Car Loans - keeping America poor?

[MountainTracker]

I’m all about paying cash for a vehicle and I’m ok with a new used vehicle.

Car payments are going to be one of the biggest things that keep folks from reaching financial goals.


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[Speaks]

I want to take partial credit for you starting this thread on what I have to assume was based on my post in the mortgage thread.

I’ll make another speculation (new thread?) Another major expense that many pay for is repairs. I’ll loop in auto, house, etc.

Many can be done for a fraction (1/4-1/8) the cost doing it yourself. Most of my poor friends also do none of their own repairs. It adds up very fast.

YouTube empowers semi handy folks to get after it. I will say time, tools, and mistakes are a big factor (but all improve with attempts!).

I’d speculate I save close to $5k a year on my house and auto repairs doing most myself (more $ for savings!).

I used to wrench on my trucks, but in the end I can make at least 2x on my laptop for the amount of time the repair would take me as it would cost me to pay someone to do it.

I will do most home repairs as the inconvenience of having repair guys in my home during the workday hits me both on the cost of repair and lost productivity side. But drop the truck off grab a rental 100% is more cost effective than doing it myself.

 

[TheWhitetailNut]

I want to take partial credit for you starting this thread on what I have to assume was based on my post in the mortgage thread.

I’ll make another speculation (new thread?) Another major expense that many pay for is repairs. I’ll loop in auto, house, etc.

Many can be done for a fraction (1/4-1/8) the cost doing it yourself. Most of my poor friends also do none of their own repairs. It adds up very fast.

YouTube empowers semi handy folks to get after it. I will say time, tools, and mistakes are a big factor (but all improve with attempts!).

I’d speculate I save close to $5k a year on my house and auto repairs doing most myself (more $ for savings!).

There are a number of things folks can and should do around the house. As a multi trade contractor in thousand of homes a year we can tell who did. All those guys bragging about how much money they saved have homes full of major defects when it comes time to sell. 99% of guys can't install a water heater on their own, 95% of the guys that do did it wrong. The lack of skill among men today is very consistent, the ability to recognize their own limitations is another thing. Multiply by 30 if they are an Engineer. Those guys homes are almost universally in decay.

 

[WV Mountaineer]

When a car is that old replacing door handles and window cranks can be necessary, because they can wear out and break. You can’t simply maintain a 60’s car by only changing the fluids, spark plugs, belts, hoses, brakes, tires etc. Parts are deteriorating, failing, and wearing out.

Growing up, we always used vice grips on the window cranks. Served multiple purposes when you broke down too.

You’d better believe there’s a lot of truth to that.

 

[Predator_SD]

When I bought my $35k bass boat and they were trying to talk me into financing they had a 30 year option. If I remember correctly I did 2 year at just under 2%.

30 years on $35K, WOW!!!!

 

[Reburn]

There are a number of things folks can and should do around the house. As a multi trade contractor in thousand of homes a year we can tell who did. All those guys bragging about how much money they saved have homes full of major defects when it comes time to sell. 99% of guys can't install a water heater on their own, 95% of the guys that do did it wrong. The lack of skill among men today is very consistent, the ability to recognize their own limitations is another thing. Multiply by 30 if they are an Engineer. Those guys homes are almost universally in decay.

 

[Predator_SD]

There are a number of things folks can and should do around the house. As a multi trade contractor in thousand of homes a year we can tell who did. All those guys bragging about how much money they saved have homes full of major defects when it comes time to sell. 99% of guys can't install a water heater on their own, 95% of the guys that do did it wrong. The lack of skill among men today is very consistent, the ability to recognize their own limitations is another thing. Multiply by 30 if they are an Engineer. Those guys homes are almost universally in decay.

Come on man, 95%? It can’t be that high unless you’re servicing more urban areas like Chicago or something. Most guys willing to DIY are more than capable of doing a simple job like a water heater, install a receptacle, build a wall in the basement, do their brakes, etc. This stuff isn’t rocket science it’s pretty simple. Someone incapable of installing a water heater calls someone to do all their work 99% of the time. My Chicago brother in law can’t change a light bulb. I fixed his flapper valve in 2 min on his toilet he let continually run for 6 months before i noticed it when i was over and asked him about it. He didn’t know how to get inside the toilet tank to check anything, not joking.

Not saying you don’t see shoddy work but to say 95% doing work don’t know what they’re doing is a stretch. On the flip side, i have come in behind work done by contractors talk about shoddy work!

