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[StreetsofBeige]

I've owned cars over the $500k mark and let me tell you - dudes in that category of wealth rarely started out rich, myself included ! I always say the car loan thing is the worst situation to be in because cars are mostly depreciating assets unless you know what you are doing. For the average minimum wage or middle class salary worker, car payments and maintenance is the single largest expense blocking them from being wealthy via investing.

My first car was a 1995 toyota with 229,000 miles on the clock. I added another 50,000 over 6 years of ownership before it finally died. The money saved during that period alone was the seed money that would eventually start my business, and ultimately became the money I bought my Pista with.

People's main problem when it comes to personal finance is the inability to live within their means because they want to look wealthier than they are. Their peers opinion of them is more important than sleeping at night, while everything is borrowed and loaned.

I have lived both sides of the fence - when I was completely broke and homeless a $5 from a stranger could mean the difference between eating and starving for a whole week on the streets. I learned how to make money go a long way and how to buy things with value for less than they were worth, which set me up for later life.

Dont you love it when you see people who dont have a lot of money ordering Ubereats and Doordash?

Never mind just eating at home for cheap, or treating themselves to take out on the way home. Instead, uber it an the total cost of their take out will probably 2x what it is after the jacked up price, delivery charge, tax and tip. It's like the guy who posted eariler this week the thread about doing uber delivery for ravioli and got 8 pieces for $35. You could buy a modest amount of groceries for $35.

 

[AmuroChan]

I do the same. I use it for all company expenses too. I get back around $500-800/yr. I can use the company card if I want. No thanks. I'll handle it myself, get the dividend pay back and expense it all later. Been doing this for 10 years.

Most of the time I expense it before my credit card payment is even paid off. So the payables clerk who processes it all pays me back faster than I even pay it off. lol

About a decade ago the government did a program to try to recirculate $1 dollar coins into the economy. They were selling them direct at cost and I bought $10K worth of coins with my CC. Then I took the coins to my bank and deposited them. So essentially I got $10K worth of free points on my CC.

 

[Lasha]

Vacations are what I see people even with lots of money get themselves in trouble. Travelling 2 times a year when it’s not in their budget.

This line hits so close to home. My friends take vacations 3x-4x per year. Usually 3 around SEA and one back to EU/US. I get teased because I almost exclusively holiday in Malaysia. Malaysia is a microcosm of SEA with everything a family would want to do within a max 10h drive. Rent has gone up so much now that these same friends are contemplating leaving because the lifestyle they live can no longer be sustained and the basically saved no money. Its depressing seeing how "elite" people fuck their cash up.

I'd say for homes and cars it's okay. Pretty hard for anyone in life to peel out $400,000 for a home or $40,000 for a car in pure cash.

But for anything else, it cant be that hard to avoid it. Even if someone goes on debt for extra stuff (I did when I first moved out and needed to buy furniture), why the hell would anyone go on 20% credit card debt? Just use a line of credit for 6%, or take advantage of a store's no interest 12 or 24 month payment plan. I did and paid I think a $70 admin fee for like $2000 of stuff for 24 months no interest plan. That's 3% or 1.5% per year using the admin fee as an interest rate fee. When month 24 comes rolling around I went to the store to pay it off in full. Better than putting it on CC at 20% per year needing to chip it down as I go month by month. The rest of my starting gear when I moved out for the first time was cheap shit from Ikea. Someone can buy all their kitchen gear, pictures, cups and a shitty living room rug for probably $300 total. A wooden balcony table and chair set was like $79.

Problem is people dont use their head. And the first thing they do is pull out a credit card and letting bills pile up as if they never have to pay for it. Some people have sense and pull out a debit card so they pay only what they can afford.

Cars are $40,000 because debt has become more acceptable. Honda stopped selling the fit in America around 2020 which was one of the last cars available below $20,000. A 5 year car note was considered irresponsible when I was growing up. 7 year notes are the norm because people are conditioned to get "more car" for "only a little more per month". Car prices would fall if borrowing habits changed or people bought smaller cars.

 

[EviLore]

indeed. I employ 24 staff across 2 companies and not a single one of them went to a prestigious school.

Prestige is one selection heuristic you can use depending on your cash flow, but they're going to command high salaries from the start, so they'll typically go to the big corporations. For startups and small businesses the name of the game is finding the people from the C pool that are actually As and Bs, or can be shaped into them over time. Then you grow and succeed together.

