RPF0493-Should_I_Sell_My_Harley
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00:00:15.000 | Welcome to Radical Personal Finance,
00:00:17.000 | the show dedicated to providing you with the knowledge,
00:00:19.000 | skills, insight, and encouragement you need
00:00:21.000 | to live a rich and meaningful life now,
00:00:23.000 | and fun life,
00:00:25.000 | while building a plan for financial freedom
00:00:27.000 | in 10 years or less.
00:00:28.000 | Today, Fun Friday question.
00:00:30.000 | Question comes in from Chris.
00:00:32.000 | Very interesting.
00:00:33.000 | Says, "Joshua, looking to see if you have any insight
00:00:36.000 | on emotional or psychological decisions
00:00:38.000 | versus logical decisions when it comes to finance.
00:00:41.000 | Backstory.
00:00:42.000 | I have a paid-for 20-year-old Harley-Davidson motorcycle.
00:00:47.000 | I have not ridden it in three years.
00:00:49.000 | I spend about $200 per year on an insurance policy.
00:00:53.000 | Each spring, I do maintenance on it,
00:00:55.000 | which costs about $30,
00:00:57.000 | and living in Minnesota,
00:00:58.000 | we only really have six months or so
00:01:00.000 | of decent riding weather.
00:01:02.000 | I have a big garage, so storage is not an issue,
00:01:05.000 | apart from each winter when I have to move it around
00:01:07.000 | in the garage and I tell myself I'll sell it in the spring.
00:01:11.000 | I can make the logical argument to myself
00:01:13.000 | that I need to sell this.
00:01:14.000 | It is a depreciating asset,
00:01:16.000 | costs money to maintain and insure,
00:01:19.000 | and it really brings no value to my life.
00:01:21.000 | However, I cannot bring myself to sell it.
00:01:24.000 | I have no pressing financial obligations,
00:01:26.000 | so the $5,000 or $6,000 that I would get from selling it
00:01:29.000 | would really not do much to improve my life.
00:01:32.000 | About the only thing that I would do with the money
00:01:34.000 | is put it in a taxable brokerage account.
00:01:36.000 | I've told myself I'm going to sell this bike for years now,
00:01:39.000 | but I still can't figure out why I still have it.
00:01:42.000 | Any insight would be helpful,
00:01:43.000 | and as always, thanks for the great show.
00:01:45.000 | Chris in Minnesota.
00:01:47.000 | Well, Chris, kind of a fun question,
00:01:49.000 | and obviously in light of your current financial situation,
00:01:53.000 | thankfully not a super important question,
00:01:56.000 | just one of these musings,
00:01:58.000 | and clearly you have mused on this for a couple of years,
00:02:02.000 | and what I was most impressed by,
00:02:04.000 | the reason I wanted to answer this on the show,
00:02:06.000 | was your clear thinking that you applied to it,
00:02:10.000 | and so I'll just share with you my suggestions and commentary.
00:02:14.000 | First thing, I am glad to hear
00:02:16.000 | that you are assessing the value of the item
00:02:19.000 | and trying to understand its value in your life.
00:02:23.000 | In general, I think most of us are prone to inertia,
00:02:27.000 | just simply continuing to do what we've done,
00:02:29.000 | and in this case, you have a Harley that you've had for a long time,
00:02:32.000 | and well, why get rid of it if you've had it for a long time?
00:02:36.000 | But you do point out that there are some problems,
00:02:39.000 | although minor, financially otherwise,
00:02:41.000 | with maintaining it and keeping it going.
00:02:43.000 | I mean, if you don't go out there and start the thing
00:02:46.000 | at least every month or a couple of months,
00:02:48.000 | you wind up with the carburetor all messed up,
00:02:51.000 | and the thing will run.
00:02:52.000 | I mean, it's a 20-year-old Harley,
00:02:53.000 | so right there, you're not going to get a very smooth start anyway.
00:02:57.000 | So you wind up cleaning the carburetor,
00:02:59.000 | and you have to keep the battery maintainer on it,
00:03:02.000 | and you're replacing batteries
00:03:03.000 | and all of your spring maintenance, as you said,
00:03:06.000 | and then your insurance policies.
