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Message
if you were a 23, what would you do with 30k in the bank?
Posted on 7/28/12 at 5:42 pm
Posted on 7/28/12 at 5:42 pm
My buddy has a pretty good job,and has managed to save $30,000 his first year working by living at home and not making any major purchases. He is going to try to live at home for another year then buy a 200k house.
So I ask the question what would the MB do with 30K at 23 years old? Do you think my friend is making a smart financial move?
So I ask the question what would the MB do with 30K at 23 years old? Do you think my friend is making a smart financial move?
Posted on 7/28/12 at 5:52 pm to deathvalley504
Your friend huh? Why don't you tell your "friend"to put that toward a down payment on his house. He isn't stable enough to get into the market.
Posted on 7/28/12 at 5:54 pm to deathvalley504
Why does he want to buy a house?
Posted on 7/28/12 at 6:59 pm to deathvalley504
Easy answer...hookers and blow.
But the equity position in a home isn't a bad idea either.
But the equity position in a home isn't a bad idea either.
Posted on 7/28/12 at 7:04 pm to deathvalley504
Well at 23, I made a down payment on my house with 30K. He should save it for his down payment
Posted on 7/28/12 at 7:23 pm to deathvalley504
quote:
He is going to try to live at home for another year then buy a 200k house.
Why the frick would a 24 yr old dude buy a house???? I've never understood this. Invest it, save it. And for the love of god grow up and move out of your parents house into an apartment and have a good time as a young single dude with some cash in the bank. Damn.
Posted on 7/28/12 at 7:50 pm to deathvalley504
move out of your momma's house
Posted on 7/28/12 at 10:46 pm to deathvalley504
Being this young and just starting a career, he has no idea where life might take him. I would hate to be tied down to a house if a good opportunity came up
Posted on 7/28/12 at 11:25 pm to deathvalley504
Vegas, baby. Have a weekend you'll remember the rest of your life.
Posted on 7/29/12 at 7:44 am to deathvalley504
My advice would be to not worry about buying now. What if your company offered a promotion/significant raise if you moved to another city? You don't want to have to worry about having to sell a house, and any minuscule amount that you may have saved by "not throwing money away on rent" would be eaten up by the real estate fees when selling.
Now is the time to travel and have fun. I'm not advocating going into debt, but spend some money on yourself. You will not have the time to do this once you are married with kids. If I could go back in time, I'd give up 20k of money today to give myself 10k at age 23 to have fun/travel. With the amount you have, I would max out my 401k now (16k/year), max out Roth IRA (5k/year).
Now is the time to travel and have fun. I'm not advocating going into debt, but spend some money on yourself. You will not have the time to do this once you are married with kids. If I could go back in time, I'd give up 20k of money today to give myself 10k at age 23 to have fun/travel. With the amount you have, I would max out my 401k now (16k/year), max out Roth IRA (5k/year).
Posted on 7/29/12 at 9:42 am to deathvalley504
down payment on a Cobalt
Posted on 7/29/12 at 2:40 pm to deathvalley504
quote:
So I ask the question what would the MB do with 30K at 23 years old? Do you think my friend is making a smart financial move?
If he plans to live in the house long enough, it makes sense. But he'll need to be there long enough so insurance costs, taxes, repairs, home acquisition costs, and selling costs are less than what he would've spent on rent. Owning a home makes sense if 1. you'll be there a long time so the cost per month over a long time is small 2.the house is very cheap and below market value so he'll easily more than cover those costs or 3. the preoperty is in an area where quick appreciation is probable and thus over a couple years his sales price will probably make a significant profit on it.
The decision should be based on what his goals with the house are; I think when young and single, 401k & IRAs are the best options since it'll be tougher when you have a family.
Posted on 7/30/12 at 12:36 am to deathvalley504
At 25, I had 6k in the bank each month. Lived at home with my Dad. I worked days. He worked nights.
I destroyed a shite-ton of arse, did a large amount of controlled substances, scratched bucket list items off before I knew what a bucket list was, and generally completely pissed it away living the ever-living frick out one very interesting life.
I also learned a lot and worked my arse off and realized when you're motivated-by money or whatever-working your arse off doesn't feel like working at all.
Got out of that line of work, and then I undertook a sort've penance for going that balls out that fast. Taught myself other lessons-the kind only struggling can truly make you learn.
Grew the frick up in the process.
Tell him to live his life and enjoy himself. Experience will be the best teacher. Good or bad. Not any financial advisor or post here on the MT.
A 200K house at 23 sounds stupid though.
I destroyed a shite-ton of arse, did a large amount of controlled substances, scratched bucket list items off before I knew what a bucket list was, and generally completely pissed it away living the ever-living frick out one very interesting life.
I also learned a lot and worked my arse off and realized when you're motivated-by money or whatever-working your arse off doesn't feel like working at all.
Got out of that line of work, and then I undertook a sort've penance for going that balls out that fast. Taught myself other lessons-the kind only struggling can truly make you learn.
Grew the frick up in the process.
Tell him to live his life and enjoy himself. Experience will be the best teacher. Good or bad. Not any financial advisor or post here on the MT.
A 200K house at 23 sounds stupid though.
Posted on 7/30/12 at 12:29 pm to deathvalley504
Only buy a house if it is undervalued and you are confident that you can sell it for at least 10% above your buying price whenever you think you will want to dish it. As someone said earlier, you will prob losts 10% of the sale price on the back end due to realtor/closing costs.
On the front end in purchasing there are alot of hidden costs most people don't think of (prepaid insurance for the year/inspections etc) so make sure you give youself alot of room and also look up the typical tax bills for the property. Make sure to factor in insurance and taxes (flood and homeowners). A $800 mortgage can turn into $1,200 a month in costs pretty quickly (insurance + taxes + homeowner assoc fees if it is a condo).
Do the math and make sure your return will beat whatever else you think you can do with the money (invest it in stocks, with a friend who has a business, in buying a car cash so you don't have 5% interest rate etc). If the gain on buying the house wins, go for it. Don't just buy one to buy one. It could be disastrous if it isn't the type of property you could dish if you need to or property in the area declines etc.
On the front end in purchasing there are alot of hidden costs most people don't think of (prepaid insurance for the year/inspections etc) so make sure you give youself alot of room and also look up the typical tax bills for the property. Make sure to factor in insurance and taxes (flood and homeowners). A $800 mortgage can turn into $1,200 a month in costs pretty quickly (insurance + taxes + homeowner assoc fees if it is a condo).
Do the math and make sure your return will beat whatever else you think you can do with the money (invest it in stocks, with a friend who has a business, in buying a car cash so you don't have 5% interest rate etc). If the gain on buying the house wins, go for it. Don't just buy one to buy one. It could be disastrous if it isn't the type of property you could dish if you need to or property in the area declines etc.
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