Thunderbird economics

[theflash]

Re: Thunderbird economics

Buy low, sell high.

[Hannah3]

Re: Thunderbird economics

First of all, no one has 'lost'. Unless you bought the car for investment pruposes you paid for your enjoyment. I don't know why so many people use the term 'lost' when speaking of depreciation. You bought something and used it. Do we say that about computers or refridgeraters or tv's? Secondly, please don't put much heed in that figure of $26,500. I would be astounded if you got more than $24k on a very good day.

[NotU]

Re: Thunderbird economics

Bill, that trip log thing isn't working...I'll keep trying, I'm not ready to give up on it yet. Computer related things just take me a while.
As for where the car has been: North & South Dakotas, Montana, Idaho, Wyoming, Colorado, Kansas, Nebraska, Missouri, Iowa, Illinois, Wisconsin, Indiana, & Ohio, as well as Manitoba, Alberta and British Columbia. It came from New York before I bought it.
Martin, I still have the 65 convertible (and a 65 hardtop but that's another story). It's blue. Not an original color, just a blue metallic, close to what I would call a royal blue. We've driven that one to all the above, except Alberta and British Columbia, plus Arizona, Utah, Nevada and California. That one was originally sold in Florida.
Lots of stories. We were having car problems with the '65 on the California trip...my wife was almost in tears over it. She was threatening that she would never do this again. I was able to calm her down with, "We're making memories here!". Boy, was that a true statement. Anyway, the '05 is now our traveling car and the '65 stays close to home.
Randy

[bronzebird]

Re: Thunderbird economics

First of all, no one has 'lost'. Unless you bought the car for investment pruposes you paid for your enjoyment. I don't know why so many people use the term 'lost' when speaking of depreciation. You bought something and used it. Do we say that about computers or refridgeraters or tv's? Secondly, please don't put much heed in that figure of $26,500. I would be astounded if you got more than $24k on a very good day.

de⋅pre⋅ci⋅a⋅tion  [di-pree-shee-ey-shuhn]
–noun
1. decrease in value due to, decay, decline in price, etc.
2. such a decrease as allowed in computing the value of property for tax purposes.
3. a decrease in the purchasing or exchange value of money.
4. a lowering in estimation.
de.crease (di-creese)
–noun
3. the act or process of decreasing; condition of being decreased; gradual reduction or loss: a decrease in sales; a decrease in intensity.
4. the amount by which a thing is lessened: The decrease in sales was almost 20 percent.

[Hannah3]

Re: Thunderbird economics

de⋅pre⋅ci⋅a⋅tion  [di-pree-shee-ey-shuhn]
–noun
1. decrease in value due to, decay, decline in price, etc.
2. such a decrease as allowed in computing the value of property for tax purposes.
3. a decrease in the purchasing or exchange value of money.
4. a lowering in estimation.
de.crease (di-creese)
–noun
3. the act or process of decreasing; condition of being decreased; gradual reduction or loss: a decrease in sales; a decrease in intensity.
4. the amount by which a thing is lessened: The decrease in sales was almost 20 percent.

I'm not talking about the dictionary meaning of depreciation. I am talking about loss in the colloquial sense of the word, unless of course we are talking about a business investment and that's a whole different story. When you buy a tv and five years later there is little or no value do you consider that as a loss? If you enjoy and drive the car you are paying for those miles. You have received value. The difference between the price you paid and the residual cash value of the car is not a loss. In business it is an expense. Not a loss. You would not have made revenues without the investment similarly you would not have had any enjoyment or use of the car unless you bought it. Do you consdier that you have made a 'loss' every time you take money out of your pocket or write a check?

If you bought stock in Citibank at $60 per share and sold it at $5 per share that is surely a loss. Your sole purpose of making the purchase was under the assumption that the sale price would increase. (In fact only part of th e $55 difference is a loss if you took dividends along the way).

Please tell me you understand the difference.

[bronzebird]

Re: Thunderbird economics

Jim:
I bought a two year old APHA paint horse for my wife in 2002 at a cost of $5,500. We nurtured him, fed him, groomed him and trained him and we now have an excellent horse skilled in dressage, show jumping and trail riding. He is now almost ten years old and is worth about $10-12,000. That horse has been enjoyed for the past seven years but has gained value. We are not in the equestrian business but it is still a gain.
I liken my Thunderbird purchase to that horse. I have maintained it and added items like whitewalls, Borlas, dash kit, upgraded sound system, etc. and it is better than when it was new. Unlike the horse it has depreciated but not substantially, and the difference in that value I call a loss and no, we are not in the automobile business either.
Our financial net worth is based on the value of things we own. Some have gained in value and some have lost. Every time we make a major investment in something, be it a home, car, horse, jewelry, artwork, etc. we either gain or lose at any given moment in time. Right now I am showing a small loss on the T-Bird. You go with your definition and I'll go with mine.

