Buying cars in yo 20's
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yeah feel free to delete my shit. It's not really important lol - I probably coulda just said "be careful about buying cars when you are just starting out because that sort of thing can set you back a ways, in real terms"
sorry
Well I sir would first like to thank you for contributing to this conversation. You said what most don't even understand. There is a difference between being "rich" and wealthy. You need to set goals and have a path to get there. I think many members here are exactly as you described. Which is sad. Hopefully the OP will now rethink about buying a 156k mile e46 m3.
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Alright moved to new thread, didn't realize this tangent had its own zip code!
Good points being made here, building off Jordan's mega post Warran Buffet has lived in the same house since he started Berkshire Hathaway and has driven Caddilac DTS's or similar not crazy luxury sedans. His 2015 net worth is $72.3 billion.
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Pay off the house, invest stocks (any railroad or bigger trucking company are great investmants) and then buy your dream cars. There will always be car deals.
This.
With all this supposed disposable income now - make good choices with it... Because the chances of it staying that way are slim. Some wise financial planning now will yield dividends for the rest of your life allowing you to do whatever you like once you're older.
Take it from someone who should have done that - and is looking back on it now wishing I would have listened.
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it's all good Jake.
Please note that when I say "you" as follows, it pertains to generically speaking anyone. It isn't directed at any individual.
Great post with some wisdom behind it. It's always nice to see how someone else's brain works.
I left out a "small" part to my equation earlier. I started my own business before buying my car, while going to school and working part-time. I spent my nights developing, programming and designing until the sun came up. Took a nap and went to class every morning. A few months after launch, the money started flowing in. I'd wake up to dollar signs and my phone would be going off with orders throughout the day. After about a year, I couldn't keep up anymore and decided to freeze operations until I secured my degree. I didn't want to hire anyone.
I've never been passionate about school, but figured I'd get my degree after spending years at school. I'm an entrepreneur at heart and you don't know freedom until you don't need to work 9-5 every day. Plus, I made 20x more than what I got paid to "work" for my employer. It's nice being able to go out and spend as much money as you want and know it won't matter. I should have invested more of it, but was living in the moment. Oh well, next time. Go ahead and interpret this as "cocky", but if you're reading this, you can do it too. I follow a lot of informational and influential entrepreneur/lavish lifestyle blogs. The best time to start your own business is in your 20's and the internet offers unlimited, free resources. I'm a firm believer than anyone with the mindset can do it. E-commerce is fantastic! You have the ability to sell anything to anyone in the world. You're not limited to a brick-and-mortar and overhead can be almost non-existent. I'm working full-time now just so I can become my own boss later.
I_love_cars: not everyone has the same mindset. While we seem to view being "successful" as having enough time and money to do whatever we please (maybe I'm wrong), others don't feel the same way. Some people like a stable routine in a field that is much harder, or impossible to do as an entrepreneur.
There will always be someone with more money than you, more time than you, and who is even better at what you do. You need to be happy with yourself at the end of the day, whatever that means. I'm only 23, so maybe I don't know what I'm talking about. Oh well.
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There will always be someone with more money than you, more time than you, and who is even better at what you do. You need to be happy with yourself at the end of the day, whatever that means. I'm only 23, so maybe I don't know what I'm talking about. Oh well.
Beyond anything else, this is really all that matters.
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I_love_cars: not everyone has the same mindset. While we seem to view being "successful" as having enough time and money to do whatever we please (maybe I'm wrong), others don't feel the same way. Some people like a stable routine in a field that is much harder, or impossible to do as an entrepreneur.
There will always be someone with more money than you, more time than you, and who is even better at what you do. You need to be happy with yourself at the end of the day, whatever that means. I'm only 23, so maybe I don't know what I'm talking about. Oh well.
EDIT: Proud'a'yu
Well, to be clear, time and money to do as we please is more of just a result of the efforts, it isn't the driving goal behind it. The goal is still freedom to do things on your own terms. That may not mean having a ton of money. I know guys who make 50k a year on their own but the do it not having to answer to some stupid corporation. They're pretty happy.
