More than 80% of Americans can't afford a new car

[Hermann]

Not only can't 80% of Americans afford a new car. If said car had a flat and needed a tow to a tire shop they probably don't have the funds available to pay for it. AKA living paycheck to paycheck, never putting back even a couple % for a emergency fund. My lady friend lives this way and has 10 days to go till the SS check and she is already broke this month. Her very part time job gives her a fifty bucks every week.

 

[CKN]

There are a lot of these threads, yes, but I still think it is a relevant topic that applies to much of our society. As an example, I'm 33 years old with zero debt, my own side business, established in my career, etc. I believe new cars are too expensive and not a good value, but if I wanted a new car I could go out and buy it. In the dating market, many of the women my age or younger that I have gone on dates with are buried and I mean BURIED in debt. Six figure student loans, car payments, credit card debt, paying rent, etc, which is how a majority of America lives. Being debt free and not living week to week isn't the norm.

Student loans are another whole issue. Student loans were originally intended solely to get you through school. In the last several years-college students have used them to subsidize whatever lifestyle they wished to have. You are entitled to believe whatever you want about new cars-however bashing them (not talking about you specifically) just because (some feel) they are too expensive-or because (as you can tell by others) they are frustrated because they can't replace their beaters (used car prices directly correlate to new) is a whole other thought process.

But we disagree that these threads continue to serve any purpose. They are the same over and over again-with slight variation on the comments.

Repetitious really.

 

[Astro14]

I was highly leveraged with RENTAL REAL ESTATE.-with multiple mortgages. The rents always made the payments. That real estate is now paid for and provides retirement income.IF I would have listened to him-I would have to save up to pay cash for those properties-while at the same time watching them appreciate far more than I would have been able to save the cash.

So yea.

Leverage works both ways.

So, you took a big risk and it worked out. But in rough economic times, or the confluence of multiple factors, when things push that lever the other way, it can wipe you out.

A good friend followed that route. There was one month, when he had several mortgages due, and no tenants, due to renovations, marketing, and other factors. He was stuck.

While his wife was in the hospital (benign brain tumor) he sold her brand new Jeep to raise the cash. As he rolled her out to their “new”, baby blue 100,000 mile used Taurus, even through the haze of post op, she asked, “Pete, where’s my Jeep….”

He is now a multimillionaire.

The result of thoughtful leverage. But there were many times when the leverage was a force against him, leverage is not without risk.

 

[CKN]

Not only can't 80% of Americans afford a new car. If said car had a flat and needed a tow to a tire shop they probably don't have the funds available to pay for it. AKA living paycheck to paycheck, never putting back even a couple % for a emergency fund. My lady friend lives this way and has 10 days to go till the SS check and she is already broke this month. Her very part time job gives her a fifty bucks every week.

Sounds like she needs another job to make more money within what ever the Social Security parameters lets her.

 

[Hermann]

Sounds like she needs another job to make more money within what ever the Social Security parameters lets her.

She does but she would still be broke all the time. 3 children, 8 grandchildren, and 3 great grandchildren. She wastes $200 a month on the Bottled Starbucks coffee. It is the way she has lived for 55 years and there is no need to try to change her. If she had some spare cash her kids and grandkids would milk her dry. They live the same way she does.

 

[supton]

She does but she would still be broke all the time. 3 children, 8 grandchildren, and 3 great grandchildren. She wastes $200 a month on the Bottled Starbucks coffee. It is the way she has lived for 55 years and there is no need to try to change her.

Sounds like the way it is then. As long as she stays a friend (and nothing more), then who gives a rip. She can suffer her own consequences.

You are correct, a great deal have nothing saved and live just for the moment. Those who did the rental route, got huge leverage--did so with a plan in mind. The average American, not so much. Their sight line doesn't extend beyond the next paycheck, let alone all the way to retirement.

 

[GMFan]

Hell of a risk taken to get there—had tenants been bad during those early years I bet the tune would be different. But you got past some tipping point and then any bad apples would be outweighed by the good ones.

Not a risk I could handle. Not something that I’d bet most could either.

Imagine being in that situation during the virus lockdowns and rent moratoriums. Im glad it works out for some but life is unpredictable and there is peace inside when you aren’t in debt or leveraged. High risk high reward, but also high stress!

 

[Hermann]

Sounds like the way it is then. As long as she stays a friend (and nothing more), then who gives a rip. She can suffer her own consequences.

You are correct, a great deal have nothing saved and live just for the moment. Those who did the rental route, got huge leverage--did so with a plan in mind. The average American, not so much. Their sight line doesn't extend beyond the next paycheck, let alone all the way to retirement.

At age 70 or so neither of us is in the going thru the romance/relationship thing again. She has never divorced her previous husband who is in prison. If I told you about her life, BITOG would run out of bandwidth. Karen and I have lots of things we like to do together. We get together a couple times of week and go on DDA's. Stands for Dan's Driving Adventures. Which can be anything from Mini Golf to a Chinese Buffet that actually had hot food and hot plates yesterday. Yes I found one.