00:03:07.000 | So there are some costs to it,
00:03:08.000 | and then of course you can calculate the--
00:03:10.000 | and as you should, you've calculated the depreciation cost.
00:03:14.000 | Now my guess is for a Harley of this age,
00:03:18.000 | it's pretty much done depreciating.
00:03:20.000 | I don't--I'm not that in tune with the Harley-Davidson marketplace,
00:03:23.000 | but it's hard for me to think that it's going to go down
00:03:27.000 | much more in value than $5,000 or $6,000.
00:03:30.000 | So you probably have almost no depreciation
00:03:33.000 | at this point in time as long as it is maintained.
00:03:36.000 | So your really costs are your maintenance costs
00:03:39.000 | and your insurance costs.
00:03:42.000 | One thing I would look into in this case was
00:03:44.000 | can you just drop the insurance.
00:03:46.000 | In the state of Florida, there is no requirement
00:03:48.000 | that you have to have insurance for a motorcycle.
00:03:51.000 | Of course, it's a good idea, but unlike with cars,
00:03:55.000 | there's no legal requirement that you have to maintain insurance.
00:03:59.000 | I guess the state authorities figured that if you get in a crash on a motorcycle,
00:04:02.000 | probably the damage to the car is going to be a whole lot less
00:04:05.000 | than the damage to your bike.
00:04:07.000 | So it's not required that you maintain insurance.
00:04:09.000 | That could be one way of trimming your expenses.
00:04:14.000 | And, of course, you have the cost of the maintenance on it.
00:04:18.000 | Here's how I would assess it.
00:04:21.000 | I wouldn't discount the psychological value of things.
00:04:25.000 | I think we all have things that we like,
00:04:28.000 | and we just keep them around because we like them.
00:04:30.000 | Maybe you had many great rides on this Harley
00:04:33.000 | and you've really just enjoyed owning it.
00:04:35.000 | I have a friend of mine who has the same thing,
00:04:38.000 | has a classic Harley.
00:04:40.000 | It's 1993, so over 20 years old.
00:04:43.000 | He has owned it since it was brand new, put all the miles on it,
00:04:48.000 | and he just likes to have it.
00:04:50.000 | A similar thing, except he doesn't do the maintenance on it,
00:04:53.000 | and so every year he takes it into the Harley shop
00:04:55.000 | to have the carburetor cleared up and all that,
00:04:57.000 | so it does cost him more money.
00:04:59.000 | But I don't think there's a problem of keeping stuff around.
00:05:02.000 | In terms of selling it, I think you identified some of the reasons
00:05:06.000 | why it's not pressing.
00:05:08.000 | As you say, I have no pressing financial obligation.
00:05:10.000 | To me, the idea of selling my $5,000 or $6,000 toy
00:05:14.000 | that I've enjoyed over the years
00:05:17.000 | to just put the money in a brokerage account
00:05:20.000 | sounds very logical and utterly boring.
00:05:24.000 | So I can understand why you wouldn't do it.
00:05:27.000 | If you don't have a pressing goal and you're not pressing
00:05:30.000 | where this $5,000 or $6,000 is going to make a big deal,
00:05:33.000 | it's a lot more fun to look at the Harley in the garage
00:05:36.000 | than to see an extra $5,000 of value for most people
00:05:41.000 | on a probably substantial brokerage account.
00:05:44.000 | Now, if you have no investment assets,
00:05:46.000 | this could set you on the path to investing.
00:05:49.000 | So here are a few ideas. Here is what I would do.
00:05:52.000 | Number one, I would not discount the psychological value,
00:05:55.000 | but I would consider it.
00:05:57.000 | There comes a time in most of our lives
00:05:59.000 | where it's time for us to let things go,
00:06:01.000 | and if you're ready to do that, let it go.
00:06:04.000 | But I wouldn't discount the psychological value.
00:06:07.000 | None of us make all logical decisions.
00:06:11.000 | It might be a fun economic concept
00:06:14.000 | and somewhat useful to think about the rational person.
