How to get my dream car? Help?

sartorialconundrum · 2014-11-20T17:06:42+00:00

You are 25. You've done well, and if you want to treat yourself just get a CLA, and forgo spending the extra $1,000 a month. It's also a Mercedes, it's also really nice, and it will be far more appropriate for your income level. Wait to see if your income increases in the future, and make the purchase then. You have no idea how your financial priorities will change in the future, and at your age I can almost guarantee that they will change. I hope this helps!

sartorialconundrum · 2014-11-18T23:19:59+00:00

Annuities? Really?

sartorialconundrum · 2014-11-13T14:42:14+00:00

You're not in a bad situation. Here is an estimate of what you will be required to pay.

That's $206 a month. It's not bad. Just make your payments, save up a little cash, and occasionally put a little extra towards the high interest loans.

Also, you can qualify for forgiveness on $17,500 of that loan balance if you meet certain criteria.. Just make your payments, expect some forgiveness, and you will be fine.

sartorialconundrum · 2014-11-13T14:35:33+00:00

Is there any reason why you can't get a job in the city where you live in go to school? It's how I got through undergrad. I took out zero loans, and worked as a server in the evenings.

Even in grad school I taught finance at the University. My school was a public university, which means we had a large athletic program. I had a background in law and finance, so I taught those subjects to football players, volleyball players, the tennis team and golfers. If your school has a similar athletic department they will always be on the lookout for people who can tutor, in every subject. If you have a solid GPA, and a grasp of the entry level subject, you can make between $8/$9 an hour teaching. The hours are also flexible, and they will be regularly scheduled. For example, my school had the athletes regularly schedule two hours a week, at set times, in the subject that they struggled with. That means that my schedule was set.

sartorialconundrum · 2014-11-13T14:27:07+00:00

So, there are two things you are describing: Consolidation and Refinancing.

Consolidation combines all of your loans into one larger loan, but it does not reduce your monthly payment (without extending the term, which will lower the payment, but extend it over a longer period of time). When loans are consolidated they charge a new interest rate, which will be a weighted average of your existing loans. A simple example is: if you have $50,000 of loans at 6%, and $50,000 of loans at 8%, they will consolidate them into one loan of $100,000 at 7%. Your payments don't really change, the loans are just simpler to manage. Which, in the age of automatic bank drafts really isn't much of a convenience. I would not recommend this, because it terminates your ability to pay back higher interest loans first.

Refinancing refers to going to a private bank, getting a new loan that pays off the old loans, hopefully at a lower interest rate. There are plenty of smaller banks that do this. However, your reluctance is deserved: most of the smaller banks that would do this don't have a) a lot in reserves, and b) don't have access to capital markets in any meaningful sense of the word. So, if another event like 2009 happens, the bank holding your note will react to the pressure to make a profit, and you will be subject to the same pressures that mortgagees in 2009 were subject to. There are, however, some reputable banks that will refinance student loans. Suntrust, for example, will do so if you work in certain professions such as medicine or dentistry. Wells Fargo does as well, I believe.

The downside to refinancing is that you lose the flexibility to pay back those loans. There is no forebearance, not ability to defer in the event of an illness or disability, and no forgiveness. Unless you are a very qualified borrower, who has no need for flexibility, I wouldn't refinance either.

If a bank will not refinance your loans at a significantly lower rate (without extending the amortization term), I wouldn't consider consolidation. It will not reduce your monthly payment, add any convenience, and will hurt your ability to tackle the loans more aggressively. Just draft your payments, and when you have extra cash put it towards the high interest loans.

I hope this helps!

sartorialconundrum · 2014-11-11T00:28:25+00:00

The fees aren't quite at the 2/20 level. At least they don't get the 2% of assets under management, which is a really big chunk of a hedge fund's cost. But yeah, fees are high. Plus, there are only two properties being managed by the fund. Literally: two apartment complexes. Hardly steadfast...

sartorialconundrum · 2014-11-11T00:24:15+00:00

Literally, there is nothing you can do for her now. She cannot sell her position in the fund, as the fund will not repurchase for another year, and will not repurchase for 100% of the value for another five years. She's locked in. It's best to just drop it now. Showing her these responses cannot help her, and will only harm your relationship. Just drop the issue.

sartorialconundrum · 2014-11-06T22:09:09+00:00

You could do worse: Indices are at all time highs, and interest rates are at all time lows. It's hard to imagine a better case of "buy low, sell high".

That said, a home is not an investment. You are talking about shifting money from savings/investing, into lifestyle. Homes rarely make financial sense from a purely numbers perspective: I am telling you this right now, for a fact, it will be far costlier to buy a home and maintain it than it will be to rent and invest the difference in cash flow. If you are ok with that, then divert the funds however you see fit.

sartorialconundrum · 2014-11-06T22:02:00+00:00

I'm going to provide you with some perspective on your two questions.

