So here's my dilema. I am 24yrs old, single and currently live with my parents and have no problem with it. I have $25K saved up in the bank. I have no debt and a steady job. I make about $45-50K/yr before taxes. The real estate market around me has really soared the past couple of yrs (outside of philly) unfortunately I missed the boat, and I can't really afford anything worthwhile other than a 2br condo or tiny townhouse with my credit and financing. So what do I do, buy my own place or keep on living with my parents and buy my dream car the NSX. Or do I just keep on saving up and see where the real estate market is in a couple of years. Or use my money to go to grad school to get my MBA, come out debt free and make more money down the road? Any experience or advice is appreciated.
Buy NSX, live with rents, or buy house, drive beater
- Thread starter chen127
- Start date
Felow NSX's please don't stone me...... :redface:
Buy NSX now and you may regret not owning a house/condo in the future.
Buy house now and you will thank me in the future. Money you make on your house may buy you more than an NSX.
Best Regards
Paul
Buy NSX now and you may regret not owning a house/condo in the future.
Buy house now and you will thank me in the future. Money you make on your house may buy you more than an NSX.
Best Regards
Paul
Don't be stupid. Buy the house. A car is not an investment, it is a toy.
this topic is discussed regularly here (and on probably every high end car enthusiast site)... buy a car when you can afford the car. a car like the nsx is a luxury, but if you buy it today at 24 when you haven't gone through the process of building toward it, you won't enjoy it the same. all of us (i'm 33) who have worked hard, bought a house, paid off our debts, etc. would probably echo the same sentiment, which is that it was a reward to ourselves for our personal efforts. You will not end up with the same feeling if you buy it today. There's a benefit to the process. Besides, from a purely financial perspective, its not a good idea to buy a car instead of a house.
What about option C? Live with 'rents drive a beater.
Some people believe the housing market has become a bubble, and the overextension of credit on over inflated properties may cause a decrease in property values. (I have my own views on this, but they are far too bleak for such a nice board like this). Continue to save your money and watch the market over the next 6 months. Put your money in a "safe" short term investment, and continue saving all that you can. The market is going to turn from a sellers' market to a buyers', and when it does, you'll need all the capital you can muster to reduce the amount of interest you will pay. (generally in a buyers' market interest rates are higher).
Just make sure when you buy a house it has a garage!
Unless it is an Enzo.
Some people believe the housing market has become a bubble, and the overextension of credit on over inflated properties may cause a decrease in property values. (I have my own views on this, but they are far too bleak for such a nice board like this). Continue to save your money and watch the market over the next 6 months. Put your money in a "safe" short term investment, and continue saving all that you can. The market is going to turn from a sellers' market to a buyers', and when it does, you'll need all the capital you can muster to reduce the amount of interest you will pay. (generally in a buyers' market interest rates are higher).
Just make sure when you buy a house it has a garage!
GOTTSPD said:
Unless it is an Enzo.
I purchased my first townhouse when I was 24 and to date I still own it. This was MANY years ago, but shortly after I purchased my first property, I did get a chance to buy a 1991 Blk/Ivory which I drove till the day we had our first child.
That first house was the chain of other properties and a small fleet of high performance cars that are all my "toys" according to my wife.
Buy yourself a small condo, we all have to start somewhere.
That first house was the chain of other properties and a small fleet of high performance cars that are all my "toys" according to my wife.
Buy yourself a small condo, we all have to start somewhere.
As others have said, buy the house. Put simply, if you spend all of your money on a car now you will be even farther away from being able to buy a home anytime in your near future. Take advantage of your current situation and save a little more money if you want to and buy a home of your own. At the end of a long work day when you can come home to a place of your own and kick back and relax you will feel more long term satisfaction than if you bought a car that you only spend part of your time in. Do not get me wrong, I love the NSX, but in 10 years a house will be worth more than a car and will provide you with more stability to your financial profile.
I think its easier to choose what you definately SHOULD NOT DO. Do not buy the car.
The next thing you need to decide is if should you buy the house. Some say that there is a bubble, others forget the past and throw all caution to the wind and suggest that there is not.
I would suggest that you research the buyer of the area you are thinking of purchasing within. Find out what mortgages are typically taken out there, are they no downpayment? All interest? Are there speculators or are these buyers looking to move in with their kids? These things may make that area more prone to a burst should there prove to be a downturn in the market.
Im a HUGE fan of owning a house. However, today, I would be less inclined to buy one for investment purposes than I would for housing my family. There is enough of a concern around a bubble that purchasing one for an investment is becoming too speculative for my tastes; the party is definatly not in its early days and when you start seeing huge headlines about housing as an investment, its not the time to buy IMO. Once you remove the speculator (who will dissapear once there is even a slight reduction in the market), you will loose a big percentage of the buyers and prices will come down.
