Financial advice

[Knicks_fan2]

Originally Posted by Arcoril

Housing is ridiculously expensive in California especially if you're in the Bay Area, Los Angeles, Orange County, or San Diego. A one bedroom apartment in a decent area with good amenities can easily be in the 2-3k/month range.

Maybe it's because both of my parents were immigrants, but I've never really understood the need to move out as soon as someone turns 18. In Europe and Asia it's really not uncommon at all to see multi-generational households and children who continue to live with their parents (and grandparents) even after getting married and even when they have the financial means to live on their own. There's a lot to be said about sharing expenses, sharing responsibilities, and enjoying home-cooked meals together.

I think that with high student debt, rising housing costs, and flat wage growth, moving out isn't as much a part of growing up as it used to be for young people. If he's got a good relationship with his parents and they're not overbearing, I don't see any issues. I think he should take advantage of the good thing he's got.

Excellent post. The drive to move away from your family and increase expenses is taken as too much of a given in our society. There are certainly benefits to be gained by living independently but costs that seem to be wholly underestimated by the general public here in America.

[ixse]

There are so many fun cars at less cost these days (focus rs, golf r, sti, rs3, m2). Its great time to be young enthusiast. Since you are so young, you wont look like a midlife crisis driving those. Plus cheaper parts/tires/pads makes thing that much better when u go tracking.

[CaryTheLabelGuy]

Honestly, live within your means, but remember: Tomorrow is never promised.

Have fun, be smart and live with no regrets.

[Fahrvergnügen]

Originally Posted by Arcoril

Housing is ridiculously expensive in California especially if you're in the Bay Area, Los Angeles, Orange County, or San Diego. A one bedroom apartment in a decent area with good amenities can easily be in the 2-3k/month range.

Maybe it's because both of my parents were immigrants, but I've never really understood the need to move out as soon as someone turns 18. In Europe and Asia it's really not uncommon at all to see multi-generational households and children who continue to live with their parents (and grandparents) even after getting married and even when they have the financial means to live on their own. There's a lot to be said about sharing expenses, sharing responsibilities, and enjoying home-cooked meals together.

I think that with high student debt, rising housing costs, and flat wage growth, moving out isn't as much a part of growing up as it used to be for young people. If he's got a good relationship with his parents and they're not overbearing, I don't see any issues. I think he should take advantage of the good thing he's got.

Look, I understand the differences in perspectives on moving out of your parents' place. I'm definitely not saying one is universally better than the other, but the OP wanted opinions so I gave mine. I've lived on 4 different continents (Budapest, Johannesburg, and Shanghai) and my girlfriend was born and raised in Beijing. I have friends in all of those places that live with their parents after college and in most cases, if it is a guy living at home, the majority would rather live on their own because they are dissatisfied with living with parents and the constraints. Women, on the other hand, didn't seem to mind until marriage. Just because living with parents in your 20s is more common in other countries doesn't mean they would not rather live independently, it is more common due to culture/money/house prices. The OP seems to make more than enough money to live by himself so that is why I commented why I did. And for the record, I know living with parents will save money, but everything has an opportunity cost.

[Tacoma]

Originally Posted by bloading

I paid off ~150k (with a little help from my parents) and have about 50k left to go. When I graduate, I'll be making ~$66/hr full time but hopefully pick up more shifts ~50-70 hrs/week while I'm still young and capable of this.

Let me get this straight... you're still in college and you've already paid off $150K of your student loan with a "little" help from your parents? How did you come up with this much money as a student, did you start up some kind of dot com company? Or maybe your parents helped more than just a little?

And then if that wasn't enough, you say you already have a job lined up after graduation earning $66/hr which translates to from $130,000 per year for 40hr week, to up to $230,000 per year if you "pick up more shifts." That's quite a first job coming right after graduation! Is your diploma a Harvard MBA? I don't think even Donald Trump's kids made that much straight out of college.

Nevertheless, if everything you say is right, then you must be some kind of genius prodigy destined to be CEO of something before 30, in which case go for the M3 now because your financial future is secured.

[Sassicaia]

1.) Pay off all your loans
2.) Create a savings account with one years earnings aka "F you Acccount"
3.) now you are in a position to consider frivolous spending

[Arcoril]

Originally Posted by ChicagoM4

The OP seems to make more than enough money to live by himself so that is why I commented why I did. And for the record, I know living with parents will save money, but everything has an opportunity cost.

