Wickedfire Member Buys a Website, then Pays for a Ferrari with it



okuma31 said:
so you made rich dad poor dad a blog post?
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Shut the fuck up.

I enjoyed it and it makes sense. 20k towards a down payment on a Ferrari gets you nowhere because you still have to come up with the monthly payments. 20k also won't buy a Ferrari on it's own.

However by leveraging an income producing asset you have long term asset that pays for the Ferrari itself. Even after it's paid you still own the asset that is still producing income for you. Brilliant.
 
20figures said:
I enjoyed it and it makes sense.
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If you can get a 10% monthly dividend on every investment you make, then yes, it makes perfect sense!

That, and it's just really stupid advice. "$2100/month car payments? Yeah, that's fine. I just bought a new website that my buddy is going to manage. That'll cover all the payments until it's paid off, so no worries!". Probably not the wisest thing to do.
 
Kiopa_Matt said:
If you can get a 10% monthly dividend on every investment you make, then yes, it makes perfect sense!

That, and it's just really stupid advice. "$2100/month car payments? Yeah, that's fine. I just bought a new website that my buddy is going to manage. That'll cover all the payments until it's paid off, so no worries!". Probably not the wisest thing to do.
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It's fine as long as he's properly managed the downside risk.

If he has an agreement with the leasing company that if shit goes south, he can hand back the keys and walk away with very little to pay (and no damage to his credit record), then he's been smart. But if he's locked into a 3 year deal with no reliable way to pay the rent on the car, not so smart.

There's a flipside to all "don't be so risk averse you'll never get anywhere". A lot of entrepreneurs (me included in the past) don't think through risks properly, and are too optimistic. This is just as damaging as being overly risk-averse.
 
To be honest this sort of thing is fantasy bullshit.

I hate the 4 hour work week.

There are so many special "systems" that cater to exactly what the hopeful lazy reader wants, i.e. with the 4 hour work week - yes you can do no work and party all the time but also be rich/make enough money to live like a king/prince/minor feudal lord/roving paper merchant/moron.
 
Also, on re-reading this, the maths is flawed because they've skipped over details (unless he just hasn't put them, in the post):

1. What about tax? Depending on other earnings, $2k a month -> 1-1.5K a month post-tax income. Unless you fancy trying to claim a Ferrari as a "business" expense. (I may be wrong here - maybe you guys have more relaxed rules on company cars)

2. Is $2k a month really the Total Cost of Ownership of a Ferrari? What about insurance, road tax, fuel?

3. What's the exit cost of the deal if it goes wrong?

4. Has he factored in maintenance costs? Anyone who's owned a fancy car (especially an Italian fancy car) can tell you that the service bills are enormous.

All in all, you'll probably need to make $5-6k pre-tax a month to cover a Ferrari that you originally thought was only $2k a month.
 
amateursurgeon said:
It's fine as long as he's properly managed the downside risk.
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No, it's just extremely stupid. You don't throw $30k at a friend, then rush out and lease a Ferrari, with hopes that your friend will begin sending you say $2500 checks every month due to your investment. That's beyond delusional.

Like pixelo said, just some guy pandering to the poor, lazy people who want to be rich without working for it. He probably makes decent coin by doing it though, so kudos to him for that! :)
 
I don't see anything wrong?

Basically the guy decided that instead of using his money to buy a car he would put his capital to work and buy an income generating asset that produced enough money to cover the monthly cost. Obviously once the car is paid off he would still have an asset that generates income, from the standpoint of an investor that's not a bad idea at all. But one thing that probably should be mentioned as a disclaimer is obviously the guy had the money to outright buy the ferrari if he wanted to, so if something came up and the website no longer generated any money he wouldn't find himself in a hole.

If you're living paycheck to paycheck then this probably isn't a good idea, but if you have enough of a bankroll to finance big purchases this way why would you want to tie up capital if you don't have to?
 
ayzo said:
If you're living paycheck to paycheck then this probably isn't a good idea, but if you have enough of a bankroll to finance big purchases this way why would you want to tie up capital if you don't have to?
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When all of your big purchases are made with projected incomes on risky investments, it's a good way to end up really poor, really quick.
 
Kiopa_Matt said:
When all of your big purchases are made with projected incomes on risky investments, it's a good way to end up really poor, really quick.
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If the projected income was your only income then yea but he had the money to outright buy the car anyway if he wanted to, which he eventually did.
 
Kiopa_Matt said:
When all of your big purchases are made with projected incomes on risky investments, it's a good way to end up really poor, really quick.
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But if this is an online store with a proven track record, how can it be a risky investment? It's not like they're sinking their money into a new product.
 
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Why does everyone on WF give 2 shits anyways?

I do think the math is totally fucking wrong though like it was said above. Taxes and insurance are the 2 most fucking killer things in life when it comes to money ( if your American ).

I didn't read the blog post entirely, but I have bought websites, bought cars, etc, etc and any income this dudes gets will be taxed unless he has some shit set up where he is not American and a Ferrari will not be a business expense unless he tries to pull off that he has some "exotic" car wash or dealership he is setting up ( which still prob wont fly well ).

So if this person is somewhat successful already and is in the top federal tax bracket, and for benefit of the doubt, in a no tax state, then that $2k monthly revenue is going to be more like $1300 when done and said. I know there are some ways to reduce this, but this is just simple talk here. If they are in a tax state, well this could be taxed even more.

So with $1300 a month, he buys a Ferrari which will incur taxes, insurance, and ( trust me on this ) high/more freq. maintenance done to it then a new Honda/Ford. Pretty much every 3k miles is more then a "oil" change on these cars. Even on a lease, your gonna be out some coin just to drive it and have it in your driveway, let alone the gas and other costs for upkeep.

I think a more interesting story is how you keep ( and drive/have fun with ) a new-ish Ferrari with only $1300 a month income. Hell, lets just assume he kept the full $2k some how.. Still not going to be doable on that income ALONE and be driving it 2-3x a week very far.
 
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