Looks like Wall Street Journal is catching on to the paceline

[velomonkey]

Rise of the 5 figure bike: Smooth or SNOB

http://online.wsj.com/articles/rise-of-the-five-figure-bicycle-1408489679

[Elefantino]

Paywall. Grrr.

[fiamme red]

Paywall. Grrr.Try it from here:

https://www.google.com/#q=Rise+of+the+Five-Figure+Bicycle&tbm=nws

[54ny77]

http://forums.roadbikereview.com/general-cycling-discussion/wsj-rise-five-figure-bicycle-330088.html

Last year, Ted Perry dipped into his 401(k) to buy a $20,000 bicycle.

Mr. Perry, of Dublin, Calif., knows it sounds crazy to own a bike worth more than his 2007 Honda Civic. But he has no buyer's remorse about the custom-built two-wheeler he purchased from bike maker Baum of Australia, which captivated him with its superior welding, titanium frame and willowy 15-pound weight.

"I can't afford the nicest car or the nicest house," says the 51-year-old. But he is willing to splurge on the best cycling equipment. "Once you buy it and ride it, it becomes an extension of you, almost," says Mr. Perry, a production manager at a sheet-metal-manufacturing company who bicycles about 150 miles a week.

Prices for elite bicycles are soaring. High-performance materials, such as titanium and carbon fiber, and more advanced components, including electronic gear-shifting systems, drive up costs. The average wholesale price of a bicycle sold at specialty shops, which generate the most dollars in U.S. bike sales, jumped 75% in 2013 from a decade earlier, according to the National Bicycle Dealers Association.

And bicycle enthusiasts, typically wealthier than average and competitive, seem willing to pay for the most advanced bikes available.

Trek, a leading bicycle manufacturer, offers seven stock models priced at more than $11,000. A growing number of small companies make hand-built bicycles, which can be far more expensive than mass-produced ones. Ben Cox, owner of the Newbury Park Bicycle Shop, in Newbury Park, Calif., says he sells five to 10 bikes a week at $10,000 or more. For a handful of his customers, Mr. Cox says, "there is no ceiling."

Avid cyclist Alan Taylor, strategy director for a Sacramento, Calif., marketing company, vowed not to spend more than $3,000 when he went shopping for a mountain bike in the spring. But he wound up paying $5,000 for a carbon-fiber-frame bike that, at 25 pounds, weighed about 5 pounds less than a comparable aluminum model.

"You kind of amortize the price of your bike over miles ridden, and it gets pretty cheap after a while," says Mr. Taylor, who kept his last bike for 12 years. "It's 'smileage,' not mileage, and I am really happy with my bike."

The more widespread use of carbon fiber in bike frames, instead of steel or aluminum, is perhaps the biggest reason for higher bike costs, industry experts say. Used by airlines and the military, carbon fiber is prized for its light weight, durability and vibration-dampening properties. It is also used in bike components such as wheel rims and handlebars.

"You can't say the words 'carbon fiber' without pretty much tripling the price," says Andrew Juskaitis, global senior product marketing manager for Giant Manufacturing Co. 9921.TW +0.82% , of Taiwan.

The brand's top road bike has a $10,300 sticker price, which Mr. Juskaitis acknowledges is "stratospheric." But he says high development costs mean slim profit margins for such top models. An electronic-shifting system, which changes gears at the touch of a button and minimizes chain wear, can be three times as costly as a traditional shift system. And hydraulic disc brakes, which offer more stopping power, can add 15% to a bike's price over traditional clamp brakes. Mr. Juskaitis says Giant expects to sell a few hundred of these high-performance, or "halo," bikes a year.

Research and development are the biggest cost drivers at Toronto-based bicycle manufacturer Cervélo, whose basic bikes cost $2,500 to $10,000.

"When frame designs could be drawn on a piece of paper and built from off-the-shelf tube sets, R&D was a small component of overall cost," says Cervélo co-founder Phil White. "But designing a Cervélo takes a whole team of engineers, from materials specialists and designers to production engineers and aerodynamicists."

