Episode summary
How Can I Buy a Porsche For Under $30k?
Ask The Compound
· · Hosts: Ben Carlson, Duncan Hill · Guests: Barry Ritholtz
Summary
The episode first tests whether historical S&P 500 return data are still useful even though investors could not actually buy the index in its early decades. The host walks through the evolution from the S&P 90 to the S&P 500, noting that the market structure changed over time, but the long-run returns are remarkably similar: 10.1% annualized from 1926 to 1956, 10.6% from the S&P 500’s launch in 1957 through July 2025, and 11.8% since the first Vanguard index fund in 1976. The conclusion is that the long-term data look credible, even if some early figures are partly reconstructed.
The most animated segment is on buying a used Porsche for under $30,000. Barry Ritholtz says a used Porsche is absolutely possible, especially in models like the Boxster, Cayman, and Panamera, but only if the buyer does homework and gets a pre-purchase inspection. He emphasizes that depreciation is steep early on, that repairs can matter more than sticker price, and that a well-sorted car can be a surprisingly rational hobby purchase.
The episode also argues against using a HELOC to fund a private marijuana company investment, calling it a mismatch between debt and risky illiquid capital. On portfolio construction, the panel says investors can diversify away from the MAG7 with equal-weight, value, international, direct indexing, or tax-efficient exchange strategies. Finally, Barry tells the listener with a underperforming adviser to ask what services are being provided, whether the portfolio matches current goals, and whether fees are justified.
Key takeaways
- Barry Ritholtz says the long-term S&P history is broadly trustworthy: 10.1% annualized from 1926-1956, 10.6% since 1957, and 11.8% since the 1976 Vanguard index fund.
- A used Porsche under $30,000 is feasible, especially a Boxster, Cayman, or Panamera, but only with a careful model-specific inspection and repair budget.
- Barry says borrowing against a HELOC to invest in a private marijuana deal is a bad structure because the investment is illiquid, risky, and likely to lose money.
- The panel says investors overweight the MAG7 can diversify with equal weight, value, small caps, international, direct indexing, or tax-aware exchange funds.
- Barry says an underperforming adviser should be judged on fit, planning value, and fees, not just short-term returns, and the client should ask why the portfolio is built that way.
Notable quotes
“From 1926 to 1956, the S&P compounded at an annual rate of 10.1%”
“So, it's kind of funny that the first index fund, the returns have been great since then, even better than history has showed”
“you could get a used Porsche for 10K, but keep in mind the most expensive car you'll ever buy is a cheap Aston Martin because of the repairs and maintenance”
“I would expect this investment to be a call option that you will will likely expire worthless”
How the episode opens
Welcome back. This is Ask the Compound, the show where you ask and we answer. I'm your host, Ben Carlson.
Let's say you have a portfolio managed by a financial adviser, but you also have a brokerage account, named your Robin Hood account that you personally manage, and that brokerage account is outperforming your financial adviser managed portfolio. Should you flare your advisor? We answer that question and more on today's show.
Please stick around. Our email here is ask the compound showgmail.com. On today's show, we're answering questions straight from you, our compound audience, about historical returns on the S&P 500.
Can we trust them? Is it possible to buy a Porsche for $20,000 or less? That question came straight from a guy named Dun.
I said in the 20s, just Hey, we're going to talk. We're going to litigate it today. How should you think about private investment opportunities in individual companies, maybe from your friends?
How can you diversify beyond the MAG7, maybe to the S&P 493? And how should you judge the performance of your financial adviser? Remember, everyone in the live chat, hit us up.
As always, we'll answer questions live on the spot. All right, today's show is brought to you by our friends at Rocket Money. With prices going up on just about everything lately, dealing with money can be stressful.
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From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- pre-70s s&p data
- buying used cars
- private investment opportunities
- buying the sp 493
- evaluating a financial advisor
Companies and tickers mentioned
- S&P 493
- Ritholtz Wealth Management
Watch the episode
Watch “How Can I Buy a Porsche For Under $30k?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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