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I'm not buying a car or house, because I'm still in college and I make $9/hr. Simple enough.
To expand further on my general situation, I attended community college for two years before transferring to a cheap in-state public college. When I graduate, I'll have about $20,000 in debt. Manageable, but honestly, the figure still frightens me. My first priority will be paying off this debt as quickly as possible. Clearly having a shiny new car won't be a priority then, even if I'm fortunate enough to land a decent paying job (obviously that isn't a guarantee in today's economy). My beater may not look pretty, but I got a really good deal on it ($1,500 at 64K) and I'll drive the thing into the ground. Purchasing a brand new car makes no financial sense considering the value plummets once one drives it off the lot.
Housing? A modest home in the future would be nice, but all I need is a roof over my head and four walls surrounding me. Renting a small apartment should meet my needs. I also hate commuting, so I'll sacrifice some grass and privacy for the convenience of being closer to work. Financially, I'm not sure how much sense it would make to purchase a home in this area due to the property taxes. Not to mention there's no such thing as job security now days (with a few exceptions).
Purchasing a brand new car makes no financial sense considering the value plummets once one drives it off the lot.
True and False.
True: Value plummets
False: makes no financial sense
If you buy a lower end model (under $25k) and keep it for 6 years, putting on 80,000 miles, you will be generally in the range of someone who bought a 10 year old car for $5,000.
How you ask?
My car was $23k OTD and has a 100,000 mile warranty on the power train.
Maintenance for 80k miles:
2 sets of tires: $800
13 oil changes: $400
General Maintenance: $400
Total: $1600
Resell at 80,000 miles -- $7,000
Total cost of car
$17,600
10 year old car:
New timing belt : $1000
3 sets of tires (assuming not brand new when purchased: 1200
13 oil changes: 400
Repairs $6000 (springs, shocks, alignment, muffler, electronics, starter, battery etc)
Total cost $8,600
Reselling car at 170,000 miles: $1000
Total cost $12,600
So yes, a brand new car would cost $5,000 more... But it's brand new and not 10 years old. It's going to be more reliable with new technology, be safer, and probably ride nicer. Might even be better on gas mileage too. I know my old 97' Camry 2.2L 4 cyc would get 21 city and 28 hwy when I got it with 120,000 miles on it. Now a days, the new camrys get 27 city and 35 highway, which over 80,000 miles would amount to a fuel savings of about $2,700 at current fuel prices, cutting the cost of a new car to only $2,300 more.
IMO, I think the passage of time will reveal this generation, which at 30 I am nearly a part of, will show themselves to have an extreme aversion to debt...The benefits of homeownership will matter little to a generation that feels so insecure about its future.
Bingo. How can you just assume that you'll be able to pay off some large, long term debt when you have no, and I mean absolutely zero, job security? When you know that if you lose this job, you could be forced into lower paying work, assuming you are able to get a job? And then the only way you know to get a better job, besides going into the underground market, is to go into or deeper into debt then...jeeze.
The lack of an ability to rely on future wages to pay current debt does put a damper on the credit party.
For me, it is far, far cheaper to rent the house I live in than buy it. I think that worries my leading edge Boomer neighbors who plan on cashing out their houses in a few years to seriously downsize. I think many of them have never shook the fact that the housing bubble is over emotionally. They all came from places with enormous bubbles and cashed out at the right time out of luck and ignorance, not because they knew it was unsustainable. Hard to deal with the fact that those times are dead and gone and what they have may not be worth what they want to believe it does. Particularly in my locale where there are nothing but distressed vacation and retirement homes as far as the eye can see.
Yeah, and I have tried to explain it to you fruits and nuts on the coasts with your stupid tax policy. Prop 13 was real brilliant. Am I supposed to feel a swell of pity for those that self flagellated their economy ? Its the same policy as revolutionary France.
Prop 13 applies to all taxable real property in the State...
Prop 13 didn't come about in a vacuum... there were two huge underlying factors... double digit year over year property tax increases and the State taking control of local education tax dollars... plus a string of corruption cases with one assessor committing suicide and others going to prison... Prop 13 is very simple, taking only a couple of paragraphs...
