[Toshi]

I didn't see a positive net worth until I was 40 mainly due to selling homes in a down market, once you do hit break even the assets add up more quickly than you would think.

I have no advice but what worked for us was paying off the cars and not getting new ones, not spending more on a house than we gross in a year and cutting back on bike bits.

The other interesting thing I have learned is that older I get the more satisfied I am with my job so, because I have qualified pension with cash value and 401K match, I could retire at 55. Sticking out to 62 nearly doubles my benefit, sticking it out to 67 triples it... as long as I continue to like my job I will continue to work.

What will stop me from tetiring early is the high cost of health insurance, my dad retired at 60 and paid nearly 3K a month for 2 years and $1800 for another year until my mom turned 62. He hated his job so it was worth it to him.

Good advice. I plan to adhere to it with modification. House was about 1.8x gross, we'll probably get a Tesla or two down the road (but after more pressing financial things are taken care of), and I cut back on the bike bits long ago.

I'm probably too comfortable with debt, but I feel no compulsion to pay it off early since it's all at low effective rates at this point: highest is 2.875%, lowest is near 0%.

I think I'll truly hit 0 net worth this fall, at age 34, fwiw. Goal from there is to increase net worth by at least $100k/yr before accounting for market changes so as to hit financial independence asap.

In hindsight I should have retired five years earlier. That, however, might have caused some transformative personal changes in 2011 and 2012 not to happen...

It's hard to second guess past choices. Seems like you've been making the most of your newly free time, though.

 

[johnbryanpeters]

The fact that you're in your mid thirties and looking forward to hitting positive net worth is an interesting symbol of current times. I started with positive net worth lets say in my teens sometime and with the exception of a mortgage never incurred debt. Everything else was paid for up front with cash. This did not depend on family money, it was based on earned income and savings.

 

[Toshi]

It's all the student loans. At least for me it was state med school student loans (parents paid for my Ivy League undergrad), plus being on the hook for my non-working wife's small undergrad and big master's degree debt. Due to the length of medical training, which for me was a total of 10 years past undergrad plus a year off before starting that train, I basically couldn't even cover interest on my loans until last year.

For people who just went to undergrad I would hope that they would be out of the hole by their late 20s. Sadly this isn't the case. People are generally bad with money.

 

[Serial Midget]

Another tip... no divorce, super costly!

 

[Toshi]

Yup. One house, one wife, and hopefully one job (now that I'm done with those years of training where I necessarily jumped around).

 

[jdcamb]

As much as you think you will need. Double it. Even if you don't hit your goal. You're still well ahead. Once you become accustomed to living below your means. You more then likely will continue to think like that well into retirement. I have plenty of time to spend money now and I do. You get your statement and think... Hell I can do that or buy that. Once you dip below your projections as I have their is no longer a way to recover from those dips. So I am back living like a Ghettobird until I recover.

 

[stevew]

The fact that you're in your mid thirties and looking forward to hitting positive net worth is an interesting symbol of current times. I started with positive net worth lets say in my teens sometime and with the exception of a mortgage never incurred debt. Everything else was paid for up front with cash. This did not depend on family money, it was based on earned income and savings.

were you not a teen before the advent of the credit card?

 

[johnbryanpeters]

were you not a teen before the advent of the credit card?

Bingo. I have watched a lot of people fall into that trap.

 

[Pesqueeb]

Average monthly payment: $503 — the first time the average auto payment has gone over the $500 mark.

Average term for an auto loan: 68 months — this is the longest average term ever seen by Experian.

http://www.cnbc.com/2016/06/02/us-borrowers-are-paying-more-and-for-longer-on-their-auto-loans.html

 

[Toshi]

This is why people bitch and moan when their gas bill goes up $40/month. They live that close to the edge.

/notwinning

 

[Serial Midget]

It's too easy to spend money you don't have, ever notice that those who pay cash buy more modest vehicles and keep them for a longer period of time? I had a 500 dollar car payment in the mid 90s and it didn't bother me at all, I'd be pissing a storm if I had to that today.

 

[Toshi]

I financed both of my vehicles for 65 months... because DCU has/had the same rates until that point. I invest the difference and it makes cash flow easier since I am salaried and paid monthly but have a non-negligible yearly bonus.

At these rates it makes no sense for people who have their financial shit in order not to finance: 1.24% on the EV, 1.49% on the gas guzzler. I'm planning on keeping the former until 2020 when its extended warranty is up, the latter forever.

I agree that the stats do not bode well for the populace in general, who roll in negative equity from prior loans and make poor financial decisions, on the other hand.

 

[jimmydean]

http://www.cnbc.com/2016/06/02/us-borrowers-are-paying-more-and-for-longer-on-their-auto-loans.html

Because you have a lot of young/stupid money, too. There are 20somethings around here rolling M5's, R8's and GTR's (average sticker price near 6 figures). When I was in my 20's, my truck payment was $135 a month for 48 months through the credit union.

My buddy Danny is nearing 40 and just bought a GTR. But his is an '09 he got for $48k and paid cash because he's got it like that.

<edit> $135 being about $225 in todays money (because I am old).

 

[Serial Midget]

Because you have a lot of young/stupid money, too. There are 20somethings around here rolling M5's, R8's and GTR's (average sticker price near 6 figures). When I was in my 20's, my truck payment was $135 a month for 48 months through the credit union.

My buddy Danny is nearing 40 and just bought a GTR. But his is an '09 he got for $48k and paid cash because he's got it like that.

<edit> $135 being about $225 in todays money (because I am old).

My first mortgage payment was $165.00, I put 10K down on a 26K house...

 

[rideit]

My new truck payment is $220, so i will call it $135...

 

[jimmydean]

My new truck payment is $220, so i will call it $135...

