Friday, January 16, 2009

This will be a post about the allocation of scarce resouces and a comparison of opportunity costs.

After my CT scan monday i learned on tuesday that all of the surgery and drugs has worked...or seems to have. My scan's were complete and there's no evidence of cancer anywhere! Without a doubt some of the best newsI've gotten recently. However it's kicked off a decision that must be made...a very hard decision.

I've wanted a corvette for a long time and the prices right now are getting so attractive that it's becoming increasingly difficult to not take the leap. 07 Z06's are running in the high 40's to low 50' about bang for your buck! I'm extremely tempted. but contrast that with my desire to go back to school and i've got quite a dilemma

Do i:

a) buy a Corvette


b) go back for a Masters in Economics

This question should be the entrance exam for school!

Here's my little list of pro's and con's along with an examination of the opportunity costs.

-Short term happiness will increase significantly. A want would be fulfilled.
-Although asset prices are under pressure, having my money in the bank (or cd's, or equities) isn't yielding very good returns. Putting it in a corvette won't be much worse..if any.

-Ownership will cost about 58k over 5 years. Borrowing costs are about 6% and banks are paying virtually nothing to me on my money so it hardly seems like the right time to borrow. That discrepency is too large
-I'd put about 15k down so i'll lose the interest on that over the next few years as well.
-Risk of future speeding tickets is...significant. Insurance costs may go up.
-my ability to save every month would be cut in half (roughly)

-School is an investment in myself. Long term happiness will increase as my future job prospects are improved with this degree.
-Initial capital outlay is far less then with the car.
-Grants/loans can help reduce the costs. 0% loans may be available.

-Decreases ability to leave this area for about 2 years.
-No garauntee that it will improve my life or job prospects, it may be a waste.
-Avg. of 2 classes per week is a lot of time. I've got a good girl and a band that need my time too!

Pretty tough decision right? For someone considering a Masters in Economics this should perhaps be an easy exercise. If you look at the allocation of scarce resources and the potential for's a no brainer. Add in that there's far more downward pressure on corvette pricing then upward and it becomes even more difficult to make a major financial outlay...waiting could only help things. School should pay back the investment with dividends. But still....a red z06 would make me REALLY happy now. If i can finance school at 0% and delay payments till after i graduate that would spread the burden out over a later time period. hmm

After all this, my decision is... wait. School's admission deadline isn't for a bit and i can't drive a 'Vette now anyway. So I'll wait and keep watching the prices for another few months. But really, why can't i just do both damnit!!!

Here's a few more Camaro pics!

2008 Camaro Painting

Sunday, January 11, 2009