 

[daveonezero]

Realistically they should just declare bankruptcy and get rid of everything but the mortgage and student loans

 

[Fools idol]

Dont you love it when you see people who dont have a lot of money ordering Ubereats and Doordash?

Never mind just eating at home for cheap, or treating themselves to take out on the way home. Instead, uber it an the total cost of their take out will probably 2x what it is after the jacked up price, delivery charge, tax and tip. It's like the guy who posted eariler this week the thread about doing uber delivery for ravioli and got 8 pieces for $35. You could buy a modest amount of groceries for $35.

Indeed, the cost of convenience is expensive accross the board.

I still batch cook my meals and freeze everything xD

 

[RJMacready73]

People's main problem when it comes to personal finance is the inability to live within their means because they want to look wealthier than they are. Their peers opinion of them is more important than sleeping at night, while everything is borrowed and loaned.

This is so true, especially around where I live which is a nice area and everyone drives nice big cars, my company car is getting replaced this August and the company offered me a car allowance so I could pick my own motor, so I looked at getting a nice big sporty Audi and when my wife seen the figures I'd be dropping on the Audi a month she told me to take a wise and put the kaboosh on that dream lol it was nearly a mortgage blew every month on a car I wouldn't own... Tbf it was madness, so opted for the more reasonable company car with everything paid for, but when I look around me this is simply what people do, they wanna drive nice motors and unless you're earning proper money, they're paying through the nose for the privilege of looking good to the neighbours

 

[jason10mm]

Realistically they should just declare bankruptcy and get rid of everything but the mortgage and student loans

If they both work for the government that can be a problem. Hell, that kinda debt may keep them from a good security clearance already.

 

[Fools idol]

This is so true, especially around where I live which is a nice area and everyone drives nice big cars, my company car is getting replaced this August and the company offered me a car allowance so I could pick my own motor, so I looked at getting a nice big sporty Audi and when my wife seen the figures I'd be dropping on the Audi a month she told me to take a wise and put the kaboosh on that dream lol it was nearly a mortgage blew every month on a car I wouldn't own... Tbf it was madness, so opted for the more reasonable company car with everything paid for, but when I look around me this is simply what people do, they wanna drive nice motors and unless you're earning proper money, they're paying through the nose for the privilege of looking good to the neighbours

use that money you didnt spend to buy a house to rent out to tenants and thank me later..

 

[Nico_D]

"Bad financial decisions"? I'd call that more than that. You don't have money to buy things because of mortgage and student loans so you use credit cards to buy the shit you actually can't afford and plan to pay it "as you go". No plan, just "as you go"?

Impressive. That's a new high - or low. Maybe both.

 

[StreetsofBeige]

This is so true, especially around where I live which is a nice area and everyone drives nice big cars, my company car is getting replaced this August and the company offered me a car allowance so I could pick my own motor, so I looked at getting a nice big sporty Audi and when my wife seen the figures I'd be dropping on the Audi a month she told me to take a wise and put the kaboosh on that dream lol it was nearly a mortgage blew every month on a car I wouldn't own... Tbf it was madness, so opted for the more reasonable company car with everything paid for, but when I look around me this is simply what people do, they wanna drive nice motors and unless you're earning proper money, they're paying through the nose for the privilege of looking good to the neighbours

Yup.

Look at every office parking lot. The people with better jobs always skew to better cars. Hey, I admit I got a nice car too. But I can afford it. And it was my first high end car I've ever owned. But not everyone can. It's just a matter of guessing who can and who cant.

And for the people who drive nice cars and who get the car allowance of $900/mth to put towards a car, you'll notice they'll all sit with each other at some point talking cars and who has what and what kind of car is a good one to get. The person asking for advice with a bunch of money in their pocket typically isnt aiming for a Honda Accord, and his peers giving advice arent going to be recommending that either.

It'll be more like, "Hey bud, if you wanna get a Mercedes, I can give you the number of the guy where I got mine from".

So it becomes a game of matching peers or surpassing them.

 

[sono]

Charles Dickens had good advice

https://www.goodreads.com/quotes/90...-annual-expenditure-nineteen-nineteen-and-six

 

[AJUMP23]

College loans, gotta love how college tuition and books have gone up over the years.