Most bicycles are sold at big-box stores like Target and Wal-Mart for less than $100, according to the National Bicycle Dealers Association. At specialty shops, the average road bike, designed for long-distance riding and racing, sell for nearly $1,000, the Bicycle Market Research Institute says.

Last year, 35.6 million Americans rode a bike at least six times. That is down from 57 million people in 1989, according to the National Sporting Goods Association. But more cyclists today are true enthusiasts. The number of people who cycled on a road 26 times or more last year is up slightly in recent years to 21.4 million, says the Sports & Fitness Industry Association.

Some 30% of dedicated cyclists have household incomes of $100,000 or more, the association says. In the overall population, 22% are in that income bracket, according to the U.S. Census Bureau.

Not everyone thinks it is worthwhile spending so much for a bicycle. Dave Moulton, of Summerville, S.C., built and sold bicycles for more than three decades before retiring in the early 1990s. He says high-price carbon-fiber bikes built by major manufacturers exist for "snob value" and so-called "weight weenies" who obsess over superlight cycles. A few ounces make no difference to an amateur, Mr. Moulton says.

John Pryor, an orthopedic surgeon in Seattle, celebrated passing his medical board certification two years ago by buying a $10,000 bike made by custom builder Seven Cycles of Watertown, Mass. Dr. Pryor, 38, bought the bike to compete recreationally in cyclocross, a form of racing on varied-terrain obstacle courses that is surging in popularity. Cyclocross participation is up about 300% since 2005, according to USA Cycling.

"There's a combination of comfort, performance, aesthetic and craftsmanship that I felt I got over a mass-produced bike," Dr. Pryor says. He has since bought a second Seven Cycles bike for $10,000 for long road rides.

Dr. Pryor is hardly alone in doubling up on bicycles. Of Seven Cycles' customers, who spend an average of $7,500 on a bike, 99% already own at least one other bike, company founder Rob Vandermark says.

[Elefantino]

Try it from here:

https://www.google.com/#q=Rise+of+the+Five-Figure+Bicycle&tbm=nws

Thanks! Google = Skynet.

[MattTuck]

Nice shout-outs to Baum and Seven.

As usual, they gloss over the details and pump the $20,000 price tag. What percentage of that total is the frame? and if he had picked Ultegra or Chorus, and aluminum clincher wheels, what would the total cost be?

I do not support taking money out of your 401(k) to buy a bike.

[justinrchan]

Great article - not surprising though. Good to see I am not the only insane one put there but I think $20k is crazy. Guy must be single......

[djg]

Nice shout-outs to Baum and Seven.

As usual, they gloss over the details and pump the $20,000 price tag. What percentage of that total is the frame? and if he had picked Ultegra or Chorus, and aluminum clincher wheels, what would the total cost be?

I do not support taking money out of your 401(k) to buy a bike.

Yeah. As a rule, I reckon we all rank our own priorities and I tend to shy away from saying X dollars is too much for anybody to spend on this or that widget. Once the bills are paid and tomorrow is figured in the mix, it's not for me to say that the price of a new Honda Accord is perfectly reasonable but a cheap beater car and a deluxe bike, for the same net outlay, is somehow less reasonable. But robbing the 401k (and paying the penalty), for some guy who works for a living, seems a little impractical, if not just plain reckless. Somebody on the street with 10 or 20 million or whatever who happens to hate his 401k returns, sure, grab the cash from anyplace you want and I've got no advice to give on any of the particulars. But for most of us . . .

I am a little curious. 3-5 K for a custom or made-to-measure Ti frame is not a comprehensive price range, but it seems to take in the offerings from quite a few builders. Maybe Baum is at the high end of that range (I don't know), maybe my high end is a tad low, and maybe extras can run up the price a bit; 3 grand, full retail for wheels, yep, seen that too; and the high-end Shimano or Campag electronic parts kits are expensive . . . but how do you get a build up over 20K? Not shopping, just wondering. Ticket to Australia for the fitting?

