22 Years Old and wanting more...

[SLC Tortfeasor]

Ok, I'll push the Porsche to age 25 

I was thoroughly committed to the idea of getting a Ferrari 308 (the kind Magnum P.I. drove!) by the time I was 30.  I mean, it was something just short of a religion for me.  What I found was that after years of hard work, once I could finally afford that car, I realized it just wasn't worth it to me anymore.  Once you realize the true long-term cost (especially the opportunity cost) of an expensive car, you realize what a waste they are.  I'd rather be the smart, high net worth guy driving a relative beater than the dumb, high income guy with debt driving a hot car.

As an example, if I was buying a Porsche, I would get a nice 1999 or 2000 911 Carerra 2 with a full Aero kit.  I've found great ones for sale on Ebay and Autotrader ranging from about $38k to $45k.  These are hot cars.  Of course, they primarily appeal just to other car guys, but no matter---they make you feel like a superstar.  But what if you invested that money instead?  Assuming a reasonable/conservative 8% rate of return on a 30 year investment in stocks, you could turn $40k into about $80K in 30 years.  Despite inflation, you could probably live off of that investment alone for over a year, depending on how frugal you were.  Go play around with the calculators at http://abcnews.go.com/Business/FinancialSecurity/story?id=133188

Having said all that, I have to admit that I recently bought a used Nissan 350Z.  Now I can still get my kicks playing the role of the young bachelor in a hot car, even though I didn't have to break the bank to do it.

 

[Nords]

I'd rather be the smart, high net worth guy driving a relative beater than the dumb, high income guy with debt driving a hot car.

Having said all that, I have to admit that I recently bought a used Nissan 350Z.  Now I can still get my kicks playing the role of the young bachelor in a hot car, even though I didn't have to break the bank to do it.

Our cars reflect our values, not our net worth...

 

[JPatrick]

QuoteSharebuilder:
Sirius Sat Radio = 15 shares = ($90)
Busweiser = 5 shares = ($230)
QUOTE:

I don't know much about Sharebuilder except that it allows small investments for small fee's.
I would encourage you to keep adding bits and pieces of stock when you can, but to look for a  no cost program.  If you do some research on "DRIPS" you will find lots of deals some totally free and some not.
Here's an example of my favorite.
Cinergy (CIN)  100% no fee!  They hold your shares for you. Invest each month from $25 and up to a max of 30K per year.  No need to invest every month or any month.  They will automatically reinvest your dividends if you like.
I got 35 shares of this company as a gift many years ago and have since made it a habit to send in my leftover money from my living expenses account each month.  Sometimes $200 and sometimes only $25, but always something.  This process also makes me a bit more frugal with the everyday cash cause it is so damn much fun to send in that check each month.  True CIN is a bit more boring than BUD, but they have been rocking lately.

Owning 5 BUD shares- -$231.20
Watching the bartender tremble when you walk in- -Priceless

 

[cute fuzzy bunny]

My porsche was a great car to drive, while it wasnt in the shop, a lousy car to own. Hated it after a few months. Hated the flurry of tickets I got while driving it for completely bullshit stuff like 2mph over the speed limit, three 'improper starting/stopping/turning' which is the ticket they give you in MA when they want to write one for no reason that you cant fight, etc. Five moving violations in five weeks. The car was good (?) at one thing...attracting extremely poisonous women.

Drove whatever low end ferrari was being offered at the time...I think it was a mondial. Seats were too small, shifter felt like it was connected to the tranny with a long piece of rubber tubing, the trunk was laughably small, and it rode like the shocks had been replaced with concrete blocks. Hated it.

Checked out the Lamborghini Diablo. They shouldnt have bothered to put a rear window in it, you couldnt see jack out of it...and with a car like that you need to see the nice police man behind you before you do something stupid. Felt like I had been entombed in a coffin rather than sitting in a car. Same rubberized shifting mechanism. Hated it.

Actually owned a corvette for a year and half and liked that a lot better than any of the above. Rode and drove just fine and the maintenance was a lot cheaper.

I hear the new mustang, built on a chassis similar to the lincoln ls and jagoooar is a pretty sweet rider/driver at a bargain price.