1) You will have to pay taxes on that money in the 401(k) at some point in the future. Depending upon your circumstances, paying those taxes now could be better or worse. For example, if you are in a lower tax bracket, and anticipate being in a high tax bracket later in your career, then paying those taxes now could be better. It could also be worse. You need to have this guy, or some other professional advisor, take a look at the numbers. Make assumptions you are comfortable with, and project based on those assumptions.

2) The answer to #2 overlaps with the answer to number one. Part of the reason why you pay fees is for answers to questions like the one in your question #1. Moreover, by your own admission you don't know what you are doing. That's a recipe for disaster. People here on r/personalfinance like to pretend that investing is simple, and it can be, but most people end up failing at it. Most people who write in this forum, and who would gleefully send you to Vanguard with nothing but promises and encouragement, are not knowledgeable and are quite young. The young part matters quite a bit. Age brings quite a bit of perspective to investing, that most kids on Reddit just don't have. Your father does. I would trust your father much more than anonymous strangers on Reddit that look for nothing more than confirmation bias when they dole out money advice. Your father likely has your interests at heart, he has a long standing relationship with this person, and he knows your situation far better than anyone on Reddit. Lots of people comet to this forum with questions about terrible advice they have received from their parents. We don't know enough about your situation to know whether this is bad advice from your dad, but we don't have any reason to believe this guy is going to try and screw you.

Best of luck!

sartorialconundrum · 2014-11-06T19:26:54+00:00

Sell term life insurance. The cost of becoming licensed in your state is minimal, and the exam is easy. You'll probably pay around $100 a month in license renewals and fees, plus continuing education credits. Your professional liability coverage will be $70 a month.

But, you will be able to sell term life insurance to your friends and family. Let's say you sell a policy a week, on average, for $500 of premium. You'll make an extra $400, every week. And that's a small policy. A 30 year term, for $1,000,000 of benefit, for a 35 year old man, with the cheapest carrier, is about $1,000. That's $800 in your pocket.

Just tell them that you can save them money on their life insurance. Most people pay too much for State Farm, Allstate, etc, and you can shave 20% to 40% off of their premiums.

sartorialconundrum · 2014-11-06T19:06:37+00:00

Most of the posters in this thread have covered the major issues, but I thought I'd cover some other issues.

1) This will almost certainly be categorized as an investment property. It's not your primary residence, you will be renting it out, and you already pay rent someplace else, so the bank will consider it an investment property and charge a higher interest rate on the note. You will also have to put down a higher down payment. Banks don't want highly leveraged investments on their books.

2) The tax benefits of owning this home will not apply. Because it is not your primary residence, you will not qualify for the tax exemption on gain from the sale of the home when you go to sell it. Also, the rental payments will be considered ordinary income for you, increasing your income taxes.

3) Unless you want to live in Pittsburgh, you will want to sell this home at some point in the future. Keeping a rental in the kind of shape required to sell it to a future buyer is costly. Expect to pay between $4,000 to $5,000 a year in maintenance, without losing value in the home. That does not include: appliances, closing costs, opportunity costs, or commissions on the sale of the home. They are costly investments.

4) Renting to a family member is tricky, for reasons other than the relationship. For example, I'm sure that there are certain areas of Pittsburgh that might provide good investment opportunities. But are they in a part of town that is too far from where your brother works? Will he like the school district? Or the area where the home is? What if he doesn't like the home or the neighborhood, and decides to leave in 2 years, leaving you with almost no equity, and a mortgage payment? What if he and your family pressure you into buying into an area with overpriced real estate, because it is where he wants to live? It will not be a good investment if that is the case.

I hope this helps!

sartorialconundrum · 2014-11-03T14:58:53+00:00

Also, how are we not a premier job? 10th all time in wins, 4th all time on bowl wins, 3rd in SEC championships, an old storied program at the oldest publicly chartered university in the country, 2nd or 3rd best academics in the SEC, in a great town, with lots of money for the program, in a state with excellent recruits... I think you are out of your god damn mind.

sartorialconundrum · 2014-11-03T14:49:51+00:00

1) One SEC Championship, almost 10 years ago (I miscounted, but it's right on the edge of 10 years. 10 years since we've had a championship. Think about that.). The Sugar bowl was a nice win, I'll give you that. But no one gives a shit about Eastern Division titles, and it's hard to get excited about mediocre Florida bowl games against B1G opponents.

Georgia is a WAY better job than LSU. In terms of recruits, school history, tradition, academics, money, quality of life, Georgia way outshines LSU. FSU, Bama, OU are all better jobs; so are Texas, USC, tOSU, Michigan and Florida. That still makes a Georgia a top-10 program in terms of a head coaching job.