 

[TSAMP]

There are a number of things folks can and should do around the house. As a multi trade contractor in thousand of homes a year we can tell who did. All those guys bragging about how much money they saved have homes full of major defects when it comes time to sell. 99% of guys can't install a water heater on their own, 95% of the guys that do did it wrong. The lack of skill among men today is very consistent, the ability to recognize their own limitations is another thing. Multiply by 30 if they are an Engineer. Those guys homes are almost universally in decay.

Am an engineer. This may check out.

The tough part with home repair is sometimes it can be done wrong, and still technically work. Thats why us engineers have issues i suspect.

My issue is my talent happens to be below my standards in most cases. You should see my carpentry projects. God awful even though I cut every board to 1/16"

 

[Reburn]

Come on man, 95%? It can’t be that high unless you’re servicing more urban areas like Chicago or something. Most guys willing to DIY are more than capable of doing a simple job like a water heater, install a receptacle, build a wall in the basement, do their brakes, etc. This stuff isn’t rocket science it’s pretty simple. Someone incapable of installing a water heater calls someone to do all their work 99% of the time. My Chicago brother in law can’t change a light bulb. I fixed his flapper valve in 2 min on his toilet he let continually run for 6 months before i noticed it when i was over and asked him about it. He didn’t know how to get inside the toilet tank to check anything, not joking.

Not saying you don’t see shoddy work but to say 95% doing work don’t know what they’re doing is a stretch. On the flip side, i have come in behind work done by contractors talk about shoddy work!

Tell me how you watched HGTV and think you know how to do glass tile by yourself so you can remodel houses and try to flip it without telling me. (I didnt do this the house came this way)

 

[go_deep]

Am an engineer. This may check out.

The tough part with home repair is sometimes it can be done wrong, and still technically work. Thats why us engineers have issues i suspect.

My issue is my talent happens to be below my standards in most cases. You should see my carpentry projects. God awful even though I cut every board to 1/16"

So if you build a 10' deck you use 160 1/16" length boards? Come on man! Lol

 

[TSAMP]

So if you build a 10' deck you use 160 1/16" length boards? Come on man! Lol

Oh you just wait till I find the picture of my attempt at a pigeon box

 

[dtrkyman]

I have never had a car payment in my life!

I know not everyone can pull that off but that is my strategy.

I have also only ever bought one new vehicle. Driving it now, bought it in March of 2014, currently has 231k on it, no major repairs and only left me stranded once! Probably drive it till it gives up the ghost!

Hope to make 300k


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[dtrkyman]

I have never had a car payment in my life!

I know not everyone can pull that off but that is my strategy.

I have also only ever bought one new vehicle. Driving it now, bought it in March of 2014, currently has 231k on it, no major repairs and only left me stranded once! Probably drive it till it gives up the ghost!

Hope to make 300k


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[ddowning]

WHAT? $180k is roughly the top 5-6% of Americans. I live on less than that now and do make 7 figures. The hardest thing in consulting is to get clients to accept is you cannot out earn a spending problem. There is no amount of money a motivated person cannot piss away.

Half the post is in jest. Yes, $180k is a lot when compared to what the average American makes. Compare the salary for similar jobs from the 1990s and it's obvious that the purchasing power of a good job is not what ot used to be. People have this belief that when you make $XXX,XXX OR $X,XXX,XXX you are loaded and can do whatever you want. Yes, I could buy a lot of "stuff" on what I make. I would be broke. I live on way less than what I make.

A couple guys that I do business with drag down 7 figures but run their businesses on a line of credit. They don't need the line of credit and the interest rate is high enough that the investments would have to be somewhat risky to beat it by even 1 or 2%. They do it because they like to spend money and are one month behind forever. The don't want to stop buying "stuff" in order to catch up, so they just keep going. They know there is another $100k in profit coming next month as long as they keep working. It's not like they are extremely irresponsible. They are investing in retirement as they should be, etc. It just seems foolish to chop 8% off the bottom line vs stop buying shit for a few months to get cash ahead and put it in your pocket.

Also, the part that wasn't in jest: those guys have a lifestyle that I would consider a step up from mine. Not 2 steps or 10, but one. I live a lifestyle that is one step above abject poverty. I do more of the same things I did when taking home $34k/year before starting a business. The stuff I use to do it is nicer, the paid off used vehicles I drive are a little nicer, I pay a mechanic to work on them, and I don't worry about where my next meal is coming from. I also now have barely adequate retirement savings after catching up from barely making ends meet for a long time.

To live a lifestyle that is another step up, in my opinion, I would need to make 2 or 3X what I make now with a family of 4. If I tried to afford that lifestyle on what I make now, I would be broke. Also, I am worried that they will keep printing money, and the amount I need for my wife and I to retire will be several times the $1M my financial advisor tells me is the minimum.