 

[Jay_Gatsby]

Always wanted a sportscar myself, but have yet to buy one.  The 350Z is a great looking car, but there's no passenger room and the seats are too tight for people with broad shoulders (like me).  Overall, sportscars are fun to drive, but if you're going to own one, you better have access to a reliable sedan for more practical and mundane uses.

Of the available sedans, I fit extremely well in the 3-series BMW, but frankly, I don't want to pay the inflated prices for the car (new or used), nor the inevitable and expensive repair bills.

These days I still drive an 11-year old Honda Accord with a broken air conditioner.  Why?  Because it's paid for and gets 28 miles to the gallon.  Nobody really sees me driving it, and I don't care if it gets the occasional ding or scratch.  Low stress (except on hot days).

 

[geeman]

Yeah, I have a 13 year old Honda Accord right now with 200K miles. Runs great for the time being. I'm not really considering a Porsche, it's just a dream. I am looking into the new Mustang GT or a Suabru WRX...

 

[justin]

Geeman,

If you want that sleek, sporty chick magnet car, buy it. But save up the money and pay in cash. It shouldn't take more than a year or two of saving some money to pay for your new car purchase. At least figure out what a car loan payment plus insurance would be for the car of your dreams. Then each month, take that much money out of your budget and leave it in your MMA or other savings account. If after 6 months of "paying" for your car you think that you want the car enough to continue paying for 3-5 more years, then buy it. You will be forced to wait 6 months to see if you want it, and you will have saved up a significant down payment on it. Personally, a new "luxury" car would be just that, a luxury, and I wouldn't use credit for it (unless the terms are right...).

Look at a 1-3 year old car first though. It can save you a ton of your hard earned $$, and you still have a decent, relatively new car.

 

[SLC Tortfeasor]

Geeman,

If you want that sleek, sporty chick magnet car, buy it.  But save up the money and pay in cash.  It shouldn't take more than a year or two of saving some money to pay for your new car purchase.  At least figure out what a car loan payment plus insurance would be for the car of your dreams.  Then each month, take that much money out of your budget and leave it in your MMA or other savings account.  If after 6 months of "paying" for your car you think that you want the car enough to continue paying for 3-5 more years, then buy it.   You will be forced to wait 6 months to see if you want it, and you will have saved up a significant down payment on it.  Personally, a new "luxury" car would be just that, a luxury, and I wouldn't use credit for it (unless the terms are right...).

Look at a 1-3 year old car first though.  It can save you a ton of your hard earned $$, and you still have a decent, relatively new car. 

This is the exact strategy I followed.  I saved for 6 months, then used a "home equity car loan" to pay for the remainder, which wasn't too much.  The loan is actually at a lower rate than my mortgage, and also tax deductible.

Of course, I still feel somewhat guilty about it, because as much as I love my car, it's dragging my net worth down, rather than pumping it up.

 

[Jay_Gatsby]

Of course, I still feel somewhat guilty about it, because as much as I love my car, it's dragging my net worth down, rather than pumping it up.

This is why I haven't bought the new(er) car. My parents once owned a 1979 240D Mercedes sedan. After my parents were done with it in the mid-80s, each of the kids drove it. Finally, in 2001 or 2002 (I forget exactly), one of my sibilings totaled it in an accident.

I think my parents got their money's worth out of the car (22 or 23 years). Don't you?

 

[comixfan]

Sure.  But i'm unfamiliar with any boomtown real estate regions where you can "make money for sure, everyone else has!" where the cost of the property is anywhere NEAR the underlying value.

So you've been looking at property for investment in your area?  I bought a nice condo in Florida on the water (near Sarasota) for about 60% LTV recently.  As far as underlying value goes, if I can rent it out for more than I'm buying it for with a conventional loan and no money down, then it's underlying value is sound.  It can be done, although it's not easy by any means.

And there are tons of deals to be had in non boomtown real estate regions of the country (like where I'm at in Alabama).

 

[cute fuzzy bunny]

240D's were great cars. You had to walk up and slap the engine now and then to wake it up and have it actually DO something, but hard to kill. I had the larger 300TD for a while and really, really liked it for all those 200-300 mile round trip jaunts I had to make when I was in sales. 26-27MPG out of a car that big wasnt too tough to take...

Unfortunately, since mercedes bought chrysler the build quality of the mercedes cars has caught chrysler disease...

