Can I really afford a BMW?

[fecurtis]

Originally Posted by Flying Ace

you must have a overbearing over-opinionated mother.

Half Korean....this is accurate.

[omasou]

1. fully fund your 401K
2. fully fund your Roth 401 IRA
Edit: 2a. fund your HSA
3. save until you can afford to be unemployed for 6 months to 1 year
4. relax you can afford to be unemployed
5. buy a condo, house, etc.
6. take BART
7. rent from Enterprise when you need to move something big
8. don't listen to reviewers who don't own the car
9. don't give a shit what others think about your house, car or clothes
10. retire early and enjoy life


Facts:
1. Your income will eventually be greater than the Roth 401K contribution limits
2. Today's interest rates are essentially free money buy a house not a car
3. Interest rates will eventually go up
4. A car is a depreciating asset
5. Dakota leather may not be as sexy as Merino/Nevada leather but is certainly better than Sensatec vinyl.

Affording housing in CA
1. Buy something smaller
2. Get a roommate(s)
3. Rent main house live in small house out back (the first house my brother rented the owner was living in the guest house for 5-10 years until he could afford to move the main house and rent the guest house.)

[brandoningram14]

Originally Posted by masou

1. fully fund your 401K
2. fully fund your Roth 401K
3. save until you can afford to be unemployed for 6 months to 1 year.
4. buy a condo, house, etc.
5. take BART
6. rent from Enterprise when you need to move something big
7. don't listen to reviewers who don't own the car
8. don't give a shit what others think about your house, car or clothes


Facts:
1. Your income will eventually be greater than the Roth 401K contribution limits
2. Today's interest rates are essentially free money buy a house not a car
3. Interest rates will eventually go up
4. A car is a depreciating asset
5. Dakota leather may not be as sexy as Nevada leather but is certainly better than Sensatec vinyl.

Affording housing in CA
1. Buy something smaller
2. Get a roommate
3. Rent main house live in small house out back (the first house my brother rented the owner was living in the guest house for 5-10 years until he could afford to move the main house and rent the guest house.)

Thanks.

Check on 1, 3 (I can live on nothing or move back home with parents), 6, 8.

Buying a house in the bay area right now is a huge risk or I would have done it already. I'd totally be up for buying and renting out most of the house right now. There's nothing I hate more than renting.





Those are the price charts of the cities near my area. Both are <2000 sqft townhouse 2bd/2ba and 3bd/3ba near my area.

At 1 mil, I'd need 30k for 3% down (let's say 40k because I'm sure there's closing costs and other fees), 20k for a car and another 40k so I can sleep at night (as a homeowner). So I'd say I'm looking at a net worth of 100k before I can buy a house (still)

[omasou]

Originally Posted by brandoningram14

Thanks.

Check on 1, 3 (I can live on nothing or move back home with parents), 6, 8.

Buying a house in the bay area right now is a huge risk or I would have done it already. I'd totally be up for buying and renting out most of the house right now. There's nothing I hate more than renting.





Those are the price charts of the cities near my area. Both are <2000 sqft townhouse 2bd/2ba and 3bd/3ba near my area

Unless we have another financial meltdown those charts are only going to go up.

You need to look harder and lower your expectation. This is your first house not your forever house.

If your making $130K your parent are planning to rent out your room, so moving home might not be an option.��

Buy a fixer up. Or live in Oakland, sorry just kidding about Oakland��

[M3 Number 86]

Originally Posted by Flying Ace

you must have a father who always appears angry, and is often found in smoky karaoke bars

That's me in the future lol

[omasou]

Here's an idea.

If your single, unmarried and without children you have the most free time that you will ever have in your life except for when you were in K-12.

Buy a house, fix it, flip it, repeat. Do this until you get the house you want.

or buy condos and rent them.

[John 070]

Originally Posted by masou

1. fully fund your 401K
2. fully fund your Roth 401K
3. save until you can afford to be unemployed for 6 months to 1 year
4. relax you can afford to be unemployed
5. buy a condo, house, etc.
6. take BART
7. rent from Enterprise when you need to move something big
8. don't listen to reviewers who don't own the car
9. don't give a shit what others think about your house, car or clothes
10. retire early and enjoy life


Facts:
1. Your income will eventually be greater than the Roth 401K contribution limits
2. Today's interest rates are essentially free money buy a house not a car
3. Interest rates will eventually go up
4. A car is a depreciating asset
5. Dakota leather may not be as sexy as Merino/Nevada leather but is certainly better than Sensatec vinyl.