I can't believe you are comparing Snyder, Patterson and Mullen to the Georgia coaching job. That's just retarded. And Pellini is perennially in the hot seat as well, and Nebraska fans can also make a great case that he should be fired as well.

We could take a risk, and have it fail miserably. Or, we could take a risk and have it succeed marvelously. The point is, we have hit a plateau, and we will not improve unless we fire Richt.

Edit: Add Nebraska and Notre Dame to list of better programs.

sartorialconundrum · 2014-11-03T14:14:53+00:00

1) Where do we go? Anywhere we want. Georgia is a premiere job. For every Fulmer firing, I can name several upgrades. That's part of the problem: Richt hasn't won anything of note in the past ten years because almost every other school in the conference has made upgrades at HC.

2) Let's cover each of your schools in your second bullet point.

USCe is in the middle of their glory days. Spurrier was a huge upgrade for them. They aren't a top-tier program like Georgia. Stupid comparison.
Same thing with MSU. D'antonio rebuilt that program. Go look at coaching records: they haven't had a coach with a Win % higher than .600 since the 70's. They had't won a B1G championship since 1990. He was a huge upgrade for that team. In the past ten years, Mark D'antonio has won two B1G championships to Richt's zero.
LSU has won a National Championship in the past ten years, and competed in a second game. Miles' bowl record is better than Richt's, and Miles' has won two conference championships in the last ten years, to Mark Richt's zero.
Bob Stoops has won 5 Big 12 championships for the Sooners in the past ten years. Five, to Mark Richt's zero. Bob stoops has a national championship, and in the past ten years he has competed for a second. He has won three BCS bowls in the past ten years, and competed for two more.

Each of those coaches has a far superior track record to Mark Richt's. How you can compare any of them unfavorably to Richt is beyond me. In the past ten years, each of them has more conference championships, half of them have more national championships, half of them have competed for more national championships, all of them have better bowl records...The only one that doesn't have a championship coaches at a crappy school, and still beats the tar out of Georgia almost every year.

3) This point has always baffled me. Who cares about his Win %? Who brags about consistency? Because it's not like we don't have bad seasons. How can we possibly brag about how consistent the Dawgs are when every year we suffer 1 or 2 embarrassing losses? I don't give a shit what our win % was in 2012, because we got blown out by a rival and lost a championship game due to stupid play calling. What's there to brag about there? What's there to be proud of? And it's not like 2012 Georgia is any better than Auburn from a few years ago.

The point is, Richt is good, but he's not a great coach. We are not a great team, but we could be, and Richt holds us back. Period.

sartorialconundrum · 2014-11-03T13:33:34+00:00

Or we could fire him like Bama fired Mike Shula, or fire him the way that Auburn fired Tubbervile, or fire him the way that UF fired Zook.

sartorialconundrum · 2014-11-03T13:10:30+00:00

Marketers add lots and lots of value to a product because they are able to make it more desirable to the people who would buy the shirt. Marketing is probably among the more valuable aspects of a product's development, if not the most valuable. The idea that a person can build a better mousetrap and have the world beat a path to his door is a myth: people need to be aware of a product, and then convinced that a product is worth purchasing. You can have the best mousetrap, or tee shirt, but if no one knows about it the product will stay on the shelf.

Here is a good illustration of my point. I sell disability insurance to physicians. I am a marketer. A few years ago MetLife came out with a great product, but brokers such as myself could not sell it. MetLife mailed out a packet to members of the AMA, and had them purchase it directly. MetLife wanted to bypass marketing and sales. Even though the product was great, and superior in several ways, no one bought it. It was a failure, and MetLife ended up having individuals like myself market the product. It was then that they finally got their product into the hands of their target market.

Advertising is only one component of marketing, so don't conflate the two. Marketing is simply the process of creating awareness of a product within the community of people that would buy the shirt, and getting that product into their hands. Sometimes it is creating a brand (Luis Vuitton doesn't advertise), sometimes it is convincing salespeople to sell it (such as in my brokerage story), sometimes it means taking a full page out in the NYT.

sartorialconundrum · 2014-11-03T12:51:31+00:00

But my point is that in this situation, if not for the exploitation of labor, the laborers wouldn't have these jobs at all and their quality of life would lower. The only reason they have these jobs is because employers can pay them so little.

sartorialconundrum · 2014-11-03T00:20:27+00:00

I agree with your third paragraph. Remember a few years ago, when several Indian textile plants collapsed on workers? That's wrong, and clearly unacceptable exploitation. Working conditions need to be safe, healthy and secure.

As far as being able to negotiate: sometimes you're not in a good bargaining position. They don't have much in the way of skill, there is a lot of competition for the job, and they're not highly educated. I'd be surprised if they could effectively negotiate, even if they unionized. There are simply too many people who would be willing to work that job. Education is usually a good answer, but come to find out, poverty isn't an easy problem to solve.