The point is, making low 6 figures might be a lot compared to the average income in America. Because of that, people think you can live a lavish life on $100k. If you try to do that, and are not single, you will be broke, probably even very upside down. The spending power of "a good wage/salary" is nowhere near what it used to be. "A lot of money" is not a lot of money anymore. Economic policy, the peddling of bad financial norms and no financial education have turned the average wage/salary earning American into debt slaves. People still think you can earn these salaries low 6 figure salaries and live an upper middle class lifestyle. That upper middle class lifestyle costs so much more today that you need to make a shitload to live like that and invest heavily in the future. Without heavy investment in appreciating assets, inflation is going to overtake both your salary, and your savings. If the trend continues, America is in deep shit.

In my opinion, people have been brainwashed into thinking x amount is a lot of money when, in fact, the purchasing power of that amount is very little now. They don't see what it really takes and are slaves to the financial system. Carrying car loans that aren't low interest are a great example of the way people are using debt to live a lifestyle above what they earn. It is not leverage if it is not making you money. To really live a lavish lifestyle takes a shitload of money as you have demonstrated. You are clearly in financial management as a career, and you live on less than 20% of your income (probably way less if you make much into 7 figures). It is really disheartening to see people that make a couple hundred thousand a year unable to cover $10-20k in emergencies when you can structure your life to do that on $50k/year or even less in my area of the country. When I hear people project that so and so is rich because they make over $100k/year, to me that shows a complete lack of financial understanding.

 

[TSAMP]

Man. The threads a little off and I'm probably going to make it worse. But this illustration came up and made me think of this thread.

 

[ddowning]

Yeah…$30k a month is definitely life changing. I’d pay off my house and retire in about 5 years of that.

Yeah, you could do that. Then what? I'm not sure how old you are, but what are you going to do with the rest of your life? I used to think the same thing. Will you or your wife buy some of the things you always longed for if you make more money? A lot of things are nice, but when you have them, you realize they are not life changing. Yes, the money is there to pay off the house, but why would we at 3.5%.

I'm going to shut-up and stop typing, my perception of this shit when I was making less money wasn't good. It sounds like whining. Maybe the best way to put it is this: I challenge you to go make $30k/month and decide for yourself if you are filthy rich. That is not to say that most people can't earn that kind of money. I'm a huge believer in what one man can do, so can another. I'm just an average dumb ass that made the right moves at the right time. I don't have anything special that anyone else doesn't. I always thought at a certain amount of money a guy would feel different. That might be the case, but I sure haven't gotten there yet, even after multiplying my earnings several times. That is my point.

The guy above (maybe below, not sure what order I responded in)makes 7 figures and lives on low 6 figures. The money didn't change him either. I'm trying to shine some light on the perception of what is a lot of money. Feeling comfortable that you are not broke is one thing. Feeling like you can buy whatever you want is a completely different world. The difference between the two is an exponential amount of money.

Pertaining to this thread, car loans are either low interest (investment tool), or you are outliving your means (normal interest). There is no reason to have a normal interest car loan unless you cannot afford a used car without one. At that point, it is a necessity to work and earn. At some point you have to out-earn that situation to get ahead.

 

[Predator_SD]

Tell me how you watched HGTV and think you know how to do glass tile by yourself so you can remodel and house and try to flip it without telling me. (I didnt do this the house came this way)

View attachment 871580

Hello McFly……where did i say there are NEVER slobs trying to do work? I said it’s not “95% have no idea”.

BTW…..that looks like contractor work to me.

 

[ShootOkHuntWorse]

Hello McFly……where did i say there are NEVER slobs trying to do work? I said it’s not “95% have no idea”.

BTW…..that looks like contractor work to me.

I was gunna say it looks just like all the houses in cookie cutter neighborhoods being built 5 at a time every day. My house looks like dog shit when you look closely.

 

[go_deep]

Man. The threads a little off and I'm probably going to make it worse. But this illustration came up and made me think of this thread.

We have a neighbor who complains about how it's a break even on one of their salaries for daycare.
I have very pointedly asked them why they would go work and pay someone else to raise their kids for a break even. I don't want to give up my career they say....
I have pointed out my wife was a stay at home Mom for 12 years, it ended up saving us more money than we ever thought, we raised our own kids, and now my wife had a great job.
People priorities the damn dumbest things over their family.

 

[Predator_SD]

I was gunna say it looks just like all the houses in cookie cutter neighborhoods being built 5 at a time every day. My house looks like dog shit when you look closely.

Yeah man thats why i try to do as much of my own work i can. I am way more meticulous than most of the crews out there just trying to get em up as fast as they can. I don’t trust anyone to do any work on my house or truck anymore sadly. You find someone good you can trust treat em well.