Don't spend too much on 1st car, mine cost me 2 million dollars...

[doublebase]

What you actually invest in is also important. I spent years chasing high returns, but they would fall back and then end up trailing the S&P 500 for years. Finally gave up years ago and just did the S&P 500 plus reduced my exposure chasing funds with big one year numbers and focused more on funds with a better long term track record.

Also bought property about 15 years ago. Maybe it's kept track with inflation but you forget that my down payment was just 25% so the return is actually 4x inflation. Plus the rents have paid for half the mortgage and updates at this point.

There was also a point where after factoring in the market down turn, the market didn't do anything for 10 years. Only in the last few years has the market really shot up. You have to stay in the market to catch those run up, otherwise most of the time it's just sideways and does nothing.

It's just too bad in this culture it's fine to moan and groan about how broke you are, but the ones who are doing really well keep quiet. You never hear Gates, Buffet, Bezos, etc complain about not having enough money.

I do basically the same thing, invest in the s and p 500 index in my 403b. I do have small amounts in bond funds, real estate investment trusts, healthcare and renewable energy, but probably 70% in just in index funds. And you know what? I probably should put 100% of it.

Bought my first house at 26, paid it off when I was 34. Rented it out now for 12 years. Just made what I hope is not a HUGE mistake...purchased a $900,000 dollar home to live in, that probably needs $50,000 of work. Put $400,000 down, have a half million dollar mortgage at 3.1%. I usually don’t do things like this but you only live once, always wanted to, I work hard and I pray I can get my money back (and then some) in five years. Either that or I’ll be laid off and I’ll lose everything. Lol. At my age I really don’t care anymore. I still put 10% of my salary away into investments/retirement. I don’t have car payments. And I should get a pension at 60...probably 70% of my salary. We shall see. In the end it really doesn’t matter, I could get hit a by a bus tomorrow (or today, but I hope not, it’s the weekend).

 

[doublebase]

The key to financial success is buy that toy AFTER you have a career and making good money.

Theres a young YouTuber that recently bought a used $55K car (72 months at 8% loan) and says he wants to be a full time YouTuber making car content. He lives with his grandma and is financially stretched to the limit. He is like 20 years old and will probably destroy his car in a short time like he did his last car.

He has 16K subscribers, does not have a regular full time job and dropped out of college to follow his YouTube dream.

I know a kid that did this...smartest kid I’ve ever met. Said he wasn’t going to college, didn’t want to work (after he was offered a great job that would start him at $60,000 a year and he was only 18 at the time). Said he didn’t want to make “short money” and work hard for someone else.

He now has a YouTube channel making stupid car videos. He’s got 3,000 subscribers and is stoned every single video. i guess he grows and sells weed too. Either way it looks like he smokes most of it. I bet he makes $15,000 a year. And believe me this kid is/was smart. Skilled at everything he did. What a waste.

 

[dareo]

doublebase i don't think you made a mistake at all. You have great equity in the property and will gain like 850 a month from paying it down. You get the utility value of the nice home. I have no idea what it would cost to rent a similar home in your area but i would venture a guess in the $4k range per month.

The only mistake might be not refinancing that 3.1% rate. You could probably drop that to like 2.5% right now with reasonable costs.

 

[PandaBear]

I know a kid that did this...smartest kid I’ve ever met. Said he wasn’t going to college, didn’t want to work (after he was offered a great job that would start him at $60,000 a year and he was only 18 at the time). Said he didn’t want to make “short money” and work hard for someone else.

He now has a YouTube channel making stupid car videos. He’s got 3,000 subscribers and is stoned every single video. i guess he grows and sells weed too. Either way it looks like he smokes most of it. I bet he makes $15,000 a year. And believe me this kid is/was smart. Skilled at everything he did. What a waste.

There are always people like that in life. When I was in elementary school this one kid was always the smartest without doing any work, and got into the best school on scholarship later. Then he flunk and dropped out of school later on when the challenges get tough and he couldn't just get by being smart (but have to do real work).