Affording housing in CA
1. Buy something smaller
2. Get a roommate(s)
3. Rent main house live in small house out back (the first house my brother rented the owner was living in the guest house for 5-10 years until he could afford to move the main house and rent the guest house.)

Man this is good advice. When you said 401k and Roth, I already knew you were about to make a lot of sense. Most of us will hit the 401k cap as BMW drivers, and we will also be phased out of the Roth. But it's the concept of saving as much as the IRS allows. Especially when starting out. Truth be told you don't need a fancy car at 22, you should be chasing the opposite sex and living it up outside of a car....

[StatenEye]

Not going to read all of this but here is advice..

Buy the car but get it used. You wont know the difference and youll keep at least 40k in the pocket.

STAY AWAY FROM THE REAL ESTATE MARKET ESPECIALLY IN LARGER CITIES.

STAY AWAY

STAY AWAY

STAY AWAY.

http://www.cnbc.com/2016/03/28/this-...ommentary.html

The real estate bubble will burst soon. It is far more risky to take a loan on an asset that is almost GUARANTEED to depreciate immensely bc the necessary factors for valuation simply are not there i.e; Strong job market, GDP trending upwards or steady, Velocity of money trending upwards. The logic that the home values will rise while our economy is faltering, jobs are scarce and the future for most large companies are through revenues sourced from lower operating costs is not sound.

Home Buyer-ship has plateaued and the prices will drop soon. If you take a 40k loan on an M5 what's the worst that going to happen? You sell the car for 10k less that you paid? Try having an 800k mortgage on a house thats worth 500k like the poor souls from 2007.

Get the car but do yourself a favor and buy CPO and get an extended warranty. 125k is plenty to carry a 40k note. I would advise you to not take a 60k note, its senseless when you can get a CPO and essentially get the same car for a fraction of MSRP.

First chart is our GDP which is failing steadily over the same period the housimg market has resurged!

[John 070]

Originally Posted by StatenEye

Not going to read all of this but here is advice..

Buy the car but get it used. You wont know the difference and youll keep at least 40k in the pocket.

STAY AWAY FROM THE REAL ESTATE MARKET ESPECIALLY IN LARGER CITIES.

STAY AWAY

STAY AWAY

STAY AWAY.

http://www.cnbc.com/2016/03/28/this-...ommentary.html

The real estate bubble will burst soon. It is far more risky to take a loan on an asset that is almost GUARANTEED to depreciate immensely bc the necessary factors for valuation simply are not there i.e; Strong job market, GDP trending upwards or steady, Velocity of money trending upwards.

Home Buyer-ship has plateaued and the prices will drop soon. If you take a 40k loan on an M5 what's the worst that going to happen? You sell the car for 10k less that you paid? Try having an 800k mortgage on a house thats worth 500k like the poor souls from 2007.

Get the car but do yourself a favor and buy CPO and get an extended warranty. 125k is plenty to carry a 40k note. I would advise you to not take a 60k note, its senseless when you can get a CPO and essentially get the same car for a fraction of MSRP.

First chart is our GDP which is failing steadily over the same period the housimg market has resurged!

I think this is more sound advice. Say you buy a stock, what's the most you can lose? Your entire investment. Say you short a stock. What's the most you can lose? There is no upper bound. There really isn't any reason to buy real estate near the top IMHO, this isn't a game of musical chairs..

[jgoens]

Originally Posted by csu87

Awe sheet I got one going jgoens

I'm gonna go check it out.

edit..can't find it....nothing recent going.