 

[JPatrick]

Comixfan you gotta be somewhere other than Baldwin Cty cause they sure look like boomtown USA the last few years.
Tell me where the deals are. Coming down to buy (or at least try) in August.

 

[comixfan]

Comixfan you gotta be somewhere other than Baldwin Cty cause they sure look like boomtown USA the last few years.
Tell me where the deals are. Coming down to buy (or at least try) in August.

I'm in Montgomery county. I avoid mls like the plague and stick to fsbo. I am finding houses in good appreciation areas (10 - 15% per year) for 10 - 15% under market value. I lease/option them from the owner and then lease/option the place to a new tenant. Really a pretty simple process. Just a matter of being patient.

Also, unlike some other parts of the country, you can buy an investment property here(like a duplex or triplex) for 60 - 80k and net 200 - 400 a month conservatively pretty easily. It's especially easy doing these deals if the owner carries the note. Being a landlord is not my thing though, so my profit margin would be cut down considerably by the property management fee of 10%.

Baldwin county is booming right now? It's a seller's market here too, but not to the point of bidding on houses or having the houses go over the asking price like in Fl. The Hyundai plant just opened up in May so that should create a pretty tight supply and high demand over the next year or two.

 

[Jay_Gatsby]

240D's were great cars.  You had to walk up and slap the engine now and then to wake it up and have it actually DO something, but hard to kill.  I had the larger 300TD for a while and really, really liked it for all those 200-300 mile round trip jaunts I had to make when I was in sales.  26-27MPG out of a car that big wasnt too tough to take...

Unfortunately, since mercedes bought chrysler the build quality of the mercedes cars has caught chrysler disease...

Yeah, 240D's could run seemingly forever. Zero to 60 mph in 15-20 seconds, but once you were up to speed you could set the cruise control and forget about it.

I've always thought about buying an early-1980s convertible mercedes (380 or 560) as a weekend "fun" car. Although such cars are now 20+ years old, when kept in great shape they still turn heads.

 

[cute fuzzy bunny]

The only not fun part of those is when they DO need work. I had an old early 70's 450SL I bought as a project car. Didnt need much at first, but the stuff started adding up. I couldnt BELIEVE what they socked me for to buy parts for it. I finally gave up on what seemed like the most innocuous repair...all the knobs on the heating controls were broken off. Turns out, you cant just put new knobs on, you have to replace the whole assembly in the dashboard. After fiddling with it for 2 days, I went to an old mercedes guy (even named 'fritz') with a crappy garage downtown. He listened for 5 seconds and said "no thanks...those are such a huge pain in the butt to put in I dont wanna do it..." I offered him $500 to simply remove the dashboard center piece, replace the heater controls and replace the dashboard. Nope. "You'll never get the dashboard back in. Ever" he said.

One thing about those old diesels? You couldnt get any acceleration out of them, but you could pull a house off of its foundation with the torque...

 

[yelnad]

About that "Property Ladder" show. My husband and I really enjoy it because we do flip properties locally. We laugh at these people. I wish we were able to take 3-4 months off from our real jobs to get it all done like they do on the show!

The most recent episode mentioned, where the two women made $17,000 on a 4 month flip (which was most likely really only $3000-8000 divided by two)...they said at the beginning of the episode that they were going to use the profits for BOOB JOBS!! No wonder they bought a second property to flip before they finished the first.

 

[geeman]

Ha, yea. I would like to see their profits after fees and taxes.

 

[haha]

As an example, if I was buying a Porsche, I would get a nice 1999 or 2000 911 Carerra 2 with a full Aero kit.  I've found great ones for sale on Ebay and Autotrader ranging from about $38k to $45k.  These are hot cars.  Of course, they primarily appeal just to other car guys, but no matter---they make you feel like a superstar.  But what if you invested that money instead?  Assuming a reasonable/conservative 8% rate of return on a 30 year investment in stocks, you could turn $40k into about $80K in 30 years.  Despite inflation, you could probably live off of that investment alone for over a year, depending on how frugal you were.  <>Having said all that, I have to admit that I recently bought a used Nissan 350Z.  Now I can still get my kicks playing the role of the young bachelor in a hot car, even though I didn't have to break the bank to do it.

Smart move getting it, though they look like crap compared to a 911. Testosterone only lasts so long- use it while you have it. Before you know it you will look like an old lady.

haha

 

[HFWR]

Ha, yea.  I would like to see their profits after fees and taxes.