Yes, but the OP was very clear that he intended to live at home. His question wasn't whether or not he should move out; it was whether or not to buy the M3 given the state of his finances.

By your own statement, moving out or living with family isn't universally better than the other. So why tell him that it's time to grow up and move out?

Anecdotally, I know a number of successful people in their mid to late 20s here in California who are pulling in 100k+ and are choosing to live at home with family when they're able to. In expensive metro areas I'm noticing that living at home no longer has a "loser" stigma associated with it. When most of their peers are also living at home it becomes harder to set that as an expectation.

It seems like most of the judgment is coming from us older people who moved out when housing, tuition, and economic conditions were wildly different. I think that this is going to be the new normal.

[socalsnake]

No insult intended to the OP...

but maybe seeking personal financial advice in a public car forum may not be prudent. You may get some decent suggestions, but seeking out more qualified sources maybe a smarter move (lots of literature/books available or better yet a certified financial planner).

...there...that was a decent suggestion imho.

[C-ARchitect]

Originally Posted by smithf32

What job are you making $66/hr at right out of college? Out of curiosity.

+1

$66/hr ($130k+/year) sounds extremely high for a fresh college grad with little professional experience. $66K/year sounds more realistic but even then is very high.

[secretariat]

Arcoril, in the good ole USA that is called low life mooching. In Europe three and four generations stay in the same house? If you ever watch a lion pride the males are thrown out of the pride when there hair gets a little long (adolescent males) Even animals know it's the right thing to do.

[Dalko43]

Originally Posted by Woodengun

Conservative personal financing:

Hold 6-12 months take home income in easily accessed assets (savings, short term CD, money market, maybe some in large corp stock).

Max your 401k contributions.

Invest $100+k into equities or other volatile securities or hire a personal financial advisor to help you invest/grow your money.

Investing $100k in equities and other volatile assets is a conservative approach?

Conservative approach = maxing out 401k, saving your money at a bank, and buying the m4 if/when you can afford to buy with minimal financing or outright.

[Douche]

Buy whatever you want when you have cash to purchase it/them. You can opt to finance if it makes more sense, but you have the cash in the bank should you fail payments.

Live by this, and you'll be well. Finance everything you can based on how much you can pay per month is a bad move. You never know what's gonna happen tomorrow, and selling a car is hard, and without losing a lot of cash, harder. You don't want the car or any other fixed expense to hold you back on your life.

Don't calculate or gamble with the future. Plan, and act later according to the plans you make.

[g_petko]

Man, pay your debts and by the car in cash when you can. It's amazing how you will think twice about buying something when you pay out of your own pocket.

[Fahrvergnügen]

Originally Posted by Arcoril

Yes, but the OP was very clear that he intended to live at home. His question wasn't whether or not he should move out; it was whether or not to buy the M3 given the state of his finances.

By your own statement, moving out or living with family isn't universally better than the other. So why tell him that it's time to grow up and move out?

Anecdotally, I know a number of successful people in their mid to late 20s here in California who are pulling in 100k+ and are choosing to live at home with family when they're able to. In expensive metro areas I'm noticing that living at home no longer has a "loser" stigma associated with it. When most of their peers are also living at home it becomes harder to set that as an expectation.

It seems like most of the judgment is coming from us older people who moved out when housing, tuition, and economic conditions were wildly different. I think that this is going to be the new normal.

I know the question wasn't around living at home or not, but I tried to comment on his financial question about the car holistically to give a different perspective. The OP obviously told people he was living with his parents for a reason.

To your second point, based on the information given (living in the US where moving out after college is normal and having a well-paying job) it seemed like something to consider.

Third point, I never said living at home has a loser stigma to it. I'm sorry if you have that misconception. I merely said, based on what I've experienced in multiple countries and cultures, men would generally want to leave if they had the means to leave home.

Last point, I hope you are not referring to me as "us older people". I bought my M4 last year when I was 26. I grew up in a trailer park in Indiana and moved out when I was 16 and never moved back home (even though I have a great relationship with my family). I paid for college with scholarships and loans, and graduated right after the 2008 recession (luck of the Irish). I now have 5 properties in 2 countries and a relatively good job but still live a fairly conservative lifestyle. I never received help from parents and wouldn't take it if they did, just not how I roll. So, yes, like you said my economic/housing/tuition situation was quite different and it is sad to hear how 'bad' people have it these days and having to live with their parents is the 'normal', it seems very selfish.