My car payment is $275, but my interest rate sucks due to vehicle age (an '01 purchased in '14 with 70k miles). I could get a personal loan at a better rate and pay the higher interest bitch off, but I'm lazy (and only have like a year left).

 

[rideit]

I got 2.9%, but i had 15k down, and it was a 13'. They gave me 8k for my basically dead F150, so I feel like I got a fair deal. Very happy with the Chevy!

 

[johnbryanpeters]

My first mortgage payment was $165.00, I put 10K down on a 26K house...

Similar experience.$10K down on a $30 K purchase, 10 acres and a couple of houses. The empire has grown to 75 acres, the second house is in teardown/falldown phase, all paid for in the mid 90s or so. Only problem I have is who to give it to when I croak.

 

[Pesqueeb]

Similar experience.$10K down on a $30 K purchase, 10 acres and a couple of houses. The empire has grown to 75 acres, the second house is in teardown/falldown phase, all paid for in the mid 90s or so. Only problem I have is who to give it to when I croak.

 

[Toshi]

PITI on my mortgage is just shy of $3,400. The two car notes are just over $900 combined. Two student loans are about $3,100 combined on 7 and 10 year repayment, respectively.

The upside is it's going to feel like I have a metric shit-ton of money once this debt is retired as we live within our means after servicing all these debts dutifully (and we don't carry any high interest debt).

 

[Nick]

holy balls, Toshi.


my first home was a townhouse, cost $79,000.
my second home was moving into my ex's city condo. we had deeded parking spaces that sold for $60k /ea.

these days I squirrel away every buck I can, and still manage to have a decent quality of life.

 

[Serial Midget]

Educational investments and housing aside, debt decreases your ability to control future regardless of interest. Living within ones means shouldn't include too many monthly payment options, particularly when depreciating assets are involved.

 

[Toshi]

Debt is leverage. I am highly leveraged. It's also all in my name plus I'm insured for death and disability alike so I and my family will be ok in most any circumstance.

Given this I see no reason to not maintain this leverage. It'll unwind eventually but for now it let's me live month to month, not rely on the bonus too much, max out my tax deferred spaces (401(a), 403(b), 457(b), HSA), and put away what extra may exist into Betterment.

 

[Serial Midget]

You are very brave; I fear committment.

 

[Pesqueeb]

holy balls, Toshi.

Fuck me running, that's nutty.

 

[stevew]

My new truck payment is $220, so i will call it $135...

my last two cars were not new but they were free....

 

[mykel]

52 years old.
Currently run a 2003 Civic SiR.
Bought new, paid off 2006.
Currently not stock - many many modifications. Engine swap, IHE, suspension, big brake swap etc etc
Basically a toy, (8500 rpm redline is a whole bunch of fun )

Other car is a 2006 Mazda 6 Wagon.
Again bought new, and paid off years ago.
Just had a full body job and paint. (Canadian winters can suck - lotsa salt = lotsa rust)
Mechanically solid, low mileage - much better ROI to fix the body then replace it.

Would I like a couple of new vehicles?
Ya, to a point, but when I look at costs, vs what is available / new tech / quality - I just don't see any value.

When the current vehicles ( which are worth pretty much nothing book wise) start costing close to a car payment a month in maintenance / or are just plain worn out - then I guess I will look at something else.

 

[jimmydean]

My truck is a '92 I paid cash for (left over from the insurance payout on the first Vette). In the near 4 years I've had it it has only cost me a $130 radiator and I might change the oil one day, too.

I hate my student loans, but I needed education.

 

[jimmydean]

And then there is this.

https://www.lightstream.com/mecum-auctions

Now you can finance your "investment".

 

[Toshi]

That link just redirects to the standard "rates as low as 1.99% APR*" page for auto loans.

 

[jimmydean]

That link just redirects to the standard "rates as low as 1.99% APR*" page for auto loans.

They offer loans for Mecum auctions, so you can get pre-approved $300k for the '63 all original Vette, and you can do it for as little as 1.99%!!! In a year, the Vette will be worth DOUBLE what you paid for it while only gaining minimal interest. It is the most sound investment strategy I have ever seen.

Pump and dump of classic cars.

 

[Toshi]

It saddens me that I'll never be able to afford, or at least justify, a Singer 911. (If I could afford it why didn't I retire that much earlier?)

 

[Jm_]

It saddens me that I'll never be able to afford, or at least justify, a Singer 911. (If I could afford it why didn't I retire that much earlier?)

Just keep your eyes out for an ole water cooled. I'd have to think that would be tons of fun.

 

[Toshi]

Just keep your eyes out for an ole water cooled. I'd have to think that would be tons of fun.

Water cooled? Sacrilege. A grandma-garaged 993 with 20k miles for a steal would be great down the road...

 

[Jm_]

Water cooled? Sacrilege. A grandma-garaged 993 with 20k miles for a steal would be great down the road...

I meant air cooled, I don't know what I was thinking when I typed that.

 

[jimmydean]

So close!!!

It's all in how you reinvest.

A Georgia man who won millions in the lottery could face life in prison after pleading guilty to using a portion of his prize to invest in a crystal meth operation.

 

[Pesqueeb]

So close!!!

It's all in how you reinvest.

"As a result of his unsound investment strategy, [he] now faces decades in a federal prison."

Sounds like he needed to talk with @stoney

 

[stoney]

Sounds like he needed to talk with @stoney

Hell, you could have helped him out.

 

[Toshi]

The upside of such an unconventional venture is huge. So is the downside. The lesson he should have learned is that with $3M he didn't need to gamble but rather just settle for the same returns as everyone else, as that would have been pretty swell in and of itself.

 

[jimmydean]

Hell, you could have helped him out.

Some investors say it's smart to invest in your hobbies.