And after the operations!!

 

[Mr._johngalt]

About that "Property Ladder" show. My husband and I really enjoy it because we do flip properties locally. We laugh at these people. I wish we were able to take 3-4 months off from our real jobs to get it all done like they do on the show!

The most recent episode mentioned, where the two women made $17,000 on a 4 month flip (which was most likely really only $3000-8000 divided by two)...they said at the beginning of the episode that they were going to use the profits for BOOB JOBS!! No wonder they bought a second property to flip before they finished the first.

Thank you for keeping us abreast of of this important issue. Who was the titular head of the partnership? Seriously. I was uplifted by this story of
entreprenuerialism. Sounds like these women expanded their assets.
Sounds right to me. Drive right in. Don't nipple around the edges.

JHG

 

[REWahoo]

Thank you for keeping us abreast of of this important issue. Who was the titular head of the partnership? Seriously. I was uplifted by this story of
entreprenuerialism. Sounds like these women expanded their assets.
Sounds right to me. Drive right in. Don't nipple around the edges.

JHG

JG, your're a hoot...er.

REW

 

[Jay_Gatsby]

JG, your're a hoot...er.

REW

Thanks for getting that off your chest.

P.S. To JG -- I don't think that's what the original poster meant when he titled his post "22 years old and wanting more..." Then again, I could be wrong.

 

[gravesend]

Geeman,

I have some experience in r.e. "flipping"   Here's my story.

I started at 24 to look for a place to buy to live in and was in contract for a 1br condo in 2002.  while in contract, I found another incredible deal and assigned the contract to a family member who at first was apprehensive.  the condo was for 85k and commanded 975 a month in rent.  right now, it is worth 175k, and I am a bit sad I don't own it.

But it worked out anyway.  I bought a 200k condo that's now worth 400k+, and my equity in that is 250k+

After I got settled in my own apartment, I started looking again.  I read a lot of real estate investing books that each have their own strategies.  I picked the ones i was most comfortable with and followed through.

For example, I found an undervalued brand new construction in an up-and-coming neighborhood.  I don't know how the developer priced it, but it was priced very low.  Regardless, I purchased a studio for 95k.  I sold it a few months later with minimum carrying costs for 150k.  I came out of that deal up 37k. 

I then went and purchased another condo in another up-and-coming neighborhood for 150k.  Spent about 10k in fixing it up.  A lot of sweat equity later, I sold it for 229k.  This one netted around 50k.

Right now, I am in contract for 2 more condos in yet another up-and-coming area and I plan to do the same to 1 of them and hold the other one.  I am very confident with the first one, because it is a place where i would personally live in and the area is great.  Also, a new train station is opening up which will bring the value up even more. 

I have many options since I've lived in my current Primary Residence for more than 2 years that I can take the gains tax free.  then prehaps live in the new up-and-comer for 2 years and resell for more tax free gains.  Many possibilities.   (oh, my PR is also in an up-and-coming neighborhood)

I just turned 28 and I am at about 400k in net worth..  i treated myself to a brand new suv (which i used to transport materials for the rehab that i did) so it contributed to my R.E. experience.

As you can see, I really like up-and-coming neighborhoods.. i stick with what worked for me and I like the results. 

My suggestions to you are:
1) buy a place to live in first.. or live with your parents.. stop paying rent.
2) read a lot of real estate investment books but don't forget the fundamentals.  I don't have the guts to go pre-construction in FL so i focus on the deals i am comfy with and I seem to have done ok.
3) take classes in r.e.   -  I took R.E. Finance, and I have a Sales Agent license.. just so i have more knowledge of the subject
4) save, save, save!  get a 2nd job.  make that first downpayment.

My next goals are
1) to live for free..  meaning i don't want to pay my mortgage out of my own pocket.  I want someone else to do it.  hopefully, i can find a multi unit property with enough cash flow to pay my mortgage so i get to live "for free"
2) higher education - i thought about mba but that really isnt for me.  i am gearing towards an MS in R.E. with focus on Finance & Investment
3) chill out and destress.

uhmm.. this may be more info than you need.. but if you have anymore questions just PM me.

 

[geeman]

I wouldn't mind making 90K this year like you have. A lot of people are saying that it is too late to get into real estate... What do you think? What area do you live in?