I've seen other graphs that go back to the 80s and it's even worse, people could pay for college on a part time job back then.

Forget those university prices.

 

[LarsQMorient]

So true.

Getting a masters is literally just getting a check mark on a resume, as well as some networking which is true. Made some good friends out of it too. But content wise it was a laugh.

It made no sense either. It's an MBA (Masters of Business Administration). Why are there people in my class with zero business work and education experience? Oh, let me guess. The tuition was big so it's a money grab.

If I applied to get into some chemistry or engineering masters program, would I get in with a business background? lol

Some CS master's degrees don't require a CS or engineering background.

 

[flying_sq]

I've owned cars over the $500k mark and let me tell you - dudes in that category of wealth rarely started out rich, myself included ! I always say the car loan thing is the worst situation to be in because cars are mostly depreciating assets unless you know what you are doing. For the average minimum wage or middle class salary worker, car payments and maintenance is the single largest expense blocking them from being wealthy via investing.

My first car was a 1995 toyota with 229,000 miles on the clock. I added another 50,000 over 6 years of ownership before it finally died. The money saved during that period alone was the seed money that would eventually start my business, and ultimately became the money I bought my Pista with.

People's main problem when it comes to personal finance is the inability to live within their means because they want to look wealthier than they are. Their peers opinion of them is more important than sleeping at night, while everything is borrowed and loaned.

I have lived both sides of the fence - when I was completely broke and homeless a $5 from a stranger could mean the difference between eating and starving for a whole week on the streets. I learned how to make money go a long way and how to buy things with value for less than they were worth, which set me up for later life.

If you don't mind me asking, what kind of business are you in? I have been thinking of starting my own for a fair amount of reasons, my friend started his own CPA firm and is doing pretty well. He keeps telling me to start my own business, but I'm concerned about viability. I am in network engineering/medical. From what other people tell me I am pretty good at what I do, but I have my own reservations about jumping into a saturated tech market.

 

[Nobody_Important]

 

[Fools idol]

If you don't mind me asking, what kind of business are you in? I have been thinking of starting my own for a fair amount of reasons, my friend started his own CPA firm and is doing pretty well. He keeps telling me to start my own business, but I'm concerned about viability. I am in network engineering/medical. From what other people tell me I am pretty good at what I do, but I have my own reservations about jumping into a saturated tech market.

Software - specifically, custom algorithm design and occasionally interface design.

It was very lucrative during the smartphone boom. I sold up years ago for 8 figures

 

[Trogdor1123]

Interesting reading all the comments about mbas here. I have had mine for nearly a decade now and has don’t fantastic things for me. Salary has over doubled due a career move and interviews come easier.

My school was also very competitive, I saw several folks fail and get kicked out. Several threshold courses got them.

 

[Shodai]

They make $230,000 a year and only have like $200,000 in short term high interest debt (i.e non mortgage and student loans). Stopping their bullshit spending and gross waste would pay off their actual "debt" in like a couple years. Nearly everyone has sky high mortgages and student loans, and 95% of them don't earn anywhere near $250,000 a year, so she's already infinitely better off than pretty much everyone. They bring home like $12,000 cash every single month. Their mortgage and student loan payments combined would be under $5,000 even if their SL's a 10 year term. Meaning they're burning far more than $7,000 cash every single month on food, groceries, and luxuries.

They most definitely do not clear that much cash. If they have any kind of 401k or other pre/post tax deductions, they are probably bringing closer to $8-9k a month after taxes. If you factor in mortgage, cars, student loans, and interest payments on their CC's, they are in serious pain short of literally doing nothing but paying bills.

 

[Haint]

They most definitely do not clear that much cash. If they have any kind of 401k or other pre/post tax deductions, they are probably bringing closer to $8-9k a month after taxes. If you factor in mortgage, cars, student loans, and interest payments on their CC's, they are in serious pain short of literally doing nothing but paying bills.

"If they're investing $44,000 of their salary every year they're in serious pain" is quite the rebuttal.

 

[TGO]

Today's credit agreements are so easy compared to the 2000's, you really have to try hard to get into debt.
The person having a MBA doesn't mean everything either.
What I've noticed a lot with the younger generation is they knowledge with what they've been taught, but lack common sense.
Like they say, knowledge and intelligence are two different things.