Car maintenance and home equity

Messages
6,956
Location
Roanoke Virginia
Now's the time for you to begin saving toward that house and your future retirement. Making good money and limited expenses, the perfect combination for starting to build wealth early in life. I always considered buying tools more as an investment than an expense because I knew they were going to save me a lot more money than I'd paid for them. In your case good tools just allow you to be able to do your job easier and faster. Like everyone I hate to buy a special tool for something and may never need it again but if the tool is $25. and I'm saving $300. by repairing it myself that tool just made me $275.
Yeah I am saving for retirement too as I have an IRA. I want as little debt as possible.
 
Messages
18,508
Location
Michigan
I have a coworker, her previous car payment was $750 for a Honda Pilot Elite used let alone other bills; it gives you an idea if you don't know what you doing, cars will bite you in the rear end
Yep, this can be true as well.

Also seen this with folks with a rough go. Have a neighbor who had to pay a higher APR on her used car due to medical issue that messed up her credit. Not to mention a few extra bills because of that as well. Good news is that she is getting back on her feet, and has been saving quite a bit thanks to a newer and better job. I can hope things will only get better for her, as you never know what life might throw at you....
 
Messages
8,336
Location
North Carolina
I don’t own a house yet I still live with my parents so I spend all my money on tools and my cars lol. I make good money. $30 an hour sometimes more for road calls. And flat rate at the shop. I pay my insurance and everything for my car every other bit is mine to spend on what I want. Which usually is friends or tools or cars lol 😂 I don’t want much else.
I know someone else already said this, but start saving now. I'm 10 years behind and it is time I'll never get back. It's a lesson that costs a lot to learn later in life.

GME helped me make up some lost time - but I generally don't encourage gambling 🤣
 
Messages
989
Location
Florida

Same can be said for doing your own plumbing, electrical, carpentry, appliance repair, landscape maintenance, laundry, cooking, child care, heart surgery, and on and on. It does cost time, though. Sometimes scraped knuckles, anxiety, etc.. Some don't have the inclination or mentality to diy and would rather spend time off from their $50/hour job on leisure efforts vs. getting greasy.

One's own heart surgery, good one!
 
Messages
1,195
Location
The IL
Building wealth is less about what you earn and more about what you spend. I know people making over 6 figures that are living paycheck to paycheck and a schoolteacher that lives a financially secure, but less flamboyant life. Learn to tell the difference between wants and needs and spend accordingly. And if you can save $30 doing your own oil change or $20 a week by bringing your own lunch you will come out ahead. Live below your means and you will become financially secure.
A lot of teachers around here do live financially secure.......because they are making six figures, LOL.

But seriously, real estate isn't a good investment around here. But you need to live somewhere, so you may as well dump your money into your home, and you still need a car. I'd rather have a nicer home and a dumpy car - given the choice.

Yes, given the cost of shop labor, I'll try to do as much as I can at home. At least then I don't have to worry about what happened.
 
Messages
45
Location
Las Vegas, NV
Housing and transportation are the two biggest items in nearly everyone's budget. Keep those in check (below your means) and you'll do very well with saving money, which can be invested and can lead to wealth.

Notice I said "housing" - home ownership does not lead to wealth. It is a forced savings of paying down principal that works for most Americans. If you are disciplined enough to rent for less than owning, while investing the cash saved, you will do quite well. Plenty of people couldn't afford their mortgages and lost their home. That didn't help build "wealth". Live below your means, and you'll do much better than the average consumer.
Or, you could buy a house at historically low interest rates and have an asset that increases in value 3-10% each year, along with a deduction for the mortgage interest. Investment properties are even more compelling place to put your money - same mortgage interest deduction, long-term depreciation write-off, and positive cash flow courtesy of the tenants. There are few investments that perform better over the long-run than real estate. Renting a home is an option, sure, but you are just adding to someone else’s wealth.
 
Messages
6,525
Location
Los Gatos, CA
Car maintenance is one line item in a budget.

Just one. You can’t draw any conclusions on financial success by taking that one line item out of context.
Good point. By itself, it is one line item, but you may be able extrapolate the cost savings attitude to other aspects of one's life.
I drove used Hondas and Toyota PU trucks while the parking lot was full of gorgeous Beemers and Benzes.
And I bought a house in Silicon Valley. And I did as much of my own maintenance as possible. Just like you...

I guess it depends on the person. It also depends on dumb luck. No one knew what property values would do around here...
Heck, I lost $$ on one house, but that enabled me to buy the worst house in a much better neighborhood for a relatively low price.
Best dumb luck I ever had.
I have not seen any neighbors changing their own oil, even though we have curb side recycling...
 
