Imagine you are driving your 1999 Toyota Corolla ...
Imagine you are driving your 1999 Toyota Corolla and you pull up at the traffic lights next to a brand new Dodge Ram. You look up at the driver who is grinning at you from their shiny new vehicle, and you feel… jealous? Poor? Left behind? Well, you shouldn’t – and here’s why
 
Luxury vehicles are just one example of an asset that many people own, but actually can’t afford. A couple of years ago, luxury cars were few and far between here in Townsville, Queensland, where we are based. But somehow, as we’re writing this today, they seem to be everywhere. Expensive, large, luxury vehicles – like the Dodge Ram – are everywhere we look.
 
We’re not saying we don’t like Dodge Rams – we do. And we’re not saying don’t buy one. There’s no denying that they look great and are probably a very decent vehicle. But there’s also no denying that they come with a huge price tag. So how is it that this many people can afford to drive them?
 
The answer to that is: they probably can’t. The average superannuation balance per couple (in the age bracket of 55 – 64) is under $600,000. With that in mind, we really don’t think sinking $100,000 into a luxury vehicle is the best move.
 
During the 2020 / 2021 COVID-19 pandemic, we’ve seen people become incredibly fearful about what will happen to their money; whether it’s their income, or their shares, or their savings. Yet somehow, in 2021, people have also been really quick to forget what happened at the start of it all (in Australia, at least, where things are more or less back to normal excluding the ability to travel). We see the purchasing of Dodge Rams and other luxury vehicles as a proxy for people thinking the good times will just keep on rolling. But historically, we know that things don’t just keep going up and up. Australia hasn’t had a recession in over 30 years, which is pretty long for a developed country. And while that’s great, providing us a great opportunity to grow as a country and get ahead; we’re just not sure people are taking that opportunity seriously. Many take their income for granted instead. And not many people seem to have learnt a lesson from 2020 – and some think ‘the government will bail me out’. This is most definitely not true.
 
Having luxury assets doesn’t affect everyone negatively – to some, purchasing a Dodge Ram is a drop in the ocean – but in our experience, most people who do buy these cars simply cannot afford to. That is, they are well and truly out of their league financially.
 
So, we’re not saying don’t do it, we’re just saying that a large part of our population can’t, and shouldn’t, buy one. And just because your friend or cousin or neighbour has a big house and luxury cars doesn’t necessarily mean they’re well off financially – nor does it mean they have a financially secure future.
 
It can be really hard to keep up with the Joneses and saying no to luxury items. So, to you in your 1999 Corolla with the hole in the exhaust, we say: perhaps it is time to upgrade – but don’t go taking out a loan for a Dodge Ram. Don’t worry about the Joneses. If you’re making sure you spend less than you earn, and thinking about the future, you’re the one doing the right thing. 

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