Contrary to popular belief, increasing one’s wealth and being able to afford luxury things are not exclusively reserved for those in high-paying finance careers.
With meticulous planning, acquiring investment knowledge, and making wise financial decisions, individuals can accumulate exponentially increase their wealth in the long term, particularly if they start early.
In this article, Finbold breaks down how individuals can afford the new 2023 Chevrolet Corvette through wise investments in just two years.
Picks for you
How much will the 2023 Chevrolet Corvette cost in 2025?
For instance, the new Corvette Stingray coupe in 1LT trim currently costs around $65,000, including the Manufacturer’s Suggested Retail Price (MSRP) of $61,900, plus a delivery fee.
Assuming that one plans to purchase this mid-engine sports vehicle by 2025, we have to take into account the factor of depreciation.
Historical data reveals that many cars experience a 20% decline in value within the first year of their launch, followed by an additional 15% depreciation per year until the four- or five-year mark.
With this in mind, if the Corvette Stingray loses 20% of its value within the first year, its price would go down to $52,000 in 2024. From then on, the car would theoretically depreciate by an additional 15%, meaning that it would cost around $44,200 in 2025.
So how much do I need to invest?
Now that we have a rough figure of how much the Corvette Stingray 1LT will approximately cost in 2025, we can move on to calculate the weekly amount one has to invest in order to afford the car for $44,200 in two years.
When it comes to investing, different financial asset classes offer different annual return rates. For instance, a conservative portfolio that is largely made up of bonds typically offers a return rate of 3%, while a mix of stocks and bonds can yield a 6% return per year.
Portfolios that consist mainly of stocks of index funds can net an annual return rate of 9% or even more, although such investments are considered high-risk, meaning that while they have the potential to offer larger returns, there is also a higher chance of a loss.
In this example, we will consider investments in assets with a 6% rate of return. That said, if one starts now, they would have to invest $980 per month in assets with a return rate of 6% to accumulate over $44,200 by 2025, in addition to an initial investment of $5,000.
In total, $35,280 in contributions would be required, yielding total interest earnings of $4,253.
In summary, to afford the Chevrolet Corvette by 2025, one needs a starting investing amount of $5,000, and allocate slightly less than $1,000 per month in mid-risk assets over the following two years, assuming that the car would cost around $44,200 based on historical depreciation data.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