Edit - highlighted section referring ONLY to purchasing a house as an investment. Housing your family is an entirely different discussion.
The next thing you need to decide is if should you buy the house. Some say that there is a bubble, others forget the past and throw all caution to the wind and suggest that there is not.
I would suggest that you research the buyer of the area you are thinking of purchasing within. Find out what mortgages are typically taken out there, are they no downpayment? All interest? Are there speculators or are these buyers looking to move in with their kids? These things may make that area more prone to a burst should there prove to be a downturn in the market.
Im a HUGE fan of owning a house. However, today, I would be less inclined to buy one for investment purposes than I would for housing my family. There is enough of a concern around a bubble that purchasing one for an investment is becoming too speculative for my tastes; the party is definatly not in its early days and when you start seeing huge headlines about housing as an investment, its not the time to buy IMO. Once you remove the speculator (who will dissapear once there is even a slight reduction in the market), you will loose a big percentage of the buyers and prices will come down.
Edit - highlighted section referring ONLY to purchasing a house as an investment. Housing your family is an entirely different discussion.
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I don't know the market in Phily but...SPA_S2000 said:
I agree with a lot of what Spa has said. Best financial decision I ever made was sucking it up, living worse than I did in college for 18-months and buying my first home (a 3 bedroom townhome). All my friends were leasing new cars, partying their butts off and I was eating Ramen.
Granted there were other factors involved (hard work, a good woman, etc.) but today I live in a house that I never dreamed I'd be able to love in that's less than a mile from the sand and a slight ocean view. I no longer have any student loans, no car payments and my only debt is to the bank that holds my mortgage. And I own an NSX.
Most of my buddies are not as fortunate. They're still leasing cars (many aren't as nice as the ones they were leasing 8 years ago) and they're struggling to buy their first homes in a market where my town home nearly tripled in value during the 7 years I owned it.
Live for today but plan for tomorrow. You'll be a better man for it.
Keep living with your parents rent free and go back to school while you can. In the long run more education typically will make you more money to afford the cars and house later.
I'm at my constant battle of that with my wife... Well I did have my nsx already. And she had her 03 TL bought as new. (The battle was rather set on I shouldn't spend any more money on mods and tracking the nsx.)
I'm more on the side of saving money and wait than streching to buy a house. She, like 99.9% of women out there, would like to have her own house. (We are living in a town house, I don't own it, no rent either, just the normal owning house expense and property tax).
Looking around the behavior of most people in my area, lately, I just don't see what would support people to pay such a high price for the house. I can't say it in details, put it that way, I don't even see United States having any better economy in next 10 years. The recent real estates price just totally not sync' with the economy growth rate. I had seen so many of my freinds, uncles getting so screwed when the bubble busted back home. I'm not going to be one of them.
Anyway, here's what my 2 cents are:
You seems to have a nice job, and you are happy about it. That put you in a position better than most people in US.
You definately wants to be financial stable and interested in investment.
You wanted a house
You wanted a nsx.
of these all 3, what is the most important to you?
nsx is a toy, but I think most people here could tell you it ties your emotion and happiness in way that it's not JUST a Toy. Especially when you earn the money yourself and you are having this nice piece of equipment in your 20's.
House is for living, first, chicks don't dig guys living w/ parents. Even if they do, they will try to get you to move out. Doesn't matter even if your parents living in a 6000 sq.ft. house and you had your own pad. HOUSE is not an investment. It could, but it's with a big question mark.
As other suggested, housing is not an stable investment anymore, there's a lot more ways for you to earn money
Good luck on your decision.
If you didn't get tired of going back to school, IMO, education is always the best investment to one self.
I'm more on the side of saving money and wait than streching to buy a house. She, like 99.9% of women out there, would like to have her own house. (We are living in a town house, I don't own it, no rent either, just the normal owning house expense and property tax).
Looking around the behavior of most people in my area, lately, I just don't see what would support people to pay such a high price for the house. I can't say it in details, put it that way, I don't even see United States having any better economy in next 10 years. The recent real estates price just totally not sync' with the economy growth rate. I had seen so many of my freinds, uncles getting so screwed when the bubble busted back home. I'm not going to be one of them.
Anyway, here's what my 2 cents are:
You seems to have a nice job, and you are happy about it. That put you in a position better than most people in US.
You definately wants to be financial stable and interested in investment.
