Car Purchasing Decision: Minivan or Not?

My wife and I are actively working on buying a replacement car. My 1998 Nissan Sentra is currently having some problems (significant oil leak) and I've decided that I don't want to continue to invest in the car since we plan to replace it in the near future.

The biggest discussion point for us has been whether or not we think we need to purchase a minivan for the family or a commuter car for myself. My wife currently drives a small SUV, a Hyundai Santa Fe, that we really enjoy and our family currently can manage distance travel in. However we recognize our family needs are continuing to evolve and while we don't have an immediate requirement for a minivan we recognize that a minivan will be more practical and a longer term need for us.

Of course I am always focused on the numbers. Its hard for me to justify spending an extra ~$10,000 for a perceived convenience / need in the future. A minivan offers a number of small conveniences, however an extra $10,00 in our pocket could be allocated a number of ways:
1) A weekly home housecleaning for nearly 2 years
2) A large family vacation
3) A significant part of one of our child's college education
4) A sustained increase in our food/dining out budget

In the end if we do buy a minivan the financial numbers won't support it. That doesn't necessarily mean its a bad decision for us. If our primarily goal was to maximize our savings, the minivan discussion would end here. If other priorities such as convenience, social opportunities, and family travel are important then there is a lot of merit of considering spending more for a family minivan. I'd love to hear you comments especially if you have made the decision to purchase a minivan for your household.


March 2014 Net Worth Update (+$14,117)




Highlights for February

  • We are close to finishing up earning $1,000 in credit card signup bonuses for 2 credit card signups w/ spending requirements. Im not spending extra, but focusing our spending on these new cards to earn the bonuses and doing some round trip transactions via Amazon payments.
  • Our properties are listed on our balance sheet based on their cost basis, not current market value. We have done this during the the real estate market highs and lows. I believe real estate is too illiquid to list based on recent sale transactions. For those interested, our March Zillow property estimates are: $214,226; $130,844; $300,002; and $234,647 (total: $879,719 vs $751,255 on balance sheet).
  • Our March net worth growth was about average and largely attributed to paper gains in the stock market.
  • We had a double payment show up on House #2 Mortgage this month
  • We put a new roof on House #2 this month. I got a couple quotes and was to get the roof replaced for $3,300, roughly 1/2 the highest quote provided.
  • In April our net worth will likely take a hit as we are actively looking for a replacement car. I've had my 1998 Nissan Sentra for almost 15 years and it hasn't been running well since we returned from China. I've reached the decision that its time to replace the car rather than repair it.


Chairmen Letters to Shareholders

Its that time of year again --the close of fiscal years means an overload of annual reports including Letters to Shareholders. Two annual letters that I read each year are those from Berkshire Hathaway (Warren Buffet) and Fairfax Financial (Prem Wasta). Both of these annual letter to shareholders have been posted in the past couple weeks for 2013.

Some highlights from Warren Buffet's Letter to Shareholders:

  • Berkshire spent $18 billion on 2 large investments in NV Energy and Heinz and continues to look for more elphapents.
  • Charlie and Warren have always considered a “bet” on ever-rising U.S. prosperity to be very close to a sure thing.
  • The letter seemed overall upbeat with the primary economic concern being the timebomb associated public pension obligations.

Some highlights from Prem Wasta's Letter to Shareholders:

  • Fairfax remains convinced that 2008 was a 1 in 50 or 1 in 100 year event that hasn't fully played out.
  • Prem remains very concerned over the potentially devastating effects of a hard landing in China (as am I). He cites several stats including home ownership rates in China estimated to be over 100% versus 65% in the U.S.
  • Inflation in the U.S. and Europe, after five years of huge fiscal stimulus, is still in the 1% area – and falling.
  • Prem continues a very conservative posture to protect capital. He cites a Ben Graham warning in the letter - "Only 1 in 100 survived the 1929-1932 debacle if one was not bearish in 1925.’’ Prem indicates he continues to be early – and bearish!

Regardless of your economic persuasion, both these highly respected investors should be a must read.


