwise you want and need to keep value in it out of whatever reason for fully depreciated or classic Ferraris I would go as follows:
As I always expect prices to dive 50% in a terrible economic situation I would calculate 10% - 15% allocation to cars. Therefore a 5-7.5% additional "portfolio heat" needs to be allowed to your overall wealth. Problem to answering the question is that people most often tend to invest in assets which tend to falter at the same time as collectibles do. Therefore you add probably some correlation to your overall wealth portfolio. That said, I tend to believe that lovers of ferrari's should buy them and drive them AND in the same moment when allocating money in Ferraris, they should probably invest a little less into traditional investment vehicles. Just my 2cents.
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post #6 of 13 Old 01-17-2011, 10:26 PM
 
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i think 5 percent is a good percentage if we are talking about just regular exotics (non classics such as murcielagos, 430s, and etc). but if we are talking about classics, i think anything up to 8-10 percent is ok. anything over that tho i think its abit too much..
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post #7 of 13 Old 01-18-2011, 12:31 AM
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Quote:
Originally Posted by 212Export View Post
Difficult question and very individual. If someone wants to keep their cars forever then the questions becomes irrelevant. He paid what he had tp pay..the money is spent and forget about.
+1
What's home free to spend is home free and a continued connection as proportion to total assets might not be an adequate view. If you in your mind continue to see your Ferraris as your working assets you are in fact looking at them as part of your portfolio. Since they almost always are bad investments you should in fact be fired from managing your own portfolio for converting value adding assets to shrinking sh1t. Think about it.

It might be a good idea to look at what your assets are generating and not to consistantly strain your real assets' growth. But then again, the older you get the less that seems to be relevant. A 25-yearold has a 20 years' disadvantage on a 45-yearold. 20 years, think about it! Taking your life milage into a "let's face it" consideration is actually great the older you get: I am closer to fish food and can allow myself to have more fun than a 25-yearold...! Think about it.

Another sensible view with regards to liquidity is to from the moment of purchase consider a brand new Ferrari worth what more or less is going to be its planed out value. That way it is not proposing any threat to liquidity should there be a world market melt down tomorrow. Speaking of the terrifying market melt downs, the older you get the fewer you are likely to see and the less they are likely to impact your real value situation. -Am I really going to worry about another melt down when I'm going to be fish food around the next corner? Think about it. The way the world population is growing, fish food is actually going to be in shortage, ensuring a price hike. So I'm even looking after my next generation at the same time. Think about it...

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post #8 of 13 Old 01-18-2011, 02:10 AM
 
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Quote:
Originally Posted by il Capolino View Post
+1
What's home free to spend is home free and a continued connection as proportion to total assets might not be an adequate view. If you in your mind continue to see your Ferraris as your working assets you are in fact looking at them as part of your portfolio. Since they almost always are bad investments you should in fact be fired from managing your own portfolio for converting value adding assets to shrinking sh1t. Think about it.

It might be a good idea to look at what your assets are generating and not to consistantly strain your real assets' growth. But then again, the older you get the less that seems to be relevant. A 25-yearold has a 20 years' disadvantage on a 45-yearold. 20 years, think about it! Taking your life milage into a "let's face it" consideration is actually great the older you get: I am closer to fish food and can allow myself to have more fun than a 25-yearold...! Think about it.

Another sensible view with regards to liquidity is to from the moment of purchase consider a brand new Ferrari worth what more or less is going to be its planed out value. That way it is not proposing any threat to liquidity should there be a world market melt down tomorrow. Speaking of the terrifying market melt downs, the older you get the fewer you are likely to see and the less they are likely to impact your real value situation. -Am I really going to worry about another melt down when I'm going to be fish food around the next corner? Think about it. The way the world population is growing, fish food is actually going to be in shortage, ensuring a price hike. So I'm even looking after my next generation at the same time. Think about it...
i like your "think about it" lolll
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post #9 of 13 Old 01-18-2011, 11:50 AM
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Sorry Boxer, I am not sure I understand the goal of asset distrubution mentioned concerning cars or any other item.

Passion is difficult to reason in terms of percentages. IF one is a car 'nut' [and I am talking certified] then percentages have no meaning and there is never enough to include > 100%. That is, some go into debt to acquire beyond their net wealth, not to mention they go into debt to maintain them. I know of at least two persons who have disolved marriages/relationships and still spend more at the peril of health and prolonged debt to maintain whatever goal they are trying to obtain.

I have even purchased when I shouldn't, but some lights seem to blind the better part of common sense.

For example: How many of us have learned the 'hard way' of acquiring a vehicle with stars in our eyes only to find we are [even temporarily] out of our league in repair costs to bring that item to specs, but [and I'm stupid in this regard] have continued on to make 'it whole'.

IF I take your 'reasonable' word as the key here, then only utility vehicles need apply. Otherwise it would be like buying several toasters where only one realy suffices.

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post #10 of 13 Old 01-21-2011, 09:45 AM
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If I look around me at the guys who have more than just a daily driver, I would think that their car portfolio is probably about 10% of their property portfolio value

the exceptions are where cars such as 275gtb have shot up over the last decade and distorted the percentage, so perhaps car cost of 10% makes more sense

this is just an observation - perhaps they have found that the grief levels from the minister for domestic affairs are bearable at this level...?
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post #11 of 13 Old 01-21-2011, 01:38 PM
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Originally Posted by tonyt View Post

the exceptions are where cars such as 275gtb have shot up over the last decade and distorted the percentage, so perhaps car cost of 10% makes more sense
I assume that by cost you mean value on date of purchase? The costs of the car would have to be inflation corrected and subtracted upon the sale of the car in order to have a meaning to the operation as a whole. I'm just nit picking a little bit.

Finance is really not my thing and I do not look at the total value of my Ferraris as connected to my assets nor as part of my investments (which you might have noticed in my earlier posts). I look at my Ferraris as my sons. How can I possibly see my sons as part of an asset balance? The only finance term I can relate to them is having a decent clue of what they want me to spend on them.

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post #12 of 13 Old 01-21-2011, 01:54 PM
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that's an interesting take: I kind of like it.

Like said: Passion has no percentage of assets, and is not a consideration if passion is the key. IF one is 'investing' for asset management, then it is a long term picture void of common sense as typically one invests much more in maintenance and such over the years to 'recoup' said investment. But the pleasure of its use outweighs the costs....

Like said Capo: Family has more value than a number on a balance sheet.

Guide to the Galaxy: Don't Panic
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1990 Mondial T Cabriolet SN 86247 : Red/Tan
1995 456 GT 2+2 SN 99987 : Roso Metalizzato [Fer 311/C] & Tan
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post #13 of 13 Old 01-22-2011, 02:09 AM Thread Starter
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Quote:
Originally Posted by tonyt View Post
the exceptions are where cars such as 275gtb have shot up over the last decade and distorted the percentage, so perhaps car cost of 10% makes more sense

Good point, as other assets have taken a pounding in the last 2 years, classics have at least held value. Therefore as a percentage, they are by default increasing.
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