You wanted a house
You wanted a nsx.
of these all 3, what is the most important to you?
nsx is a toy, but I think most people here could tell you it ties your emotion and happiness in way that it's not JUST a Toy. Especially when you earn the money yourself and you are having this nice piece of equipment in your 20's.
House is for living, first, chicks don't dig guys living w/ parents. Even if they do, they will try to get you to move out. Doesn't matter even if your parents living in a 6000 sq.ft. house and you had your own pad. HOUSE is not an investment. It could, but it's with a big question mark.
As other suggested, housing is not an stable investment anymore, there's a lot more ways for you to earn money
Good luck on your decision.
If you didn't get tired of going back to school, IMO, education is always the best investment to one self.
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live with rents, buy beater, and invest the crap out of your money,
and date a rich girl that wants to 'mend your bad boy ways' ROFFL!!!
and date a rich girl that wants to 'mend your bad boy ways' ROFFL!!!
True, same thing can apply to house, nice car, boat
, or other toys. In this material world, you are more likely not as fortune as having them all. Find your own drug, and pass all the other temptations. (For me, I will kill myself if I trapped in my own house and that's the only thing I live for. Sorry, that's me.)I'm really sick and tired of the last statement (not from you, but I heard the same thing over and over from a lot of people who had a nice house now.). I'll bet you all my savings (not much anyway
) that you won't be able to do that in next 7 yrs. You got a nice ride before the bubble bust. Don't brag!!!Good Advice, where do I start?? :biggrin:
I'll go against the grain. Buy the NSX if that makes you happy. If you would rather get a house, get a house. You'll only live once and remember, you can live in your car if you have to.......you can't drive a house.
Also, you can always make more money...........
JMO,
Ben
FWIW, I had my first NSX before my first house and financially am still OK.
Also, you can always make more money...........
JMO,
Ben
FWIW, I had my first NSX before my first house and financially am still OK.
Hmm...I dunno abuot buying the house.
Buying a house makes a lot of sense from a tax perspective, which has gone unmentioned here. You get to deduct mortgage interest on your return. Even if housing prices stay static or decline slightly, this may still end up as a net positive for you.
However, buying a house now and expecting it to "triple" or whatever is absurd. Make no mistake, the housing market has TOPPED. I live in a very high-end neighborhood and the sales prices have actually gone down over the last few months. We have Michael Brown, the FEMA guy, there, a couple Wizards players, city councilmen, etc. Very costly townhouses, mostly. But, as desirable a location as it is, people have had to come down on their sales prices to move properties. For example, one 24' TH was originally listed at $995,000. My eldest boy likes to take the spec sheets out of the boxes on the signs. Later in the summer, he brought another one home on the same house for $60,000 less. The house next door originally listed for $765,000. It sat the entire summer, and I saw the relist at $30,000 less. What it ended up selling for was probably 10 or 20 less than this.
The housing market has topped because, as I forecast before, eventually, people are running up to the limits of what debt they can service. When this game of musical chairs stops, markets like Miami and SoCal are going to crash. There is no other option here. There's a huge glut of high-end condos and other properties which are beyond the means of *most* people. When I bought in 2000, I thought it was absurd to pay what I was going to pay, after already seeing years of insane escalation. The qualifying income for my loan was $90,000. I wondered aloud, are there THAT many people who make $90,000? The income statistics say that there aren't.
So, a LOT of creative BS was taking place to "fit the payment" within people's means. People have been leasing houses, basically, except there is no mandatory buyback by the dealer. Now, the market runup has gone so far that people haven't been able to afford standard mortgages, so they are doing interest only loans. Something like 60% of the mortgages underwritten in CA last year were interest only. This is a recipe for a crash. Even that $30,000 reduction or $60,000 reduction in value is going to leave a lot of people dead in the water, because that is CASH you have to come up with at closing. So, what are they going to do? Sell other properties.
When you have so much "wealth" tied up in real estate and people do not have the liquidity to support being underwater on a property sale, you are going to end up with a lot of supply to choose from in certain markets.
I seriously doubt, however, that your area is prone to this. The super high end, insanity markets like MIA or SoCal will be like NYC was in the 80s in commercial real estate.
You should examine your market and research the level of flipping, investment properties, interest-only loans, etc., to determine how far out of whack it is. A good criterion is the ratio of rents to mortgage payments on a particular type of housing. If it costs far less to rent than it would to buy, you are in a fairly overvalued market condition.
If it were me, I would continue to live w/ my parents and try to pick up a good deal on a car. This may or may not mean an NSX. An MBA is a virtually worthless degree, so I would not pursue that. An advanced technical degree will earn considerably more respect and future pay.