[nicknaz]

OP, it's such a personal decision. My take is get an e36 or e46 m3 now and pay off debts and save/invest like crazy.

Being student debt free then having the down payment and ability to buy your house/apartment is huge in my opinion. Not to mention if you want to do more school or pay for sig other grad school, etc.

For what it's worth I had $1500 Hondas (gsr/vtec y0) for some time so I took my own advice.

Edit: agreed with others your region in the U.S. makes a big difference. $200k /Yr consistent income can feel like a relatively low number in places like SF Bay Area and Manhattan.

Edit2: if op is in a skilled trade and will do overtime his income is very credible to me. There are many business jobs that pay that or more also (ie top coder from Stanford in SF area)

[xsilvor]

The folks above said it well. There are many more responsible things to spend your earnings on at this point in your life. Throwing money at something that depreciates as quickly as a new car is tough to stomach no matter what stage of your career you are in.

[dreamsongs]

Originally Posted by Tacoma

Let me get this straight... you're still in college and you've already paid off $150K of your student loan with a "little" help from your parents? How did you come up with this much money as a student, did you start up some kind of dot com company? Or maybe your parents helped more than just a little?

And then if that wasn't enough, you say you already have a job lined up after graduation earning $66/hr which translates to from $130,000 per year for 40hr week, to up to $230,000 per year if you "pick up more shifts." That's quite a first job coming right after graduation! Is your diploma a Harvard MBA? I don't think even Donald Trump's kids made that much straight out of college.

Nevertheless, if everything you say is right, then you must be some kind of genius prodigy destined to be CEO of something before 30, in which case go for the M3 now because your financial future is secured.

+1.....I'd like to know this too. Only because if you're pulling in 130k per year and paid off most of the loan AND living with your parents then there isn't much left to worry about.

If this is the case then go get your M3 and you'll still have plenty left over for your 401k. You only live once.....

[MaynardZed]

Originally Posted by nicknaz

OP, it's such a personal decision. My take is get an e36 or e46 m3 now and pay off debts and save/invest like crazy.

Being student debt free then having the down payment and ability to buy your house/apartment is huge in my opinion. Not to mention if you want to do more school or pay for sig other grad school, etc.

For what it's worth I had $1500 Hondas (gsr/vtec y0) for some time so I took my own advice.

Edit: agreed with others your region in the U.S. makes a big difference. $200k /Yr consistent income can feel like a relatively low number in places like SF Bay Area and Manhattan.

Edit2: if op is in a skilled trade and will do overtime his income is very credible to me. There are many business jobs that pay that or more also (ie top coder from Stanford in SF area)

Yes get something more reasonable, even an E90 M3 for $35-45K seems way more reasonable than parking a brand new $70K M3 in your parents driveway after they've just paid a huge chunk of your student loans and you are paying them back interest free. I personally would feel guilty doing that. I actually moved into my parents house for 6 months after I graduated. I drove a Buick LeSabre until the steering wheel literally fell off though.

[Douche]

Originally Posted by MaynardZed

Yes get something more reasonable, even an E90 M3 for $35-45K seems way more reasonable than parking a brand new $70K M3 in your parents driveway after they've just paid a huge chunk of your student loans and you are paying them back interest free. I personally would feel guilty doing that. I actually moved into my parents house for 6 months after I graduated. I drove a Buick LeSabre until the steering wheel literally fell off though.

Where did you get 70? An M3 is 100+.

[MaynardZed]

Originally Posted by Douche

Where did you get 70? An M3 is 100+.

I bought my M4 for $69K. If you paid $100K, your salesman is awesome.

[Douche]

Originally Posted by MaynardZed

I bought my M4 for $69K. If you paid $100K, your salesman is awesome.

Fully loaded you say? That's cheap. Your salesman must be starving.

[nicknaz]

Originally Posted by MaynardZed

I bought my M4 for $69K. If you paid $100K, your salesman is awesome.

+1

Or you check every box and did an individual paint and interior

My car was $67k out the door including 9% Los Angeles taxes and dmv fees