[Hannah3]

Re: Thunderbird economics

Jim:
I bought a two year old APHA paint horse for my wife in 2002 at a cost of $5,500. We nurtured him, fed him, groomed him and trained him and we now have an excellent horse skilled in dressage, show jumping and trail riding. He is now almost ten years old and is worth about $10-12,000. That horse has been enjoyed for the past seven years but has gained value. We are not in the equestrian business but it is still a gain.
I liken my Thunderbird purchase to that horse. I have maintained it and added items like whitewalls, Borlas, dash kit, upgraded sound system, etc. and it is better than when it was new. Unlike the horse it has depreciated but not substantially, and the difference in that value I call a loss and no, we are not in the automobile business either.
Our financial net worth is based on the value of things we own. Some have gained in value and some have lost. Every time we make a major investment in something, be it a home, car, horse, jewelry, artwork, etc. we either gain or lose at any given moment in time. Right now I am showing a small loss on the T-Bird. You go with your definition and I'll go with mine.

Sure, my only point is that the term "loss" is used universally by accountants and of course the IRS. None of these people would call depreciation on a modern motor vehicle a 'loss'. The fact that one's net worth goes down from one year to the next is not considered a 'loss'. If you gave a bunch of money to charity your net worth might decrease but no one would say you suffered a loss. The term has a negative connotation and also denotes some kind of bad fortune. Anyone that buys a late model car who thinks they are going to retain value or even gain is sorely misgudied. Therefore why would anyone want to go into a purchase knowing they are going to make a loss? It's just the wrong term. Horses are one of the very few usable assets that sometimes appreciate in the manner you describe. Gold jewlery may fall into the same category. The gold I have bought for my wife over time has appreciated in value. It used to be houses but not so much anymore. But again, never modern cars. But of course we can agree to have our own terms. Virtually all of us are suffering losses from our t-bird purchases by your definition. In mine, even in the non-technical sense of the word, unless you have the reasonable expecation of gain or even par value at sale it can't be considered a loss. Like most non-investment items, you buy them, you use them and then you either throw them away or resell for something much less than your original purchase price. I prefer to say that we are all gaining great value and any residual cash we might earn at the end of the day are 'GAINS'! I have some time to kill as you can see and after 32 years in the banking business I guess I just get oversensitive about this kind of thing.

[bronzebird]

Re: Thunderbird economics

Jim:

We sure are wordy aren't we?

I guess I have too much time on my hands as well.

I spent 48 years in the newspaper business and right now I am glad I retired when I did.

I have a number of friends in the banking business who wish they had done the same.

Both businesses have taken a lot of lumps in the past couple of years.

Are you still in it?

[Hannah3]

Re: Thunderbird economics

Jim:

We sure are wordy aren't we?

I guess I have too much time on my hands as well.

I spent 48 years in the newspaper business and right now I am glad I retired when I did.

I have a number of friends in the banking business who wish they had done the same.

Both businesses have taken a lot of lumps in the past couple of years.

Are you still in it?

Yeah, exclusively in emerging markets project finance. We are going great guns. No silly real estate plays and no outrageous derivatives. Only highly developmental win win deals. In fact local affected communities must approve each project. In any event no day goes by without discussing profits and 'losses' so....

Newspapers. Wow, I still have a subscription. We are dinasours I'm afraid. It wouldnt bother me too much if I thought the the younger generations were actually finding in-depth news somewhere else but I'm afraid they aren't even looking.

[FUN X 3]

Re: Thunderbird economics

This has been an interesting exchange to follow. My Bird has 90,000+ miles on it now, don't feel like I've lost anything, been positives all the way. No intention of selling, just driving it until it won't go anymore. Yes, newspapers are on the way out, people just don't get their news the way we do/did. I've been struggling with the decision to cancel my subscription to The Washington Post, but just can't do it yet.

Good banks should be making money hand over foot in the current economy. I certainly can't make anything on my deposits.

[Bird03]

Re: Thunderbird economics

My purchased new Torch Red has depreciated about $12,000.

My purchased used Inspiration Yellow has depreciated about $2000.

Between the two, six years and 70,000 miles of driving for a total cost of $14,000. I don't think you can beat that with any other cars.