I certainly wish I'd played the real estate market more throughout the last 5 years. I did buy and sell one condo within 6 months and made considerable profit. However, given what I see now here, I would be divesting myself of all of these holdings.
Buying a house makes a lot of sense from a tax perspective, which has gone unmentioned here. You get to deduct mortgage interest on your return. Even if housing prices stay static or decline slightly, this may still end up as a net positive for you.
However, buying a house now and expecting it to "triple" or whatever is absurd. Make no mistake, the housing market has TOPPED. I live in a very high-end neighborhood and the sales prices have actually gone down over the last few months. We have Michael Brown, the FEMA guy, there, a couple Wizards players, city councilmen, etc. Very costly townhouses, mostly. But, as desirable a location as it is, people have had to come down on their sales prices to move properties. For example, one 24' TH was originally listed at $995,000. My eldest boy likes to take the spec sheets out of the boxes on the signs. Later in the summer, he brought another one home on the same house for $60,000 less. The house next door originally listed for $765,000. It sat the entire summer, and I saw the relist at $30,000 less. What it ended up selling for was probably 10 or 20 less than this.
The housing market has topped because, as I forecast before, eventually, people are running up to the limits of what debt they can service. When this game of musical chairs stops, markets like Miami and SoCal are going to crash. There is no other option here. There's a huge glut of high-end condos and other properties which are beyond the means of *most* people. When I bought in 2000, I thought it was absurd to pay what I was going to pay, after already seeing years of insane escalation. The qualifying income for my loan was $90,000. I wondered aloud, are there THAT many people who make $90,000? The income statistics say that there aren't.
So, a LOT of creative BS was taking place to "fit the payment" within people's means. People have been leasing houses, basically, except there is no mandatory buyback by the dealer. Now, the market runup has gone so far that people haven't been able to afford standard mortgages, so they are doing interest only loans. Something like 60% of the mortgages underwritten in CA last year were interest only. This is a recipe for a crash. Even that $30,000 reduction or $60,000 reduction in value is going to leave a lot of people dead in the water, because that is CASH you have to come up with at closing. So, what are they going to do? Sell other properties.
When you have so much "wealth" tied up in real estate and people do not have the liquidity to support being underwater on a property sale, you are going to end up with a lot of supply to choose from in certain markets.
I seriously doubt, however, that your area is prone to this. The super high end, insanity markets like MIA or SoCal will be like NYC was in the 80s in commercial real estate.
You should examine your market and research the level of flipping, investment properties, interest-only loans, etc., to determine how far out of whack it is. A good criterion is the ratio of rents to mortgage payments on a particular type of housing. If it costs far less to rent than it would to buy, you are in a fairly overvalued market condition.
If it were me, I would continue to live w/ my parents and try to pick up a good deal on a car. This may or may not mean an NSX. An MBA is a virtually worthless degree, so I would not pursue that. An advanced technical degree will earn considerably more respect and future pay.
I certainly wish I'd played the real estate market more throughout the last 5 years. I did buy and sell one condo within 6 months and made considerable profit. However, given what I see now here, I would be divesting myself of all of these holdings.
But Ben,,you did'nt tell the Kid how much higher education you had :wink: My advice,if you are in a renumeration dead end with your job,and don't see the pay going up much,then work on changing that!If that means grad school then so be it.Are you ready to settle for your 50k/yr if you want to own your own home and play with sports cars? fwiw.
I think the smart thing is to buy the house and then get the NSX.... I was 24 and in the same boat and I bought the house and a year later bought the NSX and now Im looking to buy my 3rd house tommorrow. Goes to show you... Real Estate is the only real way to make big money legally and its safer than stocks. :wink:
I dont know about the market being TOPPED. No conconclusive evidence yet. But It does seem to be headed that way. For example: One house sold for 900k. The next similar house lists at 999k, but sells at 910k. This is still an increase over the last home sale despite being 89k less than asking. I think the only thing that has topped is the unrealistic list prices set by the sellers.
Sorry for the brief hi-jack, I dont know what is so appealing about commenting on liftshard's comments. :smile:
Just keep in mind that which ever you get, there will be additional expenses as well. Houses have furniuture, utilities, repairs, tax
. Cars have have maintenance and MODS! :smile:
Sorry for the brief hi-jack, I dont know what is so appealing about commenting on liftshard's comments. :smile:
Just keep in mind that which ever you get, there will be additional expenses as well. Houses have furniuture, utilities, repairs, tax
. Cars have have maintenance and MODS! :smile:
I think that Liftshard provided a ton of useful advice until he said this:
Quite simply not true. My MBA, which I graduated from in 2000, was the single best decision I have ever made (aside from marrying my tollerant wife). I entered it with a MSc as well, and, immediately upon graduation, my salary was almost 3x what I made entering my MBA just 12 months prior. Each year my pay has increased, on average of 40%. I now make 15x what I made at a reasonable job after grad school. None of that would have happened without my MBA.