Later on I was told he joined a gang and was involved with some adult entertainment related business and married one of the ladies. He never went home and one of our elementary school friend said his parents were trying to reach him but couldn't. In the end when his parents moved home he still didn't show up or respond, and us former friends ended up helping out his elderly parents move instead.

Some of us suspect that he might have been in jail and didn't want to worry his parents, or crossed the wrong guy in the business and is dead.

 

[doublebase]

doublebase i don't think you made a mistake at all. You have great equity in the property and will gain like 850 a month from paying it down. You get the utility value of the nice home. I have no idea what it would cost to rent a similar home in your area but i would venture a guess in the $4k range per month.

The only mistake might be not refinancing that 3.1% rate. You could probably drop that to like 2.5% right now with reasonable costs.

2.5%? Don’t tell me that, I just closed three weeks ago! Ugh. I decided to lock a month before hand - because I was concerned rates wouldn’t go lower, but possibly up - and of course they dropped again. Haha.

 

[alarmguy]

So it was about 2003, i purchased a 1989 Nissan 240sx with high miles for 2k. I bought wheels, suspension, stereo, drove it a ton, threw a rod on the stock engine around 225k miles. I did the SR20DET swap with a nice intercooler, skyline seats, ect, i spent at least 8000.00 extra on this car that could have been considered optional. After driving it around like an idiot for about a year i blew the SR20. I was broke and traded the broken car for something that ran reliably. Had i simply placed that extra cash into Apple stock, that would be worth over 2 million dollars today.

Lesson? If your young, spending money costs an absolute fortune in theoretical opportunity costs.

Good post. I think by far in todays world with the young (and old) is, they are unwilling to sacrifice.
Meaning, they borrow money from other people to buy stuff that they haven't saved any money for. I think that would be step one, stop borrowing money and only buy what you can afford to pay cash for. Since when did it be considered normal to go around asking to borrow money for stuff you have no money for?
People are no different then rodents, they will take and eat anything that is given to them no matter what the cost.
Ex. they will buy a $35,000 car even though they only have $10,000 or no money at all.
They will put stuff on charge cards and not be able to pay the full amount at the end of the month.

The perfect example of how Americans have changed over the years is this.
Look at car ads (and lots of other stuff) now adays. You cant even find the price of a car anymore in the ad, you only see monthly payments.

If people first stopped borrowing money for things they were too immature to save up for, then with the savings (in time) that they saved by not paying interest and applied it to lets say, market index funds, they would be able to retire one day, but to many of them complain how unfair life is once they end up broke.
Im not talking about everyone of course, but yes, the vast majority.
The sole objective in life should be able to get and stay out of debt to others, then you can actually be free, its a great feeling, great goal to have and when you get their invest.

 

[Andrew1972]

Stocks are for when you are so financially secure that losing the entire amount does not hurt your financial picture.

I have placed only $100 or $1000 max into a few in the past and done well with one Oracle but the rest lost the value. Reality is had a put the money into my 401k in the 20's instead of individual stocks. There is a distinct reason why the "rich get richer" from the stock market. The losses don't destroy them financially like a person who owns a $2000 car and makes loan payments because they cannot afford a car.

 

[JeffKeryk]

Credit is a tool, just like a hammer. Use it correctly and you might build a house. Use it incorrectly and you might smash your thumb.
It is not good or bad but the way people choose to use it certainly can be.

 

[wpod]

There is a difference in having a $1000.00 per month car payment when you make $2,000.00 per month income and your net worth is 0 vs buying a Leer Jet when your income is $5,000,000.00 per year and your net worth in the billions.

 

[TwiceUponATime]

I've heard of, and was friends with too many people who spent their lives building their fortunes and squeezing the life out of every nickel, with big plans of retiring comfortably in their favorite spots. They dropped dead shortly after retirement. They died having never bought that cool car, or seeing Fiji, or enjoying the finer things in life while they were breathing. I don't want that to be my story.

It seems an all too true for many...shriveled souls that left this world too soon!