I personally am after security for my family and friends. I've had too many people in my life get fucked over by stock markets and/or piss poor planning. These are people I care about, I don't blame them because most people are just conditioned at an early age to behave a certain way and it has consequences. I've been at this investment firm for the past 4 years. We have the highest per capita profit in the industry, bar none. But that comes at the cost of making other people lose. The stock market is never something that I have really believed in because by its very definition, the only way to win is for someone else to lose. I don't like that model.
I prefer rental properties because I control it, I control where it is, I control how well it's kept and how good my tenants are. I am able to provide affordable rent rates lower than most in the market right now because I'm not greedy and would rather see people have some options. Everyone needs a place to live, and I like being able to do what I can to help people with that.
The goal is to ensure that no matter what happens, my family and friends are taken care of. Honestly I will always be into software and "work" that way in some capacity because I love that stuff. It's a passion, but I never ever want to say past the age of 40 that I'm beholden to that. To me, land is a strong bet. Markets were created by man and have gaping holes that screw people over. Land has stayed consistent for thousands upon thousands of years. In Rome, you needed land to vote. Land has always been a bartering tool. People always need a place to live. There is really no way that housing can fail you as long as you are insured for catastrophe and also manage your cash flow effectively.
I'm not in the ball park of ever getting millions of dollars this way. But I will damn sure not have to subject my family to me being unemployed and wondering WTF to do when I'm 55 or 60. That's my goal.
2011 E92 M3 6MT ZCP - ESS 625 supercharged
2007 Z4MR
2003 E39 M5
2002 E46 M3
2021 X5 40i -
This thread 10/10 would read again.
It's pretty interesting stuff
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A whole lot to cover in one post! I believe the most important point you made, is do something that makes you happy.
My back up plan, just so happens to be the job I'm currently at. Rowley Tool Corp. My great grandfather started this place in 1945, and then my grandpa, and currently my second cousin's own it.
The reason I chose this path, is for 1, it make me HAPPY! I absolutely love building stuff every day, I love my hours, and I love working 40 hours a week. I know exactly what time I work next year feb 2nd(random date) but I have no clue what I will be doing. I know where, I know when, but its always different(its like the job was made for me!).
Another reason I choose it, is because I don't have to put my goals on pause(Starting my own business, of course), yet I will end up with a back up plan if my businesses ever goes down hill. I will be able to get a job anywhere with a Tool and Die journeyman's card. No, this is definitely not the end goal.
lastly, my boss just so happens to be 65. His brother(the other boss) is roughly the same age. I would have to say, that this place is one fantastic place to work if you are doing tool and die, I couldn't imagine a better shop work environment. I believe I will have what it takes to steer this place in the right direction when the time comes, and that just might be my destiny.
But if not, If the time comes when the shop will be shut down, My house will be paid off(But more importantly my shop will be done) I will have a back up business hopefully in full swing, and I will have a backup career if those business's go down. I'm currently doing what I can to invest in my own business.
Would you believe thats the best place to put my money during this age?
I almost forgot we were talking about buying a car.
sk8 or die
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But I gotta wonder why you think buying a house was a bad idea.
I have a 5 year contract for my apprentice, so I knew I needed to stay local for at least 5 years, and I needed a place to live no matter what, and more importantly I needed a place TO WORK ON MY CARS.
The house is tiny, it will be paid off before the 5 years are over, and the biggest reason I bought it is that it comes with a 24x36 shop. Which happens to be larger than the house haha.
And its cheaper than paying rent if I need it to be! Not to mention paying rent is like pissing money out the window.
sk8 or die
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It's fine if you'll live there for 30 years. As far as an investment goes, don't houses "appreciate" at like .8% a year or something...? Not only that houses don't appreciate like they use to. Sure, you build equity; and your mortgage may be cheaper than renting a similar dwelling. But you have taxes/repair/etc. how long does it take for your payment to actually affect the principal rather than just paying off the interest? How about home owners insurance? It's like renting. From a bank.