[velomonkey]

What I don't get is - basically any bike over 5 grand you can do better yourself. When it's over 10 grand you can for sure do it better yourself.

I got a Warranty supported C59 with Record and Mavic Cosmic SLR wheels for about 6 grand. A C59 frame alone costs around $4,500 retail.

Cannondale wants 11 grand for their Dura Ace Di2 bike - it's insane. I can build a pinarello F8 with Di2 or EPS and have better wheels for less.

I have my own business; but I've met bankers, biz consultants who spend 11 grand for a bike that I can do way, way, way better for 7 grand. I see these people and I think "well I don't want you handling my money or telling me about my business."

[PaMtbRider]

Just for fun I went on wrenchscience.com and built a Colnago C60. Super Record EPS, Lightweight Millenstein wheels, Enve bar & stem... Yep, msrp of just over $20,000. The wheels actually cost more than the frame.

[shovelhd]

5-10 $10K bikes per week??? Potato are you coming out of retirement for a piece of that?

[jmoore]

Dr Pryor is one of my customers. Super nice guy.

The brown Arione and matching bar tape on the blue Seven in the article were from Ray and I. It's the first image that comes up on my home page.

[velomonkey]

Just for fun I went on wrenchscience.com and built a Colnago C60. Super Record EPS, Lightweight Millenstein wheels, Enve bar & stem... Yep, msrp of just over $20,000. The wheels actually cost more than the frame.

I got a C59 from Maestro - $3,400
Full Record from my LBS - $1,500
SLR wheels w/ Vittoria from my LBS - $1,700
Deda Zero Cockpit - $150

I had the saddle and peddles - throw on bar tape and you're done. Everything was covered under warranty and the wheels for the MP3 program for $1.

Sold the frame for $3,200 two years later - the wheels for $1,200 - the groupset went on a System Six till my firefly was ready and was sold for $1,800 with the deda cockpit (let's say the frame was $700 - and that's generous) - so for 2 years I basically paid just over a grand to ride that bike and then take that money to my firefly (I had $6,200 netted for the next purchase - $4,000 frame, $,1500 for record, $150 for cockpit - saddle and peddles came over - and got fulcrum racing 1s AND Enve 3.4 laced to king huns for $3,000) - total cost $8,600 - $6,200 = $2,400 for an entire new bike with 2 sets of gouchi wheels.

I just don't get how people spend this cash.

[Louis]

I just don't get how people spend this cash.

Sometimes spending the cash is the whole point of the exercise.

[merlinmurph]

An electronic-shifting system, which changes gears at the touch of a button and minimizes chain wear,.....

First time I heard that.....

[Mr. Pink]

I just don't get how people spend this cash.

They're not spending cash. They're using credit, or, in the case mentioned in the article, retirement savings. That's America. 97% of Americans couldn't come up with 5000 cash if they're lives depended on it. Nobody has any money. Why do you think credit scores and the whole credit rating industry is so big? Most Americans are obsessed with that score, something that really didn't exist thirty years ago, and half have zero saved for retirement. Zero. The other half, maybe 50,000, on average.
There is going to be a zillion old people living in poverty pretty soon.

[Elefantino]

First time I heard that.....

It planes better, too.

[merlinmurph]

I just don't get how people spend this cash.

In the grand scheme of things for a lot of people flush with cash, $10-20k for a bike is noise. Picture this: Some guy drives from his 3 million dollar home to the bike shop in his $100k car. He wants to get a bike for when he goes to his 2
million dollar vacation home, where he has a $750k boat among other expensive toys. He's in the process of doing a $250k renovation of the kitchen. You get the point. So, now he wants a bike, and he wants "the best", of course. Do you really think spending $15k on a bike is a big deal? He just knows that carbon is the thing now, listens to the salesperson for awhile, then picks out a bike. He doesn't want to spend any time, he just wants a bike and another $5 or $10k is just noise. Heck, the guy spends $50k/year just to run the boat.

