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Thread: Car to house value ratio

  1. #121
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    1250% and I drive my house

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  2. #122
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    Quote Originally Posted by Nakadah View Post
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    You guys have taken quite an interest in my theory and perhaps it would have been better if I shared less, however, allow me to expand a little on what I said. There has been an increase in home valuations in Canada for some time which has let to the increase indebtedness of Canadians and an increase in the cost of living. Different cities in Canada have been affected differently as pointed earlier - i.e. Vancouver vs. Calgary vs. Toronto. I should believe that we all agree that having a home is a requirement in one's life and it is the foundation which is required for one to take their life further. In Calgary's case let's say that the average asking price of a house is ~$500k and the average before tax individual income is ~$50k. Due to the high valuations of homes the vast majority of one's income goes into covering home associated costs/expenses which include more than just mortgage - i.e. property tax, maintenance, repairs, etc. After all home and food expenses/costs do you have some discretionary income which you can spend in whatever way you like - i.e. cars, jewelry, vacations, hobbies, etc... The argument that I make is that because so much of one's income goes into covering home costs one is left with very little discretionary income and hence has no choice, but to drive a 12 year old corolla. I completely understand that not everyone cares about cars, but I believe that if given the choice people will chose to drive something that is newer and more comfortable. I chose the ratio of home values to car values because for many people their car is their second most expensive purchase. I certainly would not expect to see someone with a $40k watch driving a 20 year old Rav4. We can expand on this a little and make an argument that as a result of what is considered normal the speed at which money changes hands slows - i.e. velocity of money. The effects of this will manifest in lower foot traffic in stores/establishments which will manifest in a contraction in the aggregate economy. If you want more craziness you could link the velocity of money in an economy to the country's fiscal and monetary policies, but this is not for me.

    If an average home is the foundation required for individuals to step on than a 7 figure home is an aspirational home which few have the opportunity to live in. If one is able to afford to live in such a home than I believe that they should be able to afford more in all other areas in their life -i.e. go to nicer restaurants, go to nicer vacations, be better dressed, and in this case drive an exotic. I know that Shakalaka has an Aston Martin, but my argument is that I would not be surprised to see a Huracan in his garage.

    The exact ratio is not important and what your ratio is isn't relevant either, however 1 to 100 is a stark contrast which in my opinion should not exist. In here I attack the valuation of an average home and argue that it should not be $500k. As pointed earlier, in Toronto and Vancouver my theory paints an even starker contrast and people there in general have a lower quality of life than Albertans. Recent statistics showed that nearly 50% of Canadians have no savings and that a further 25% will have difficulties with covering an emergency cost of $500. At some point I read somewhere that ~12-14% of mortgages in Canada have been deferred during the pandemic, which supports the idea that Canadians have little in savings. 12-14% is the equivalent of 1 in 7.

    To those that will argue that home values never go down I will ask them to look up recent examples in the USA, Spain or Ireland. This has also happened in Canada both in Calgary and in Toronto more than 30 years ago. You can make the argument that the lot on which a home is built does not depreciate, however the building itself does amortize and so does the infrastructure in the neighborhood. You don't want to drive on streets that are full of potholes, do you? Communities also change and what might have been a desirable community quickly could become the opposite - i.e. a garbage processing facility built in there. This also applies to cities, provinces and countries. History is no prediction for the future.

    What I am saying does not apply to the margins, but rather ~1 st. dev. from the mean.
    This is all horseshit... I hope you feel better after Marilyn Manson-ing yourself

    People have different priorities and it's impossible to draw any conclusions based on some arbitrary ratio you deem to be 'correct'.

    My current ratio is higher than some, but it's also been higher in the past, when I was single with no responsibilities and a smaller home.

    A colleague of my mom's was a very well paid doctor that had a thing for Pateks, particularly vintage ones. His watch collection surely exceeded the value of his home. He also drove a 30 year old Checker (like the old-school NYC cabs)...

    The wealthiest person I know also happens to like cars... The value of the cars in his garage probably exceeds the value of his home by 10:1 (and it's a really nice house)... But he could also buy a sports team for fun...

    The point is, you just don't know, so like Cam said, it's better to give the benefit of doubt.