February 2014 Net Worth Update (+$21,948)




Highlights for February

  • We are in the middle of earning $1,000 in credit card signup bonuses for 2 credit card signups w/ spending requirements. Im not spending extra, but focusing our spending on these new cards to earn the bonuses.
  • Our properties are listed on our balance sheet based on their cost basis, not current market value. We have done this during the the real estate market highs and lows. I believe real estate is too illiquid to list based on recent sale transactions. For those interested, our February Zillow property estimates are: $214,838; $130,790; $298,749; and $236,374 (total: $880,751).

  • Our February net worth growth was better than I expected, largely due to paper gains in the stock market.
  • We had additional reimbursements from my employer from our foreign work assignment last year which boosted our cash flow for the month.
  • Otherwise February was a very quiet month for us. We have two looming purchases in the next couple months: a new roof for a rental property, and a replacement car for myself we are gearing up for.


Investment Performance January 2014 (-2.94%)

January 2014 Investment Report:

January Highlights:

  • January was a bad way to start out the year, but our portfolio performed slightly better thank our benchmark (-2.94% vs -3.17%).
  • We made our regular monthly investments in our Roth IRAs, and some dividends & dividend reinvestments.
  • It was an active month as we took a more substantial amount out of our investments by selling portions of our Genworth (GNW) and Bank of America (BAC) holding as they hit new highs.
  • I don't see a whole lot that I'm excited about in the short term so I expect I will be holding a bit higher amounts of cash this year until there is something compelling.
  • Our recent monthly returns were: Jan 09 -4.98%, Feb -9.94%, Mar +8.45%, Apr +10.88%, May +4.65%, Jun +0.89%, Jul +9.94%, Aug +4.36%, Sept 3.15%, Oct -2.34%, Nov +5.83%, Dec +1.85%, Jan '10 -2.34%, Feb +2.25%, Mar +5.88%, Apr +2.54%, May -8.13%, June -5.64%, July 6.17%. Aug -4.87%, Sept +8.48%, Oct 2.47%, Nov -0.96%, Dec +8.01%, Jan 2011 +2.06%, Feb 2.57%, Mar +0.15%, Apr +3.04%, May -1.56%, June -1.63%, July -2.71%, Aug -5.42%, Sept -7.06%, Oct +9.88%, Nov -0.39%, Dec +2.10%, Jan '12 +4.03%, Feb +4.68%, Mar +2.35%, Apr -1.74%, Sept +3.47%, Oct 0.10%, Nov -0.20%, Dec +3.09%, Jan '13 +6.72%, Feb +0.49%, Mar +4.52%, Apr +1.30%, May +2.87%, June -0.97%, Jul +6.45%, Aug -3.67%, Sept +3.28%, Oct +5.09%, Nov +2.31%, Dec +2.20%, Jan 2014 -2.94%.....

Note this is our monthly personal investment portfolio report. I view our ability to invest with above average rates of return as the most important factor in reaching our financial freedom goals. This investment report covers our taxable portfolio and IRA retirement accounts. My 401k (which is roughly 1/2 our portfolio) is not included as the index funds it includes are not publicly traded and difficult to incorporate in this report.


Last 15 Personal Finance Entries


02/15/2014 | 2013 Net Worth Growth
02/09/2014 | January 2014 Net Worth Update (+$4,719)
02/02/2014 | Earning $1,000 in Credit Card Promotions
01/25/2014 | 2013 Passive Income: Dividends
01/19/2014 | Water Heater Timer Project
01/10/2014 | Investment Performance December 2013 (+2.20%)
01/05/2014 | December 2013 Net Worth Update (+$24,052)
01/01/2014 | Wrapped China Assignment, Round 2
12/17/2013 | Investment Performance November 2013 (+2.31%)
12/04/2013 | November 2013 Net Worth Update (+$23,958)
11/27/2013 | North Carolina 529 College Savings Plan Contributions No Longer Tax Deductible
11/12/2013 | QE: The Good and the Not So Good
11/05/2013 | Investment Performance October 2013 (+5.09%)
11/04/2013 | October Net Worth Update (+$40,500)
10/14/2013 | Packing Tips for Extended Family Travel

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A personal finance weblog of my journey to reach my goal of $2 million + the value of my primary residence.
Current Net Worth: $1,266,600

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