Now, please understand, this isn't my world - not even close. But, I kinda understand it. A friend of mine related something a good friend of his said to him once: "I have more money than time". This wasn't a guy bragging, this was an honest assessment of where he was in life and how he ended up buying a very expensive vacation home. Yes, it can be absolutely mind-boggling how people spend money. But, even spending a relatively modest $5k for a bike is absolutely mind-boggling to 90+% of the general public. :)

But, pulling cash out of your 401(k) for a bike is just plain stupid.

Enjoy your ride,
Murph (who rides a 17-year-old Merlin frame)

[Mr. Pink]

In the grand scheme of things for a lot of people flush with cash, $10-20k for a bike is noise. Picture this: Some guy drives from his 3 million dollar home to the bike shop in his $100k car. He wants to get a bike for when he goes to his 2
million dollar vacation home, where he has a $750k boat among other expensive toys. He's in the process of doing a $250k renovation of the kitchen. You get the point. So, now he wants a bike, and he wants "the best", of course. Do you really think spending $15k on a bike is a big deal? He just knows that carbon is the thing now, listens to the salesperson for awhile, then picks out a bike. He doesn't want to spend any time, he just wants a bike and another $5 or $10k is just noise. Heck, the guy spends $50k/year just to run the boat.

Now, please understand, this isn't my world - not even close. But, I kinda understand it. A friend of mine related something a good friend of his said to him once: "I have more money than time". This wasn't a guy bragging, this was an honest assessment of where he was in life and how he ended up buying a very expensive vacation home. Yes, it can be absolutely mind-boggling how people spend money. But, even spending a relatively modest $5k for a bike is absolutely mind-boggling to 90+% of the general public. :)

But, pulling cash out of your 401(k) for a bike is just plain stupid.

Enjoy your ride,
Murph (who rides a 17-year-old Merlin frame)


First, you're talking about .5% of the world's population. Then you have to consider that maybe, what, 2% of them have a desire to own a very expensive high end road bicycle. Not the kind of market that would support the industry. On the other hand, credit cards and 401k loans and HELOCs, well, there's a market.

[josephr]

First, you're talking about .5% of the world's population. Then you have to consider that maybe, what, 2% of them have a desire to own a very expensive high end road bicycle. Not the kind of market that would support the industry. On the other hand, credit cards and 401k loans and HELOCs, well, there's a market.

my wife threatens to throw me out everytime a small box gets delivered....I'm pretty sure she'd make good on that threat if I took out a loan against the house for any price bike.

[aramis]

Am I the only one who thinks it's funny when people are saying 11k+ is crazy for a bike, I only had to spend 6k?

I'll also be crazy and say I did spend $2500 on one of my road bikes though. :(

The great thing is you can get a freakin awesome bike that's a few years out pretty cheap these days. I went to the bike shop the other day and saw a cannondale super-six evo red for $2600, I think that was a 6k bike retail.

[merlinmurph]

There is going to be a zillion old people living in poverty pretty soon.

I'm with you all the way on this.
The 401(k) generation is approaching retirement and very few people are prepared, especially with having two serious stock market corrections since 2000. In the next 10-20 years, there's going to be a lot of old people needing government assistance. I see it as the next huge issue.

[brockd15]

Am I the only one who thinks it's funny when people are saying 11k+ is crazy for a bike, I only had to spend 6k?

You're not alone. I could "afford" it, I guess, if I really wanted to. With cash, no credit. But there's no way that's ever happening. I wouldn't be able to justify it when you can get so much bike for much, much less money.

Reminds of the thread recently about the Trek super weight weenie bike. When you're talking about $15k+ bikes then $6k starts to sound downright reasonable.

[54ny77]

It is a huge issue indeed.

The math simply does not support sustaining the system. In the next few years the asset liability ratio is supposed to go the wrong way, and a continual depletion of "Trust Fund" assets ("Trust" being somewhat of a pun...) will ensue for the next couple of decades until [bad scenarios].