Prop 13 is responsible for many buying homes today... the prices are down and since Prop 13 is a tax based on acquisition price plus voter approve assessments... buying when prices are down is a win.
I've been looking to sell my home and buy my replacement in the same area... I bought at the peak and those buying today are paying 30% less for comparable property.
So yes... some twenty somethings are buying...
I posted before about a young couple... both under 25 and both the first from their families to graduate college... she is a Registered Nurse and he is a Berkeley Police Officer and they bought a nice home and are expecting their first child... they also make close to 200k a year... not bad for being under 25...
If you buy a lower end model (under $25k) and keep it for 6 years, putting on 80,000 miles, you will be generally in the range of someone who bought a 10 year old car for $5,000.
How you ask?
My car was $23k OTD and has a 100,000 mile warranty on the power train.
Maintenance for 80k miles:
2 sets of tires: $800
13 oil changes: $400
General Maintenance: $400
Total: $1600
Resell at 80,000 miles -- $7,000
Total cost of car
$17,600
10 year old car:
New timing belt : $1000
3 sets of tires (assuming not brand new when purchased: 1200
13 oil changes: 400
Repairs $6000 (springs, shocks, alignment, muffler, electronics, starter, battery etc)
Total cost $8,600
Reselling car at 170,000 miles: $1000
Total cost $12,600
So yes, a brand new car would cost $5,000 more... But it's brand new and not 10 years old. It's going to be more reliable with new technology, be safer, and probably ride nicer. Might even be better on gas mileage too. I know my old 97' Camry 2.2L 4 cyc would get 21 city and 28 hwy when I got it with 120,000 miles on it. Now a days, the new camrys get 27 city and 35 highway, which over 80,000 miles would amount to a fuel savings of about $2,700 at current fuel prices, cutting the cost of a new car to only $2,300 more.
Pretty negligible expense over a 6-8 year period.
Sorry, but your numbers of the used car are unrealistic. I buy even cheaper cars and spend nowhere near $7,000 on repairs:10 years...
I think that worries my leading edge Boomer neighbors who plan on cashing out their houses in a few years to seriously downsize. I think many of them have never shook the fact that the housing bubble is over emotionally. They all came from places with enormous bubbles and cashed out at the right time out of luck and ignorance, not because they knew it was unsustainable. Hard to deal with the fact that those times are dead and gone and what they have may not be worth what they want to believe it does. Particularly in my locale where there are nothing but distressed vacation and retirement homes as far as the eye can see.
Yep. Leading edge Boomers (heck, all Boomers, for that matter) who counted on inflated home values as a major compenent of their retirement made a very serious mis-calculation. A lot of them will be increasingly frustrated as the years roll by and only a very modest recovery of values occurs rather than the return to insane values that they are hoping for. Oops - frugality in retirement will be forced on them despite all their whining and complaining. By the way, I am 68, but I don't mind criticizing my own generation.
Why live there to become their peasantry? Unless you buy assets to get some of the rent capture, you are a slave.
It's called a career. I have one here, getting a job in my industry, selling my condo, moving across the country...not exactly realistic there.
Quote:
Originally Posted by gwynedd1
Yeah, and I have tried to explain it to you fruits and nuts on the coasts with your stupid tax policy. Prop 13 was real brilliant. Am I supposed to feel a swell of pity for those that self flagellated their economy ? Its the same policy as revolutionary France.
Why do you feel the need to insult everyone in the country's most important economic states?
California and New York are the lifeblood of the economy. The Midwest is nothing in comparison to those two places. Without the "fruits and nuts", you wouldn't just be without Pharmaceuticals, Computers, Venture Capital, Banking, Entertainment...you'd be without fruits and nuts! California is the actual breadbasket of America...
Quote:
Originally Posted by Ohiogirl81
You have two choices: Move, or stop complaining.
You see, I have this thing called a job. As you've so brilliantly pointed out on these threads, jobs aren't exactly in abundance, so how would you expect someone to move when there's nothing to move for? Plus, I'm not complaining, I'm pointing out that you people in the cheap parts of the country have no reason to complain because your lives are vastly easier. Our COL is significantly higher.
Plus, you really don't have to be so condescending, especially when you really have no reason to be so, it's not like you're better than us in any way.
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