[rad doc]

Originally Posted by masou

1. fully fund your 401K
2. fully fund your Roth 401K
3. save until you can afford to be unemployed for 6 months to 1 year
4. relax you can afford to be unemployed
5. buy a condo, house, etc.
6. take BART
7. rent from Enterprise when you need to move something big
8. don't listen to reviewers who don't own the car
9. don't give a shit what others think about your house, car or clothes
10. retire early and enjoy life


Facts:
1. Your income will eventually be greater than the Roth 401K contribution limits
2. Today's interest rates are essentially free money buy a house not a car
3. Interest rates will eventually go up
4. A car is a depreciating asset
5. Dakota leather may not be as sexy as Merino/Nevada leather but is certainly better than Sensatec vinyl.

Affording housing in CA
1. Buy something smaller
2. Get a roommate(s)
3. Rent main house live in small house out back (the first house my brother rented the owner was living in the guest house for 5-10 years until he could afford to move the main house and rent the guest house.)

Note under facts: Income greater than Roth 401k limit? Huh? There is no income limit on Roth 401k. Hit max of 17.5k every year. There is an income limit on Roth Ira but just backdoor it like rest of world.

[omasou]

Originally Posted by rad doc

Note under facts: Income greater than Roth 401k limit? Huh? There is no income limit on Roth 401k. Hit max of 17.5k every year. There is an income limit on Roth Ira but just backdoor it like rest of world.

Sorry, you're correct Roth IRA.

back door it?

[rad doc]

Originally Posted by masou

Sorry, you're correct Roth IRA.

back door it?

Fully fund Trad ira and roll over immediately into Roth acct. Perfectly legal. Also don't forget to fund hsa savings acct. if eligible, aka stealth ira.

[///3dkn]

Just buy the F80 M3 man! All your other worries and having a place to live and no money left over after its all said and done is future you problems.

[omasou]

Originally Posted by rad doc

Fully fund Trad ira and roll over immediately into Roth acct. Perfectly legal. Also don't forget to fund hsa savings acct. if eligible, aka stealth ira.

Forgot about HSA. If your company has it, which I do now.

[Benedict1957]

I don't think it's wise to spend any more than 2% of ones net worth on a car. If you can't afford to write a check for the car in principle, then you certainly can't afford to lease it and comparable cars in perpetuity.

[Benedict1957]

The net worth criterion works well because it encompasses a lot of the concerns others are bringing up in this topic. If you pass the 2% net worth test, then you've probably already been maxing out your 401K/IRA/deferred compensation plans already. You probably already have (and have possibly already paid off) a mortgage on a house. You probably have no student loan debt, etc. It's simple and clean albeit extremely arbitrary. Probably 99%+ people would fail the 2% test, but the few that don't are probably already affluent or are well on their way to becoming prodigious accumulators of wealth for their income bracket.

[PoorLurker]

Originally Posted by jtodd_fl

So.... NOT endorsing this site (whoever they are) or their formulations. Just throwing this out there as a jumping off point for your own research. Everyone's situation is different and not everyone lives solely off of "income". Food for thought. The older folks on here will scoff at the low recommended DTI and talk about leverage and such. However, leverage generally relies upon a reasonable "safety net" of assets - i.e. if shit goes upside down, you won't be homeless. Anyway, for your own consideration.... http://www.clearpoint.org/blog/what-...-ratio-anyway/

Wow! Are some of you eating at Alinea every week? 20% on food?

[SakhirM4]

Originally Posted by Benedict1957

I don't think it's wise to spend any more than 2% of ones net worth on a car. If you can't afford to write a check for the car in principle, then you certainly can't afford to lease it and comparable cars in perpetuity.

Are you saying that I should have has a net worth of $4mil to pay cash for my M4?? That is just ludicrous. I have no debt (no loans no credit cards, etc.), no mortgage (house is paid off), paid cash for my M4. Net worth is less than $500k.

[J.M]

Judging by all the comments with advice I get that living in the US must be financially very tough and uncertain.
To OP, best advice is: move to Europe! It's way nicer here :P

[rad doc]

Originally Posted by JJ_Moura

Judging by all the comments with advice I get that living in the US must be financially very tough and uncertain.
To OP, best advice is: move to Europe! It's way nicer here :P

Keep telling yourself that

[Don Molina]

Originally Posted by JJ_Moura

Judging by all the comments with advice I get that living in the US must be financially very tough and uncertain.
To OP, best advice is: move to Europe! It's way nicer here :P

True 'dat.

I wouldn't move to the US for anything under 300k a year