In other words, the vast majority of boomers won't be shopping for THM Clavicula cranks with carbon fiber chainrings.

I'm with you all the way on this.
The 401(k) generation is approaching retirement and very few people are prepared, especially with having two serious stock market corrections since 2000. In the next 10-20 years, there's going to be a lot of old people needing government assistance. I see it as the next huge issue.

[Mr. Pink]

Am I the only one who thinks it's funny when people are saying 11k+ is crazy for a bike, I only had to spend 6k?



Yeah, I know. I spent 5000 last year on what i considered a reasonable, budget bike (Ultegra steel), but, I tell civilians that, and they go into shock. "For a bicycle??!!"

[zap]

I'm asked by "civilians" every once in a while.…..how much is that, US$1000? ………I just say something like that.

I mean, I just don't want folks to know.

Maybe the WSJ article and the Fox News feature I saw yesterday will shatter that ignorance. I hope not but time will tell.

[velomonkey]

Am I the only one who thinks it's funny when people are saying 11k+ is crazy for a bike, I only had to spend 6k?

I'll also be crazy and say I did spend $2500 on one of my road bikes though. :(

The great thing is you can get a freakin awesome bike that's a few years out pretty cheap these days. I went to the bike shop the other day and saw a cannondale super-six evo red for $2600, I think that was a 6k bike retail.

To you point: no, you are not crazy - and the 6k I spend I knew had 2 very large variables that put the price up to 6k - the frame and the ENVE wheels. I made the decision to purchase a hand-made frame from a builder and company I respected. It was going to be my forever frame - not that there couldn't have been other companies that fit that mold - but meeting the firefly guys, seeing their work and knowing how long ti lasts - I made my choice and it was more than I wanted to spend, but, like I said, it's my forever bike.

The wheels, well, I got a whole thread on how I'm not sure (http://forums.thepaceline.net/showthread.php?t=154114) the money I spend was worth it :bike:

[jlwdm]

I do not support taking money out of your 401(k) to buy a bike.

I support people buying whatever they want and can afford with their money. If you are having to get the money from your 401(k) to buy a $20,000 bike something is wrong.

Jeff

[jlwdm]

What I don't get is - basically any bike over 5 grand you can do better yourself. When it's over 10 grand you can for sure do it better yourself.

...

I have my own business; but I've met bankers, biz consultants who spend 11 grand for a bike that I can do way, way, way better for 7 grand. I see these people and I think "well I don't want you handling my money or telling me about my business."

Maybe you should have them handling your money or giving you advice.

Their time is probably more valuable doing other things then researching bikes.

I run my own business and the way I make a lot of money is increasing my revenue not spending too much time on small expenses. My time is more valuable to me at this time working to bring in more revenue or riding than trying to save a few dollars on a bike.

Jeff

[djg]

In the grand scheme of things for a lot of people flush with cash, $10-20k for a bike is noise. Picture this: Some guy drives from his 3 million dollar home to the bike shop in his $100k car. He wants to get a bike for when he goes to his 2
million dollar vacation home, where he has a $750k boat among other expensive toys. He's in the process of doing a $250k renovation of the kitchen. You get the point. So, now he wants a bike, and he wants "the best", of course. Do you really think spending $15k on a bike is a big deal? He just knows that carbon is the thing now, listens to the salesperson for awhile, then picks out a bike. He doesn't want to spend any time, he just wants a bike and another $5 or $10k is just noise. Heck, the guy spends $50k/year just to run the boat.

Now, please understand, this isn't my world - not even close. But, I kinda understand it. A friend of mine related something a good friend of his said to him once: "I have more money than time". This wasn't a guy bragging, this was an honest assessment of where he was in life and how he ended up buying a very expensive vacation home. Yes, it can be absolutely mind-boggling how people spend money. But, even spending a relatively modest $5k for a bike is absolutely mind-boggling to 90+% of the general public. :)

But, pulling cash out of your 401(k) for a bike is just plain stupid.

