Podcast Summary: Ramsey Everyday Millionaires Episode: Can I Afford a $80K Tesla? Release Date: March 10, 2025

Introduction

In this episode of Ramsey Everyday Millionaires, the Ramsey Network hosts delve into the financial considerations of purchasing a high-end vehicle, specifically an $80,000 Tesla Model S. The discussion centers around whether such a significant investment aligns with prudent financial management, even for individuals with substantial income and net worth. Hosted by Dave Ramsey, Ken Coleman, Rachel Cruze, George Kamel, Jade Warshaw, and Dr. John Delony, the episode features a guest appearance by Brian from SmartVestor, who seeks advice on his potential Tesla purchase.

Guest Profile: Brian from SmartVestor

Timestamp: [00:22]

Brian introduces himself as a professional from SmartVestor based in San Antonio, Texas. With an impressive annual income of $360,000, Brian presents his financial scenario to the Ramsey team. He discloses a net worth of $1.2 million, excluding his house, and indicates that he has the cash to purchase the Tesla outright. Brian's query is straightforward: Is investing $80,000 in a new Tesla Model S a financially sound decision?

Ken Coleman's Financial Assessment

Timestamp: [00:35 - 02:53]

Ken Coleman takes the lead in evaluating Brian's situation. He begins by reaffirming Brian's eligibility based on his income and net worth. Ken states:

“We tell people not to buy a brand new car unless they've got at least a million dollar net worth.” [00:59]

This rule of thumb emphasizes financial stability before making large, depreciating purchases. Ken highlights that new cars, including Teslas, typically depreciate once they leave the dealership. He explains:

“New cars go down in value, including Teslas. They don't go up, they go down.” [00:59]

Ken reassures Brian that spending $80,000, which is less than a quarter of his annual income, is manageable within his financial framework. He contrasts this with a hypothetical scenario of an individual earning significantly more, stressing that the percentage of income dedicated to such purchases remains the crucial factor.

“You made 360, you can afford a $80,000 car.” [02:15]

Ken also addresses the importance of avoiding debt, noting that Brian plans to pay for the Tesla in cash, which further solidifies the financial prudence of the purchase.

Depreciation and Asset Considerations

A significant portion of the discussion revolves around the depreciation of luxury vehicles. Ken emphasizes that:

“You can't afford a depreciating asset that's brand new when you drive it off the lot. That sound blump, blump.” [00:59]

He advises that only those with a net worth exceeding $1 million should consider purchasing new luxury cars, as they can absorb the initial depreciation without jeopardizing their overall financial health.

Furthermore, Ken compares Brian's situation to that of a high-earner, illustrating that the absolute amount spent is less important than the proportion of income allocated:

“If you made 15 million last year, you can afford a $400,000 car.” [02:10]

This perspective reinforces the idea that financial decisions should be relative to one's income and net worth, rather than being viewed in isolation.

Hosts' Banter and Perspectives on Teslas

The conversation transitions into a lighthearted exchange between Ken Coleman and Dave Ramsey regarding Tesla vehicles. Ken humorously remarks on his preference for traditional car sounds:

“I need like an app for it. Make some muffler sound. Because a redneck needs a loud muffler and that's just all there is to.” [03:15]

Dave responds with skepticism about the auditory experience of Teslas:

“You like the hint of petrol in the air you drive.” [03:35]

Despite the banter, there's an acknowledgment of the growing popularity and appeal of electric vehicles among the hosts, as seen with Rachel and George using Teslas.

“Rachel are on the air with their little Teslas.” [02:55]

This segment adds a relatable touch, showcasing that even financial experts have personal preferences and humor when discussing lifestyle choices.

Conclusion and Key Takeaways

Ken Coleman wraps up the discussion by affirming that Brian's plan to purchase the Tesla is financially sound given his substantial income and net worth. The key takeaways from this episode include:

1. Assess Your Financial Position: Before making significant purchases, evaluate your income, net worth, and whether the expense aligns with your financial goals.

2. Understand Depreciation: Recognize that new luxury vehicles depreciate rapidly. Ensure that such assets do not constitute a disproportionate part of your investment portfolio.

3. Affordability Relative to Income: The affordability of large purchases should be measured against your annual income rather than the absolute price tag.

4. Avoid Debt: Paying for expensive items in cash can prevent debt accumulation and maintain financial stability.

Brian's case exemplifies how individuals with high earnings and substantial net worth can make luxury purchases responsibly without compromising their financial well-being.

Notable Quotes

• Ken Coleman: “We tell people not to buy a brand new car unless they've got at least a million dollar net worth.” [00:59]

• Ken Coleman: “You made 360, you can afford a $80,000 car.” [02:15]

• Ken Coleman: “If you made 15 million last year, you can afford a $400,000 car.” [02:10]

• Ken Coleman: “I need like an app for it. Make some muffler sound. Because a redneck needs a loud muffler and that's just all there is to.” [03:15]

• Dave Ramsey: “You like the hint of petrol in the air you drive.” [03:35]

Final Thoughts

This episode of Ramsey Everyday Millionaires offers a nuanced perspective on high-value purchases, balancing financial wisdom with personal lifestyle choices. It underscores the importance of contextual financial decision-making and provides listeners with actionable insights on managing significant expenditures responsibly.