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The reason some people think owning a house is bad, is because of the money you are spending on the house (mostly in interest) that could be going to other investments. A huge portion of my income goes to the house, interest, mortgage, upkeep, taxes, etc. I could be using that money to build wealth.....much more than my house will be worth when it is all free and clear (yet I still pay taxes and upkeep).
The argument, is that I want a nice house, it makes me happy, it's great for my family, and I get to have a place to keep all my fun stuff at.
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Different strokes for different folks. It's nice being able to leave after a year if I want with no strings. But then again I don't get the benefits of doing whatever the hell I want to it.
If I had a family my views would be different for sure, as Robert mentioned above
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Different strokes for different folks. It's nice being able to leave after a year if I want with no strings. But then again I don't get the benefits of doing whatever the hell I want to it. If I had a family my views would be different for sure, as Robert mentioned above
You sound like you're single.
I have 1000$ a year on taxes, 600$ a year on insurance(IT actually cut my car insurance in half, which saved me much more than 600$ a year) and about 1300$ a year on interest, but thats only going to be for the first 5 year( of course this number gets lower as I pay in).
What I'm getting at. I can't see renting a place being much cheaper. And since my father and uncle are contractors, I'm not worried about fixing it. Very minimal fixes will be needed. As you can see, taxes and interest aren't much at all.
at worst, if no one buys it for near what I paid, I can rent it out. Or not? Oh well. Its only a 32k house! always need equity.
sk8 or die
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I'm Not single.
I just try to be smart with my money before committing 30years of my life to something I most likely won't get my money out of. Equity can be made elsewhere if need be.
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This is a big reason why I chose to purchase a duplex instead of a single family home. I rent the upper to people I know and I live in the lower. Half the mortgage is paid for me, all major renovations and appliances were done/replaced by previous owner, I get to do whatever the crap I want (just like owning a single family home as you guys previously mentioned) and at the end of the day, could just as easily rent the whole thing out and put money in my pocket.
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I'm Not single.
I just try to be smart with my money before committing 30years of my life to something I most likely won't get my money out of. Equity can be made elsewhere if need be.
Congrats! When's the wedding?
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Congrats! When's the wedding?
Whenever earls car is done
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The way that a mortgage amortizes makes homes in your early 20's a bad investment vehicle. The first 10 years of a 30 yr mortgage are going to be almost entirely interest. Your only equity at that point is in upgrades or market appreciation. In raw dollars, a house usually is worth 80%-100% more than when you bought it if you pay it off at term of 30 years. However, you have also paid nearly double your original purchase price in interest, plus repairs, potentially PMI, potentially HOA, and HOI. So in reality you aren't really coming out ahead. All you're doing is at best breaking even unless you're in a housing bubble, but you can't plan for that or bank on it. That's just stupid. If you turn around and say "well I am paying extra on principal every month", ok great, except for the fact that the money is doing utterly nothing for you right now because you won't see any of that money come back until you sell the house (maybe) X number of years down the road. You aren't doing yourself any favors. Time/value of money says that's a bad idea when you're starting out. Especially on a secured piece of debt like a house. If you meet LTV ratios you can potentially take a line of credit out, but only if you put 20% down and then after that over the course of let's say 3 years if you are paying down principal, you are freeing up what? A few thousand bucks? Big deal that won't be you much at all if you are taking out a HELOC.
also, most of the money you sink into a house is money you won't ever see back. Furnace, A/C, water heater, roof, windows, landscaping, driveway/walkway/stoop repair, or foundation (god help you at that point), are tens of thousands of dollars that contribute absolutely nothing to increasing the value of a home in the real marketplace. The majority of buyers don't give a shit about anything other than floor plans + whatever the current trend is in kitchens and bathrooms. Those are your biggest money makers.
If you get a house for let's say 32k like Rowley, there's really no harm in that because you can realistically pay it off very quickly. But you aren't going to get much house for 32k and certainly not as much resale value if it's that small (as noted smaller than 24x36) in the starter home market. But you also can't say it's cheaper than renting because right now in real terms it may be, however, any time you own a house you are taking a risk on what will break and it could be something significant. If you start having water problems in a basement before 5 years is up and you want to sell it? Have fun. You're either fixing it or sitting on it for a long time, or you're selling it for next to nothing because buyers will beat your ass up on the price.