Enjoy your ride,
Murph (who rides a 17-year-old Merlin frame)

No, I sorta get it. I mean, certainly I know that many people (middle class, upper middle class, etc.) might regard my own bike purchases as crazy. And as fortunate as I am, I know that there are people who have much, much more money than I do, and that many such people are pressed for time (and might not consider trying to shop for a bargain when buying a bike, or sporting goods generally). It's a small slice of the population, but it's a big population.

So maybe somebody walks into a bike shop and asks for the ne plus ultra, or maybe he or she just asks to see some of the better bikes and one thing leads to another. I knew that many an LBS might tout something north of 10k -- saw a relatively bike savvy cabinet member shop for a 12 or 13k bike in Northern Virginia not too long ago. In truth, I was just ignorant. I figured 13, or maybe 15 for the high end -- just didn't know it one could break 20 on the back of a Ti frame, however nice. But as was pointed out, if there are stock 7 or 8k wheel sets out there, I guess that sorta thing adds up.

May each of us be happy with his or her ride (or at least see something within practical reach).

[Mr. Pink]

I'm kinda blown away that there is still a market for $10,000 bicycles after the recession and the whole home equity line of credit market basically shutting down. I thought that was the source of money that fueled the market ten years ago. And yet large manufacturers are selling bikes off the rack for over ten grand. Furgetabout custom.
I guess I could see it for titanium, because that frame will last a millenium, but, plastic? I just don't know.........

(Heh. Paying for plastic with plastic.)

[velomonkey]

Maybe you should have them handling your money or giving you advice.

Their time is probably more valuable doing other things then researching bikes.

I run my own business and the way I make a lot of money is increasing my revenue not spending too much time on small expenses. My time is more valuable to me at this time working to bring in more revenue or riding than trying to save a few dollars on a bike.

Jeff

Wait, so your time is so valuable you can't take the time to research ways to acquire a high end bike (which, by the way - most knowledge comes from talking to friends on group rides, but let's stay with your example) - however, your time ISN'T so valuable that you can take the time to read a thread about saving money on a large purchase and make a post basically saying "I'd just pay the extra 40% - my time is worth more." Yea, rock solid logic there . . . . . :confused:

Oh, and I have/had my own business too - and never went to biz school, but let me give you a biz school 101 lesson - ANY savings on ANY expense is a direct contribution to the bottom line - otherwise known as PROFIT. So, yea, I don't think I'll have them handle my money or tell me my business.

That was a freebie from one forum member to another . . . it was worth my time :p

[jlwdm]

Wait, so your time is so valuable you can't take the time to research ways to acquire a high end bike (which, by the way - most knowledge comes from talking to friends on group rides, but let's stay with your example) - however, your time ISN'T so valuable that you can take the time to read a thread about saving money on a large purchase and make a post basically saying "I'd just pay the extra 40% - my time is worth more." Yea, rock solid logic there . . . . . :confused:

Oh, and I have/had my own business too - and never went to biz school, but let me give you a biz school 101 lesson - ANY savings on ANY expense is a direct contribution to the bottom line - otherwise known as PROFIT. So, yea, I don't think I'll have them handle my money or tell me my business.

That was a freebie from one forum member to another . . . it was worth my time :p

Had a little surgery this morning and stuck at home with leg elevated. So not working too hard.

As a business owner with one half-time employee my time has too be prioritized and for quite a while the emphasis has been revenue.

Jeff

[Mark McM]

I'm kinda blown away that there is still a market for $10,000 bicycles after the recession and the whole home equity line of credit market basically shutting down. I thought that was the source of money that fueled the market ten years ago. And yet large manufacturers are selling bikes off the rack for over ten grand. Furgetabout custom.
I guess I could see it for titanium, because that frame will last a millenium, but, plastic? I just don't know.........

(Heh. Paying for plastic with plastic.)