00:06:17.000 | What would a rational person do?
00:06:19.000 | But the reality is we're not really all rational.
00:06:22.000 | We're very emotional.
00:06:24.000 | Even the concept of rationality presupposes
00:06:27.000 | an external objective standard for rationality.
00:06:31.000 | Interesting philosophical argument there.
00:06:33.000 | We'll skip it for now.
00:06:35.000 | But in the context of your own rationality,
00:06:37.000 | it would be determined based upon what do you value.
00:06:40.000 | Some people would say,
00:06:41.000 | "I value having money and productive investments."
00:06:44.000 | Well, it's rational in that context
00:06:46.000 | to sell the Harley and toss the money in a brokerage account.
00:06:49.000 | Some people, however, would say,
00:06:51.000 | "I value living a rich life now,
00:06:53.000 | and for me, knees in the breeze is my only disease,
00:06:56.000 | and my Harley Davidson is my two-wheeled psychologist."
00:06:59.000 | I left some helmet stickers there for you.
00:07:02.000 | And indeed, to me, that is utterly rational.
00:07:05.000 | It's perfectly rational to keep something around
00:07:08.000 | because you enjoy it.
00:07:10.000 | So don't discount the emotional value of something.
00:07:14.000 | Now, there's a reason you haven't ridden in three years.
00:07:16.000 | Maybe motorcycles just aren't your thing anymore.
00:07:19.000 | That's fine.
00:07:21.000 | Which brings me to thing number two that I would do.
00:07:23.000 | I would think carefully about the utility of the motorcycle.
00:07:29.000 | Is there a reason to keep it from an argument of utility?
00:07:34.000 | For example, I think there is a tremendous amount of value
00:07:39.000 | of keeping around something like a backup form of transportation.
00:07:44.000 | If you have a car, but you also have a motorcycle as your backup,
00:07:48.000 | then perhaps that'll save you some money on renting a car to get to work
00:07:52.000 | when you need to go and put your car in the shop or if you have an accident.
00:07:57.000 | If your total annual cost is $200 a year to maintain it,
00:08:02.000 | but you take your car to the shop for a few days,
00:08:04.000 | it wouldn't be hard to meet $200 per year of expenses.
00:08:10.000 | I think it's also really nice to have something like a motorcycle around.
00:08:15.000 | A motorcycle can be--although I'm sure a 20-year-old Harley is not--
00:08:19.000 | a motorcycle can be something that's more fuel efficient.
00:08:21.000 | If you need to take a fuel-efficient trip somewhere, that can be good.
00:08:24.000 | Or who knows? Maybe the zombie apocalypse is going to happen.
00:08:29.000 | North Korea fires off their nuke.
00:08:31.000 | Everyone hits the road, and there's massive traffic jams,
00:08:34.000 | and a motorcycle allows you to buzz along on the outside.
00:08:37.000 | So there you've got a zombie apocalypse vehicle in place for yourself.
00:08:43.000 | I don't know. There are a lot of reasons.
00:08:45.000 | For me, if I had the storage space, I would find it valuable to have backup vehicles.
00:08:50.000 | And vehicles of different profiles.
00:08:53.000 | So consider if there's other utility for it that you're not thinking of.
00:08:57.000 | Number three, I would look for something--if you're worried about this emotional connection--
00:09:02.000 | I would look for some kind of fun, other positive emotional connection to swap it out with.
00:09:10.000 | So I wouldn't just toss it into a boring brokerage account.
00:09:13.000 | Think of something fun to do with the money.
00:09:16.000 | Maybe you want to spend it.
00:09:18.000 | And so tell your wife, "Hey, honey, listen, I'm selling the Harley.
00:09:21.000 | Let's go do something fun.
00:09:23.000 | Something that both of you have enjoyed doing, and turn the Harley into an experience.
00:09:27.000 | You've traded out the hassle of a thing.
00:09:29.000 | You've traded out the hassle of storing it and maintaining it.
00:09:32.000 | It had a lot of fun experiences for you, but you can send it out in style
00:09:36.000 | by taking the money and selling it for an experience."