Messages
6,171
Location
Santa Barbara, CA
Or, you could buy a house at historically low interest rates and have an asset that increases in value 3-10% each year, along with a deduction for the mortgage interest. Investment properties are even more compelling place to put your money - same mortgage interest deduction, long-term depreciation write-off, and positive cash flow courtesy of the tenants. There are few investments that perform better over the long-run than real estate. Renting a home is an option, sure, but you are just adding to someone else’s wealth.
The S&P500 is one of those that outperform real estate. You should know, Vegas had a horrible RE collapse. Stock market recovered much better.
Also being a landlord is a part-time job. Or you're stuck paying a management company a good bit of fees. I do wish we had the foresight to have bought some rental properties in Vegas at the bottom - but hindsight is 20/20.

The main reason that RE can outperform stocks - leverage. You put 20% down on a house vs 100% of that down payment in a stock market. In this comparison RE can outperform, but it is 5x leveraged at the start.

We happily refinanced to a 2.5% 30 yr a couple months back. I'm not afraid of long-term debt when it is that cheap. No rush to pay it off, that's for sure. But we're also not running around trying to buy RE for renting/investing - that is a separate job that I don't have the time and skills for, let alone in our area where it would not be cash flow positive. Way too expensive here for a new individual to start in RE investing.

100% increase in average US housing price - that sounds amazing! S&P was up 131% over the same period and you'd have a much better diversified risk (vs a single home).
If you can't afford to purchase a home and invest - many choose the home. Its societal. The American Dream. Etc. It may or may not be the better path financially, though.
 
Messages
1,212
Life certainly is a journey, you will make lots of mistakes but learn from them and always try to make the very best decisions you can.

When I was young I managed to stay living at home as long as I could and saved...moved out at 24 and bought my first house with a 30,000 dollar down payment (right before prices really sky rocketed). It takes some common sense...I remember when I bought that house the realtor said we could move in and enjoy ourselves three months earlier than we planned. My father-in-law thought it was a great idea! I didn't. Staying at home for those three months allowed me to save an additional 6k by not paying a mortgage or insurance/taxes and I was able to apply that money to the house.

A year after we moved in we purchased a brand new Honda Accord - a dumb move we were told - but I kept that car 17 years and 289,000 miles later. the thing was payed off in three years...I didn't have a car payment for 14 years and I was able to sock away $70,000 grand while also paying off my mortgage 20 years early.

I then put that money down on another house, rented my first house out and stayed there for 12 years while someone else basically was paying for it through $2,000 a month rent payments. Sold that house, took my $350,000 in equity and dumped it into an undervalued $1,000,000 dollar house (that I payed $830,000 for) but at only 2% interest for a 30 year mortgage.

I'll fix it up and try to dump it in 5 years for hopefully 1.2 million (or I'll lose my shirt). But that's life. Lessons learned. Calculating risk and having as much enjoyment as you possibly can. I still have that first house...initially paid 160k for it, it's worth 450k now and I've collected rent off it for 12 years.

Bottom line...I can lose everything and drop dead by the time I'm done typing this, but hopefully I'll make the best possible decision I can before I hit the floor.
 
Messages
1,640
Location
California
With all major purchases, I look at the long-term as much as possible. Emotional decisions are to be avoided with big-dollar items. Even the Corvette was not really an emotional decision. I knew I wanted one, I knew exactly what I wanted, and I waited for the right one. Sure it's a luxury and some would argue that money spent on something I don't need is all wasted money (for purposes of this conversation). But I get value from it and I'm not dumping money into modifications that I'll never get back... so I can spend less money leaving it stock, and as a result I will get more for it stock when I eventually sell it. In the meantime it runs awesome and is very fun to drive.
My home... I bought it as-is, knowing it needs work. Much of that work I can do myself. For the other stuff, I know people who do that kind of work and can give me a deal on the job. Pizza and beer go a long way :D
 
Messages
57
I don’t own a house yet I still live with my parents so I spend all my money on tools and my cars lol. I make good money. $30 an hour sometimes more for road calls. And flat rate at the shop. I pay my insurance and everything for my car every other bit is mine to spend on what I want. Which usually is friends or tools or cars lol 😂 I don’t want much else.
Where do you live to make 30 an hour?
 
Messages
17,021
Location
...
The only thing certain in life is death and taxes. No matter how much you plan or how clean you live, things may happen beyond your control.

I’ve done well. I have saved money by doing my own car and home maintenance. But I recently came to the conclusion that my climbing ladder days and crawling under the car days are over.

Fortunately, I can afford to have someone do those. So the planning and saving did help.
 
Messages
6,956
Location
Roanoke Virginia
How many years have you been doing it
3 years this April. Was working at a chain shop then I quit there after two weeks because of two reasons. Then I worked for Toyota dealership now I’m at independent. The independent is great I like learning all the different stuff and being treated like I’m worth unlike the other two places.
 
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