$10,000 bikes aren't for the common worker, they're for the economic elite (i.e. the one percenters). If you've been watching the economy, you've seen that while the common workers have been getting poorer, the one percenters are getting richer.

[saab2000]

Last year, Ted Perry dipped into his 401(k) to buy a $20,000 bicycle.



:eek::eek::eek::eek::eek:


:no::no::no::no::no:



How many more emoticons can I find? This is one of the most absurd things I've ever heard of. I'd dip into the 401(k) for about three reasons:

1. I'd starve otherwise
2. A family member would starve
3. To keep a roof over my head. And even then I might just live in a tent until I got back on my feet.

I'd NEVER dip into retirement to buy recreational equipment. The article lost me after this first statement.

[54ny77]

Consider: there are 24 million or so active golfers ('13 data). From that population, there's a subset that is likely multiples of the cycling population who drop $10k on bikes. That subset would probably call the average full tilt Baum purchase a rounding error.

[Mr. Pink]

$10,000 bikes aren't for the common worker, they're for the economic elite (i.e. the one percenters). If you've been watching the economy, you've seen that while the common workers have been getting poorer, the one percenters are getting richer.

Yeah, but, by the very nature of the math, there aren't too many of the 1%ers. And then, very very few of them want to own an expensive road bike. So, They are a tiny market. I'd like a Trek or Cannondale marketing dude to chime in, because they made a decision to break the 10,000 barrier with a little more than faith. They had some research that said, I think, that there is a substantial amount of upper middle class people addicted to debt that really really want that bike, or something like it.

[Dead Man]

I don't think $10k bikes are mostly being bought by 1%s, not by any means. I think they're mostly being bought by Freds who can't really afford them, in a traditional personal economics sense, but prioritize having a nice bike. Credit cards, holding off on motorvehicle upgrade, save up a couple tax returns... whatever it takes to feel switched on, to borrow the phrase.

I can relate with wanting to ride a sweet bike that's well above my pay-grade, and I do. But instead of spending gobs of money, I absolutely scour the globe in search of the best deals on parts, and build on someone else's custom frame. I'm riding a sweet Ti bike with full DA for a 1/th fraction of what I'd spend ordering up a new Lynskey, and it's more bike than I'll probably ever need. It's not a $10k-caliber bike, but it's definitely a $7,500 cal bike. I can do this, because I have the patience and focus to do it. Other guys just like me (tax bracket and expense wise) probably don't have the OCD-esque focus/time/drive to work so hard at spending so little, and just max out the Visa.

[zap]

How much money do people spend on drugs.

In comparison, a $20,000 bicycle might look cheap in the long run.

[malcolm]

People are willing to spend a lot of cash on things they like or things that move them. To the people that don't like those things it always seems crazy.

I wouldn't raid my retirement or kids education fund to buy a bike, but who am I to question how people spend their money? If 20k wrecks your retirement fund hopefully you are just stating out or you were already in a hole.

[Dead Man]

Let's be honest, though... if $20k wrecks your retirement, you were probably screwed to begin with.

If that's the ONLY raid on your retirement you make, and you're otherwise being frugal and investing wisely, it's probably not going to make much of a difference by the time you cash out.

[beeatnik]

What I don't get is - basically any bike over 5 grand you can do better yourself. When it's over 10 grand you can for sure do it better yourself.

I got a Warranty supported C59 with Record and Mavic Cosmic SLR wheels for about 6 grand. A C59 frame alone costs around $4,500 retail.

Cannondale wants 11 grand for their Dura Ace Di2 bike - it's insane. I can build a pinarello F8 with Di2 or EPS and have better wheels for less.

I have my own business; but I've met bankers, biz consultants who spend 11 grand for a bike that I can do way, way, way better for 7 grand. I see these people and I think "well I don't want you handling my money or telling me about my business."

Opportunity costs, Velo, opportunity costs.

IMO, the super wealthy only worry about their positions in interest bearing vehicles (hehe). A bicycle, no matter how expensive, will depreciate (and is discretionary or disposable) so any upfront savings are inconsequential. A $300 steak in a Vegas restaurant which is discounted to $200, is still $200 of wasted capital.