00:09:41.000 | I think that's worth it.
00:09:42.000 | A lot more fun than just throwing it in a brokerage account.
00:09:45.000 | Or if you have not told yourself no on any experiences that you really want,
00:09:51.000 | then go and find some kind of fun investment that would give you psychological value.
00:09:56.000 | Maybe you want to go ahead and use this as a down payment on a speculative piece of property
00:10:03.000 | that you've thought about buying.
00:10:05.000 | Or maybe there is a brand-new cryptocurrency that you've been eyeing,
00:10:11.000 | and you think, "Well, this is wild speculation, but you know what?
00:10:14.000 | Let me turn the Harley into something fun here."
00:10:18.000 | Maybe you've been eyeing that Barrett .50 cal, and you can't justify it.
00:10:23.000 | There's no reason for it, but you'd sure rather have one of those than a Harley.
00:10:28.000 | You figure, "Well, if I buy the Barrett .50 cal down at the local gun shop,
00:10:32.000 | it's going to cost me 6,000, 7,000 bucks, but maybe it will maintain its value over time,
00:10:37.000 | and, hey, it would be fun to go out and shoot with my buddies every now and then."
00:10:41.000 | I don't know. You pick whatever you're into.
00:10:43.000 | But come up with something that's emotionally fun and stimulating.
00:10:46.000 | And then instead of it being kind of a boring thing of, "Oh, I've got to get rid of this Harley
00:10:51.000 | and toss it into a brokerage account," you have something fun to think about, something interesting.
00:10:56.000 | And then my final suggestion for you is don't discount just swapping out the experiences that you got with the Harley
00:11:03.000 | and swapping it out for something that would give you experiences,
00:11:07.000 | but that's more appropriate for where you are right now.
00:11:09.000 | And here I would encourage you, yes, consider selling it and you could put it on the market,
00:11:14.000 | but be open to doing a trade.
00:11:15.000 | Sometimes with something like this, you'll come out better in the end if you'll trade it.
00:11:21.000 | Take some time and find somebody who would like to have a Harley and trade the Harley for their bass boat.
00:11:29.000 | Do you have bass in Minnesota?
00:11:31.000 | For their fishing boat.
00:11:32.000 | Or trade the Harley for a side-by-side, a UTV.
00:11:36.000 | And maybe you would get more use out of the side-by-side UTV or a snow machine or something like that,
00:11:42.000 | and you can use it during the winter months.
00:11:46.000 | Maybe that would be more fun for you.
00:11:47.000 | Trade it for a boat.
00:11:48.000 | Trade it for a dual sport.
00:11:50.000 | If the reason you don't ride the Harley anymore, you enjoyed riding motorcycles,
00:11:54.000 | but you don't really love just being out on the road and you can't ride it six months,
00:11:58.000 | get yourself a dual sport or something and try to do a trade for it.
00:12:04.000 | Perhaps you'll find something that would be more interesting.
00:12:07.000 | So that's my answer.
00:12:08.000 | I don't know which of these ideas would stick, but I'm not real excited about this idea.
00:12:13.000 | I have no pressing financial obligations, so the $5,000 to $6,000 that I would get from selling it
00:12:18.000 | would really not do much to improve my life.
00:12:20.000 | That sounds boring, boring, boring to me.
00:12:23.000 | I'm going to put it in a taxable brokerage account.
00:12:25.000 | Find something with some juice and trade out the emotion that you have in the Harley for something else fun.
00:12:33.000 | And, hey, Chris, if you can't think of anything else to do with it, toss it on a –
00:12:38.000 | call up a local shipper and send it to me.
00:12:40.000 | I'll ride the pants off of it.
00:12:42.000 | This show is part of the Radical Life Media network of podcasts and resources.
00:12:51.000 | Find out more at RadicalLifeMedia.com.
00:12:55.000 | Struggling with your electric bill?
00:12:57.000 | Get an energy assist from SDG&E and SAFE.
00:13:01.000 | You may qualify for an 18% discount.
00:13:04.000 | Visit SDG&E.com/FERA to find out more.