  3. #123
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    question for the real beyond ballers.

    What about watch value to home value?

  4. #124
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    Quote Originally Posted by Sorath View Post
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    question for the real beyond ballers.

    What about watch value to home value?
    This MF just is trying to shift the focus from his 1:1 house:car ratio

  5. #125
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    I stopped reading at $50k gross income. Didn’t realize we were talking about students and panhandlers.

  6. #126
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    We really just do need to quit with these indirect comparison threads. Everyone should just put their personal balance sheet into their profile and be done.

  7. #127
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    Quote Originally Posted by Buster View Post
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    We really just do need to quit with these indirect comparison threads. Everyone should just put their personal balance sheet into their profile and be done.
    Personal??? That’s not very tax efficient

  8. #128
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    Quote Originally Posted by ercchry View Post
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    Personal??? That’s not very tax efficient
    you give your assets to someone else to hold?

  9. #129
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    Quote Originally Posted by Buster View Post
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    you give your assets to someone else to hold?
    Holding co? That’s not personal

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    Quote Originally Posted by Sorath View Post
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    question for the real beyond ballers.

    What about watch value to home value?
    Like? Your collection or just your most expensive?

    I think my nicest watch is worth more than the car parked in my driveway if that makes Nakadah feel better?
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
    fact.
    Quote Originally Posted by Yolobimmer View Post
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    guessing who I might be, psychologizing me with your non existent degree.

  11. #131
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    I have no war he's worth more then 2 figures. I win.
    Quote Originally Posted by killramos View Post
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    You realize you are talking to the guy who made his own furniture out of salad bowls right?

  12. #132
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    Quote Originally Posted by ExtraSlow View Post
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    I have no war he's worth more then 2 figures. I win.
    Have another beer why don’t you
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
    fact.
    Quote Originally Posted by Yolobimmer View Post
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    guessing who I might be, psychologizing me with your non existent degree.

  13. #133
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    I'm confused, am I supposed to have a Lada outside of my Aspen home or do I have a Maybach in the carport in Dover? Which way is the goal?
    "Masked Bandit is a gateway drug for frugal spending." - Unknown303

  14. #134
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    Maybach in dover is the way to go, but only while wearing a vintage Patek.

    I legit had to look up where Dover is.
    Originally posted by Thales of Miletus

    If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
    Originally posted by Toma
    fact.
    Quote Originally Posted by Yolobimmer View Post
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    guessing who I might be, psychologizing me with your non existent degree.

  15. #135
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    Quote Originally Posted by killramos View Post
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    Maybach in dover is the way to go, but only while wearing a vintage Patek.

    I legit had to look up where Dover is.
    I legit had to look up what Patek was.
    "Masked Bandit is a gateway drug for frugal spending." - Unknown303

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    Quote Originally Posted by killramos View Post
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    Like? Your collection or just your most expensive?

    I think my nicest watch is worth more than the car parked in my driveway if that makes Nakadah feel better?
    Mustangs don’t count, but congrats n having a driveway? Not sure... speedog says those are for the poors outside the innercity

  17. #137
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    Quote Originally Posted by killramos View Post
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    .
    I legit had to look up where Dover is.
    Just south of Bend.

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    Quote Originally Posted by killramos View Post
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    Have another beer why don’t you
    Shit. I haven't even been drinking today. That one is legit fumbleitis

    - - - Updated - - -

    Quote Originally Posted by ercchry View Post
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    congrats n having a driveway? Not sure... ExtraSlow says those are for the poors outside the innercity
    FTFY
    Quote Originally Posted by killramos View Post
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    You realize you are talking to the guy who made his own furniture out of salad bowls right?

  19. #139
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    Quote Originally Posted by ExtraSlow View Post
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    Shit. I haven't even been drinking today. That one is legit fumbleitis

    - - - Updated - - -

    FTFY
    Thanks for not fixing grammar, cheers! (From 2hrs later)

  20. #140
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    $500k here would get you a three car 2000sqft house with some land, where in Calgary you’ll be looking at row townhouses. What vehicles you have out front shows real wealth because they are the same price regardless of location. This is pretty common knowledge OP.

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