But if you're renting? You have 0 liability for stuff like that. All you need to do is not be a shitfuck and don't destroy the place you live at.
It's about risk mitigation - if you are trying to achieve something that requires X number of dollars like start a particular business that has particular overhead costs or whatever, your best bet is to mitigate your risk of out-of-pocket expenses as much as possible.
I started out with duplex with my wife and daughter, we lived there for 2 years. Then I bought a rehabber, lived in my in-laws' basement for 6 months while I went to my day job and then worked 6 days a week till 11 p.m. every night redoing 4 bathrooms, 2 kitchens, 1500 sq ft of hardwood floors, the list goes on. Then I moved in there for 2 years and it cost me 400 bucks a month to live there. I was able to sell that place for a significant profit. That place paid for the down payment on my business partner's single family home for himself, it paid for my absurd 15k engine build on my Acura TL, and eventually helped me get into the house i'm in now. Meanwhile I was looking for other duplexes. I found a place near Mt. Mary college that my partner and I bought. Looking hard at cost per unit - it was about 60k per unit for that duplex, and market rent is 750-800/mo per unit. 1 unit rented literally pays for everything at that point. The rest is just profit that all gets either repair escrow or goes to paying down the principal.
all of these things have something in common which is mitigating cost by being patient for proper deals and understanding neighborhoods, cap rates, likely scenarios, etc. , and mitigating risk by never taking anything for ourselves. In 8 years all my cash flow from property has gone into principal or escrow for repairs.
I pay my mortgage on my house that I live in now out of pocket because I have a wife and 2 young kids and we lived light for years and I shuffled them around and moved them from one place to the next 6 or 7 times probably in the past 7 years. Eventually there is an intangible benefit when you have a family to just stabilizing some things for them first, and then re-focusing on investments. But I still can't help but see myself as throwing money away at interest and risk of repairs here which will eat into my investing power. To me, I can't see it any other way - I hate the fact that I pay for my house out of my pocket and can't use other people's money to do that. i.e. profit from investments. But I made the decision to have a family and not sacrifice everything for the sake of just money. I acknowledge this and I never would criticize someone for going the route I did but I also will advise any early 20-something to be serious about what they want out of life and figure out how to get there, understand the roadblocks/events that can happen to slow that down, and understand what you are willing to live with and be happy with.
For me, it all comes back to the OPM formula. Renting to people to have them pay your taxes, mortgages, interest, and repairs is a form of OPM , and the money to get the property they rent in the first place is from a bank of course which is OPM but again with cash flow from tenants, I'm insulated. So when I say buying a house in your 20's that you aren't using to either A) flip short term and can make actual money on, or
rent out , is a bad idea, that's what I'm getting at. If you have 0 aspirations to do more with your life, fine do whatever you want and buy your house. If you have some amount of aspirations but obligations like family get in the way, then balance it at least and buy a cheaper starter home in a stable area. Exit strategy is everything. I never buy anything without an exit strategy. It either needs to be cheap enough under market value that I can sell it for what I paid for it even with my back against a wall or with minimal loss, or cash flow like a mofo so nobody can beat me up bad enough on price because I can always justify the cap rate, or it has to be in a neighborhood that has 1 in a million chance of going downhill (like the neighborhood I currently live in). Thirdly, if you have nothing but aspirations and 0 ties to anyone like kids or a wife, then don't a screwup - mitigate as much as you can.Why? Time/value of money says so, that's why. Your time is cheap in your 20's, so every dollar you can push for yourself to get closer to your goals whatever they may be is amplified that much more because you have tons of time to fail fast and recover with your ideas and aspirations.
2011 E92 M3 6MT ZCP - ESS 625 supercharged
2007 Z4MR
2003 E39 M5
2002 E46 M3
2021 X5 40i -
I'm trying to "not be a shitfuck" currently.
That line cracked me up xD
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