Now, some of the ordinary wealthy are like the rest of us, but they have more money and more lust for material things. I've been posting the pictures below all weekend. Both bike owners are CEOs of small distribution companies in SoCal. Both guys own at least a second high end race bike. Both guys look for bargains. They didn't spend full retail for the Cervelo frames (10 grand) but with opportunity costs factored in they came pretty close. When I told one of these dudes how much my Moots retailed for, a lightbulb went off in his head. I could hear his thoughts. "Wow, that weird titanium bike must be awesome if it costs that much. Maybe I'll get a forth bike for riding the bike path with my kid."

https://farm6.staticflickr.com/5584/14836582468_424fb94ae3_b.jpg

[PaMtbRider]

You need nowhere near the income level of a 1%er to easily afford a $10,000 plus bike. How many of the 1% population are members of this forum? How many paceline members have $10,000 plus wrapped up in bikes. True, I don't see a lot of bikes posted here that retail over $10,000, but, I see a lot of members with multiple bikes that have a combined value that easily surpass that number.

It is all about priorities with your disposable income. Want a nice motorcycle, boat, or sports car? An expensive bike is cheap compared to what you can spend on any of those hobbies.

The guy dipping into his 401k to fund a bike, well that's just stupid. I don't care if it is $20,000 or $2,000.

[beeatnik]

5-10 $10K bikes per week??? Potato are you coming out of retirement for a piece of that?

That has to be a misquote. More than likely 5-10 a month; otherwise, the shop owner is doing tricky accounting. There's more wealth in Santa Monica, Pasadena (well, 1/4 of pasadena), the South Bay and shops in those areas which were managed by friends weren't selling 5 $5000 plus bikes weekly, even at the peak of the housing bubble.

[saab2000]

Let's be honest, though... if $20k wrecks your retirement, you were probably screwed to begin with.

If that's the ONLY raid on your retirement you make, and you're otherwise being frugal and investing wisely, it's probably not going to make much of a difference by the time you cash out.

Hard to say. We of course don't know how old the rider in question is nor do we know how close he is to retirement.

For a 35-year old with $200k in his 401(k) that's probably not a wise move. The compounding effect on $20k over 20-25 years is immense. For a 55-year old with two incomes and no mortgage and $1.5m in his 401(k) it's probably not such a big deal.

If I really wanted a $20k bike and couldn't afford it I'd rather take a 3-year loan than take money out of a 401(k). Anyway....... Enough lecturing. I didn't get religion on this until I was a bit older either. :D :eek:

Still, I can't see it being wise. My recreational equipment is, and always has been, play money - after all the other stuff is paid for. Everyone has to make their own choices.

[Mr. Pink]

Hard to say. We of course don't know how old the rider in question is nor do we know how close he is to retirement.

For a 35-year old with $200k in his 401(k) that's probably not a wise move. The compounding effect on $20k over 20-25 years is immense. For a 55-year old with two incomes and no mortgage and $1.5m in his 401(k) it's probably not such a big deal.

If I really wanted a $20k bike and couldn't afford it I'd rather take a 3-year loan than take money out of a 401(k). Anyway....... Enough lecturing. I didn't get religion on this until I was a bit older either. :D :eek:

Still, I can't see it being wise. My recreational equipment is, and always has been, play money - after all the other stuff is paid for. Everyone has to make their own choices.

Yeah, basically, if you're 45 and have saved little, that 20 grand could mean 100000 plus by the time you're 65. But if you're in your early sixties, saved a lot, no real debt, and still a good income, no real whoop. Unfortunately, there's way more of the former, and hardly any of the latter.

Money is cheap these days. It makes more sense to borrow at 3-4% than spend that cash. That's how I just bought my car. I'm ahead of the game with a bull market.

[dogdriver]

He still needs an engine. My prediction is that the dirtbag on the Trek 1200 will still crush him...