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He's single, has a full-time job (pays $25k-$30k a year), and wants to live in a town house which costs about $1300 per month around here.
So with that job and $100k he has saved up, how long could it last? If he's frugal with his money I mean.
All else being equal $1300 is high for a $25K-30K salary, probably about 2/3 or so of his home pay. As others have said, really depends on a lot of things (a car payment probably being the biggest and most likely) but I suppose it's not that unlikely to not have to dip into the $100K. Be tough to save anything additional though.
Thanks for all the replies.
He's single, has a full-time job (pays $25k-$30k a year), and wants to live in a town house which costs about $1300 per month around here.
So, why doesn't he BUY that townhouse?? Or, a different property? This is the best chance he'd get, for a while... with a nice round 100K saved up.
Doesn't matter if buying outright, or with mortgage, using those savings for a huge down payment - he CAN. I think he SHOULD!
If he's smart, he won't spend any of it. If not...well...
Quote:
Originally Posted by Larry Siegel
Seriously, he'd better spend some of it. He doesn't have a place to live, and rent isn't free. (Continuing to mooch is not an option.)
C'mon. Since he managed to save up $100,000, it's obvious that he's been working. As long as he doesn't quit his job, he should be able to remain thrifty and keep the $100K as the start of a nice retirement account. Another viable option would be to use some or all of that amount to buy a place to live so he doesn't have to pay rent...but that needs to be a personal decision based upon all of the financial factors that only he can determine. Buying a house isn't for everyone, but it sure as heck can be a good investment under some circumstances.
He's single, has a full-time job (pays $25k-$30k a year), and wants to live in a town house which costs about $1300 per month around here.
So with that job and $100k he has saved up, how long could it last? If he's frugal with his money I mean.
Let's say he makes $2000 a month but $1500 after taxes. He's work since 18, so 10 years. He's saved $10,000 a year or $800 a month. So he is spending $700 a month. Add $1300 to that normal $700 month in spending and he is spending $2000 a month while making only $1500. If you lose $500 a month, but make 4% a year on your savings, he'd lose $2,000 a year. So his $100,000 will last 50 years.
Will he continue to eat and do laundry at and watch TV at your parents house?
Quote:
Originally Posted by David Aguilar
With $100K, I'm buying a $100K house somewhere and not bothering with rent.
Buy it, rent it out and essentially increase his income 50%.
At current savings rate and new rental income, should get his $100,000 back in 5 years.
Buy it, rent it out and essentially increase his income 50%.
At current savings rate and new rental income, should get his $100,000 back in 5 years.
Or
-buy it, live in it, instead of paying rent, pay rent to yourself in a savings account.
-in some parts of the country, you can buy a $50K house and rent it out for $700-$800/mo. Buy two of them, live in one, rent the other, or rent both.
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