14 Millennials Got Honest About How They Afforded Homeownership (rental, loan, repairs)
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My point is that some young people I see struggling with student debt are not "struggling" at all to pay for their new Silverado. Used cars, just a few years old, are highly reliable and a great bargain. Buy one of those.
Young people generally can come up with $250/month, reliably demanded. They do NOT have $5000 upfront AND up to $2000/year in repairs.
There's a middle ground in there. You can finance a $5,000 car for $100/month and still have plenty of cash flow for any repairs. And those repairs are not going to be $2,000 a year.
Even $5,000 is more than is really necessary for a simple "A to B" car for a single person.
I don't get why people are mad that these millennials are being honest and some have said they have gotten help. People have been getting help for centuries to buy properties.
I don't get why people are mad that these millennials are being honest and some have said they have gotten help. People have been getting help for centuries to buy properties.
My point is that some young people I see struggling with student debt are not "struggling" at all to pay for their new Silverado. Used cars, just a few years old, are highly reliable and a great bargain. Buy one of those.
Those "a few years old" cars are not a great bargain. They are often without warranty and only marginally less expensive than new, which often offer 0% financing or $99/mo. leases with nothing or next to nothing down, if they time it right.
And the newer cars just don't last like the old ones did. They are not highly reliable.
There's a middle ground in there. You can finance a $5,000 car for $100/month and still have plenty of cash flow for any repairs. And those repairs are not going to be $2,000 a year.
Even $5,000 is more than is really necessary for a simple "A to B" car for a single person.
That's "years ago" talking... a $5K auto loan will be for a car that's about 10 years old. A standard, not-great-credit (because HOLY EFFING DEBT-TO-INCOME RATIO for those student loans, at the very least) "kid" might get about 13% interest. The term will be maybe 2 years... credit isn't easy like it used to be. That's just shy of $250/mo.
For a car that will need repairs, keep you from your low-paying job, get you fired when you're floundering for transportation to work AGAIN...
A cheaper new car, with a full warranty, is slightly more in payments if you buy... and a lease is often far less.
I became an adult in 2001. I had no problems getting long-term, low-interest loans to buy reliable vehicles. My car payment was $87/mo. It was a pittance.
That doesn't happen for most young adults now. Older people tend to have better options available to them. Older friends of mine with similar incomes (and many with a worse credit history) have long-standing credit lines of $25K+ on incomes similar to mine... I'm younger... they got those deals and were grandfathered in... I wasn't. I'm stuck at a third of that. My younger siblings are stuck at a third of mine for their age and similar incomes. That's just how it is now, unless you've had co-signers to prop you up with them from that previous period or have a wildly-higher income.
Do you want a 2007 Camry for $215/month (let's say they got 3 years instead of 2 OR a slightly-better interest rate), coming up on a litany of costs to keep it passing inspection and maybe lose your garbage-paying job for unreliability, or a 2019 sedan for $257 with a 10 yr/bumper-to-bumper warranty?
Do you want a 2007 Camry for $215/month (let's say they got 3 years instead of 2 OR a slightly-better interest rate), coming up on a litany of costs to keep it passing inspection and maybe lose your garbage-paying job for unreliability, or a 2019 sedan for $257 with a 10 yr/bumper-to-bumper warranty?
That's not a realistic comparison, and you're really exaggerating the numbers.
The 2019 Camry's starting price is $24K. Unless you think they are offering 8 year 0% loans, you're not getting a $257 payment.
$5,000 at 10% interest on a 3 year loan is $161. Compared to $775 for the base price Camry on the same loan terms.
Okay maybe you get a good interest deal: $24K at 2% for 3 years: $687 per month
Maybe they give you a nice 6 year term too, on top of the 2% interest ...it's still $354 a month!
The $5,000 car gets you paid off 3 years sooner and saves you literally thousands of extra dollars per year, which you can easily use to pay for any maintenance.
Terrible example. UPenn is one of the most selective colleges in the world. It will absolutely make a difference going there vs Penn State. That's not to say you don't make a very good point. But, UPenn is one of the schools that is worth it.
UPenn is definitely a good school (being Ivy League and all), but that whole concept of average pay by college is obviously a classic correlation/causation fallacy. Keeping everything else constant, of course the average UPenn grad is probably going to be more successful than the average StateU grad: getting accepted into the Ivy required a higher level of drive and intelligence. It has far less to do with the caliber of school than the caliber of the average student.
In any case, my point was that major choice is far more important. I'll bet money on a much higher career success ($$$ earnings) of a Computer Science graduate from Penn State than a History/Art/fill-in-the-blank Studies grad from UPenn.
This is probably a weakness of my own, but when I review resumes, I don't care much about the University at all - just that there was one.
If you're wondering if a "better education" leads to a better employee...eh, hard to say.
If you do your job well, you'll be paid accordingly. If doing your job well correlates to "finer" universities, then I guess that's that...but I'm pretty sure there's not much of a connection.
So it really is about getting your foot in the door, and from that perspective, it's heavily weighted on the student's end. That is, the student feels pressure to get in a better University (>$$$$) for contacts and a "foot in the door," while, in the long run, the employER cares very little about your pedigree. (On average, I mean - there are certainly exceptions.)
This is way - way -far from the OPs topic. Fun conversation though!
I'm not mad, by the way, that anyone got help pursuing their goals - I'm just annoyed the author feels it's such an impossible road without this help. It's not. Difficult, yes. Impossible? Hardly.
That's not a realistic comparison, and you're really exaggerating the numbers.
The 2019 Camry's starting price is $24K. Unless you think they are offering 8 year 0% loans, you're not getting a $257 payment.
$5,000 at 10% interest on a 3 year loan is $161. Compared to $775 for the base price Camry on the same loan terms.
Okay maybe you get a good interest deal: $24K at 2% for 3 years: $687 per month
Maybe they give you a nice 6 year term too, on top of the 2% interest ...it's still $354 a month!
The $5,000 car gets you paid off 3 years sooner and saves you literally thousands of extra dollars per year, which you can easily use to pay for any maintenance.
Small, new Kia sedans are 0% for 66 months. $257/mo. Fresh credit - along with a relative willing to co-sign for a new, heavily-warrantied vehicle - makes that possible. A lender is more willing to go along with that than finance an old car.
With a small difference, many find it more worthwhile to go new.
Because really, how likely are they to save the difference they're not spending on the payment?
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