Best move ever.
My vote goes to doing an MBA *at a great school*.
liftshard said:
Quite simply not true. My MBA, which I graduated from in 2000, was the single best decision I have ever made (aside from marrying my tollerant wife). I entered it with a MSc as well, and, immediately upon graduation, my salary was almost 3x what I made entering my MBA just 12 months prior. Each year my pay has increased, on average of 40%. I now make 15x what I made at a reasonable job after grad school. None of that would have happened without my MBA.
Best move ever.
My vote goes to doing an MBA *at a great school*.
I would agree as well. My MBA opened many doors for me that would have otherwise been closed. I didn't get a threefold increase in salary, but I got a good enough bump -- but the real win was the better jobs that came my way.SPA_S2000 said:
As far as buying a house -- yes, the market is high now (and in some areas, absurdly high), so you have to consider how long you plan to own the house. If you're only planning on living there 3-5 years, it's probably better to rent for now. But if you're looking for a place to live 10+ years, or if you don't otherwise intend to sell (i.e. use it as a rental property later on), then now's as good of a time to buy as any.
But by all means -- buy the house first. I waited nine years to buy my NSX -- and in that time I bought two houses and paid off all non-mortgage debt, in addition to saving money for the car.
Very good to hear. I am 21 and planning on an MBA after working. The fact is that on average last year an MBA equated to a $27k/yr increase in salary, and potentially much more if you go to a good/great school rather than an average one. That's definitely not worthless.SPA_S2000 said:
I love the financial advice in this forum. I am in a similar situation to the original poster, kind of. I am 21 and about to graduate soon, have ~$40k saved and very minimal debt and am virtually guaranteed a $45-50k job and then will go back for my MBA after 3 years or so... well that's the plan anyway. An NSX has been my dream for many many years... I've worked it out in my head a few times and every time the conclusion is the same: I COULD afford an NSX, but it would NOT be a smart decision (cars never really are). Maybe if it was $10k cheaper, or if my car got stolen and I got a lot of insurance money ($9k blue book + $6k reimbursement for mods = I could and would get an NSX). But otherwise, it's just not a smart decision esp. in such an unstable point in your life.
My current plan is to just keep saving money while paying <$750 rent (I will take the luxury of a pretty nice place I think) and driving/autocrossing my paid off Integra... which is a ton of fun to drive anyway. It's tempting to get a faster, "nicer" car that I've always wanted (plus girls don't like the c/f hood and hard ride hehe) but it doesn't matter. Saving money is such a good thing to do when you're young, and springing for that tempting NSX could have you kicking yourself many times in the future.
By the responses that I've read, it is obvious that NSX owners are a classy bunch.
Anyways, I would have to agree with most of the responses on here...enjoy the fruits of your labor later. Save now, grow your money, grow yourself professionally, and get the car later. In terms of either going to school or the house, I'd really have to know what area of focus you'll be going into for school, but I'm not sure you can go wrong with real-estate at this point. It will take a breather that's for sure, but over the long run, real estate is a stable asset with much upside potential. Let's just say, the number of people in the world will just increase, and the amount of land available to us is exactly the same as it was 500 million years ago (unless you count moving to the moon, but the timeline is so far out it wouldn't affect your investment timeline).
Anyways, I would have to agree with most of the responses on here...enjoy the fruits of your labor later. Save now, grow your money, grow yourself professionally, and get the car later. In terms of either going to school or the house, I'd really have to know what area of focus you'll be going into for school, but I'm not sure you can go wrong with real-estate at this point. It will take a breather that's for sure, but over the long run, real estate is a stable asset with much upside potential. Let's just say, the number of people in the world will just increase, and the amount of land available to us is exactly the same as it was 500 million years ago (unless you count moving to the moon, but the timeline is so far out it wouldn't affect your investment timeline).
wait till the interest rate rises and the housing market cools off. There is no point in getting in while its at the peak only to have prices drop in a year.
Drive the NSX i got 2. NSX will make you happy. Im in the same boat. Im renting right now and waiting for the market to cool down.
Drive the NSX i got 2. NSX will make you happy. Im in the same boat. Im renting right now and waiting for the market to cool down.