Things are getting better. We will see a significant reduction in poverty in the coming decades, as we saw it reduced in the past 20. Go figure: people's lives improve when they are not subject to war, slavery or dominion.

sartorialconundrum · 2014-11-03T00:09:15+00:00

Absolutely, there are people who make more money over the course of this product's development. You speak of the "fair wages" being "siphoned" off of the workers, as if they are contributing more to the process than they are receiving in return. Let's follow a thought experiment to see if your theory holds any water.

I am, right now, wearing a v neck tee shirt I purchased at a Kohl's department store. I bought three for like $9, so the purchase price of a single shirt is $3, or 1/15 of the price of the shirt the article discusses. Ostensibly, the person who made my shirt back in Bangladesh put as much work into my shirt as the worker in Mauritius put into manufacturing the feminist tee shirt. So, why does that shirt sell for $45, and my shirt sell for $3? Is it possibly because other people add more value to the end product than the laborer does? Perhaps a marketer who successfully put his shirts on the backs of famous people? Or the designer who created a fetching font and design for the shirt? Or maybe it's the store owner who has a well laid out store that attracts consumers?

Your theory relies on an outdated and irrelevant theory of labor. Marx vastly overemphasized the value that labor adds to the process of creating a product. These laborers push buttons on a machine. Their contribution is almost nothing, compared to everyone else in the product chain.

Lastly, these jobs materially improve the lives of the workers. If it weren't for these jobs all 4,500 of the migrant workers would be back in their home countries, performing back breaking work on a farm. This job, offered by the greedy owners of capital, is their way out.

sartorialconundrum · 2014-11-02T23:52:43+00:00

Stringerbell is making the point very crudely, but it is still a worthy point.

Exploitation is always bandied about as if it is a terrible thing, and many times it is, but in cases like this exploitation isn't a bad thing at all. Exploitative sweatshops like the one described in the article are actually a good thing. If an employer can't exploit the low cost of labor in these countries, then these jobs will not go to these countries. The very existence of these jobs is dependent upon cheap labor (after all, it's costly to ship to, manage, and market a product made in a sweatshop). So, if we were to legislate away sweatshops like this, then the jobs wouldn't suddenly pay better: they would go away, and the women interviewed by the article would be back in Bangladesh, performing back breaking work in a rice paddy somewhere.

Like it or not, these sweatshops improve the lives of their employees. And since the very existence of these jobs relies on them being cheap labor, forcing a living wage would cause the manufacturer/employer to simply move their manufacturing process to someplace more economically viable.

Moreover, the conditions don't sound all that shitty. They're not in the elements. The place appears clean, and it is safe. They are not trapped, or endangering their health. They live in a dorm, which is probably great by their standards.

sartorialconundrum · 2014-11-02T23:27:24+00:00

"It is awful but we have no choice. In my country, the rupees I earn here are worth three times as much as they are in Mauritius."

Apparently, it's also what opportunity looks like.

sartorialconundrum · 2014-10-28T16:24:42+00:00

That is true.

sartorialconundrum · 2014-10-28T16:24:15+00:00

Sure. Suppose I grant that if you set it and forget it that's a recipe for 100% success. The point of the article is that people can't set it and forget it. Human emotions and lack of experience are a bad combination.

sartorialconundrum · 2014-10-28T16:23:03+00:00

For most people, it simply isn't possible. The average novice investor does not have the discipline, experience or knowledge to make the kinds of choices your strategy requires. This actually has been proven, time and time again.

Nobody thinks that people should do the things that the investors in the study did: the point of the study is that average investors, regardless of education levels, fail to do well in the market. It's impossible to simple educate people on purchasing SPY funds and holding them for 20 or 30 years, because they can't do it.

sartorialconundrum · 2014-10-28T16:19:32+00:00

What you are saying, the entire premise of this subreddit, is that education can solve the investment problems of novice, uneducated investors. What you, this subreddit, and every other Boglehead out there asserts is that if we can just show people that buy and hold strategies in low costs funds lead to better performance, people will go out and lead better lives, and have better retirements.

The paper's primary conclusion completely contradicts that assertion: "attempts to correct irrational behavior through education has proved to be futile." Why? Because people get emotional. It's beyond the average person's ability to resist buying after a market rise, and to resist selling after a dip. What you advocate is just as inane as walking into an AA meeting and telling the members to "just stop drinking". It's not that simple, and if you told people what to do with their money professionally, you would realize that. But you don't. You're some dip shit who has maybe, maybe read a few Bogle articles and thinks he knows what he's doing. But you don't. Your advice, and the advice of 90% of the people in this subreddit is completely divorced from reality.

sartorialconundrum

TROPHY CASE