Tuesday, November 09, 2004

Swimming against the Tide

I am spending time watching the local scene for real estate and cars and stuff like that, and I want to make the comment that Israelis love something new, they want something that is shiny and nice, and clean and new, and once it is old it is gone from favor.

For example, some of the new Olim's in the Ulpans were discussing the cars that they are buying, which were Mazda MPV's, not cheap in my book and not cheap in an Israelis book. I think that even with the new Olim discount that they are getting they are still spending $38k on them. To put this in NIS terms these low end Minivans are running 216,000 NIS. Another way to look at this is that for 700,000 NIS it is possible to buy a livable apartment in this country. So for the price of 3-4 cars you can buy a livable house.

We took the opposite tack. We bought 2 cars for 21,000 NIS combined. We just see cars as things that go down in value and even if we only get 1-2 years of life out of them we can afford to replace them. The carry cost of a 200 NIS van is 12-15,000 NIS per year in interest cost that alone will pay for a cheap car. Not to mention we have two cars which is seen as quite a luxury in this country.

Looking at apartments or houses, we went for the lowest end space on the nicest block for our needs. This saved some money, but we figured location is more important then size or features. Living in a large Ivory Tower in a country full of parks, kids, synagogues and cafe's gives you a lower standard of living then living in a smaller place that lets you get out and enjoy the town. Not to mention that the savings is enough to pay for at least 10-12 dates a month, baby sitter included.

It is so easy to try to keep up with the Jones in this country, and frankly the Jones have it very good. They are driving cars that cost $60k in the US, and here have to cost 600,000 NIS. A sum that is 7 years salary for the average Israeli, who by the way drives nicer cars then me.

If you want to come and stay, figure out how to live on a budget and that involves maybe going for something old and blue over something new and shiny.



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