 

[Astro14]

At age 70 or so neither of us is in the going thru the romance/relationship thing again. She has never divorced her previous husband who is in prison. If I told you about her life, BITOG would run out of bandwidth. Karen and I have lots of things we like to do together. We get together a couple times of week and go on DDA's. Stands for Dan's Driving Adventures. Which can be anything from Mini Golf to a Chinese Buffet that actually had hot food and hot plates yesterday. Yes I found one.

So…you got a girlfriend. Sounds like it’s working for both of you, which is great.

 

[JeffKeryk]

Imagine being in that situation during the virus lockdowns and rent moratoriums. Im glad it works out for some but life is unpredictable and there is peace inside when you aren’t in debt or leveraged. High risk high reward, but also high stress!

Debt scares the you-know-what outta me.

 

[thastinger]

I read a piece a number of years ago that said if you had no debt and a 20 dollar bill in your pocket, you were in the upper half of net worth.
I'm sure we all know peeps that make 400k and live paycheck to paycheck, and we all peeps that don't make a lot of money but can pay for an emergent repair in cash.

 

[pbm]

I was highly leveraged with RENTAL REAL ESTATE.-with multiple mortgages. The rents always made the payments. That real estate is now paid for and provides retirement income.IF I would have listened to him-I would have to save up to pay cash for those properties-while at the same time watching them appreciate far more than I would have been able to save the cash.

So yea.

In many parts of the country landlords aren't getting their rents and the deadbeat renters are being protected by the courts (can't evict them without a lengthy process). Many landlords choose to rent to Section 8 people because they know they'll get their rent from Uncle Sam....aka the taxpayers.

 

[CKN]

In many parts of the country landlords aren't getting their rents and the deadbeat renters are being protected by the courts (can't evict them without a lengthy process). Many landlords choose to rent to Section 8 people because they know they'll get their rent from Uncle Sam....aka the taxpayers.

You don't let dead beats rent from you. Yes-you do significant back ground screening and it greatly reduces your chances of deadbeats. And significant security and other deposits.

You can always make excuse for not taking risks.....

 

[thastinger]

Leverage works both ways.

So, you took a big risk and it worked out. But in rough economic times, or the confluence of multiple factors, when things push that lever the other way, it can wipe you out.

A good friend followed that route. There was one month, when he had several mortgages due, and no tenants, due to renovations, marketing, and other factors. He was stuck.

While his wife was in the hospital (benign brain tumor) he sold her brand new Jeep to raise the cash. As he rolled her out to their “new”, baby blue 100,000 mile used Taurus, even through the haze of post op, she asked, “Pete, where’s my Jeep….”

He is now a multimillionaire.

The result of thoughtful leverage. But there were many times when the leverage was a force against him, leverage is not without risk.

We will have to agree to disagree on this issue. Absentee landlords are the scourge of America, they destroy neighborhoods, their only criteria is payment(don't care where it comes from). My part time job is picking up trash from the 4 rentals that surround me. Not a single renter nor landlord sprays for weeds, plants grass of repairs ANYTHING that the city doesn't MAKE them do. Renters don't care, no vested interest or ownership because they view it as "temporary" even if they live there for 6 years.

 

[CKN]

We will have to agree to disagree on this issue. Absentee landlords are the scourge of America, they destroy neighborhoods, their only criteria is payment(don't care where it comes from). My part time job is picking up trash from the 4 rentals that surround me. Not a single renter nor landlord sprays for weeds, plants grass of repairs ANYTHING that the city doesn't MAKE them do. Renters don't care, no vested interest or ownership because they view it as "temporary" even if they live there for 6 years.

Real Estate is one of the few ways an "ordinary man" can create wealth. FYI.

 

[supton]

I read a piece a number of years ago that said if you had no debt and a 20 dollar bill in your pocket, you were in the upper half of net worth.
I'm sure we all know peeps that make 400k and live paycheck to paycheck, and we all peeps that don't make a lot of money but can pay for an emergent repair in cash.

I watched a youtube vid the other day about net worth.


The Census Buruea uses quintiles (20% blocks) to define poor, lower middle, middle, upper middle and upper classes, using net worth. Net worth is one way to measure things, maybe one has a different way to measure it, and of course, for many, most of their money is locked into retirement funds and such value is not liquid.

To avoid watching the video: from 2020 data

• Lowest 20%
  • median net worth: $6,030
  • median income: $27k
• Next 20%: lower middle class
  • median net worth: $3,760
  • median income: $48,500
• Next 20%: middle class
  • median net worth: $104,700
  • median income: $71k
• Next 20%: upper middle class
  • median net worth: $201,800
  • median income: $125k
• Next 20%: upper class
  • median net worth: $608,900
  • median income: $187k
  • note, he says this income is from 7 years ago (?) then inflates it to $237k, so I'm starting to think, as I rewatch this, that this data needs to be vetted.

Poverty line is at $35,801? he mentions that briefly.

As for globally: making this per day (odd to move from net worth to income, but that's what the video does) is another way to rank things. So perhaps you are correct, if you have $20 in your pocket, you're doing better than half the world.

*

After rewatching the video, I picked up some things that made me question some remarks, so I wondered about going direct to the Census Bureau, and found this link. It says for 2021 using... 2022 data. Close enough?

I think we've all seen the stat that something like 40% of Americans couldn't cough up $1k to deal with an unexpected expense, so perhaps net worth isn't a great measure of "wealth", maybe something like net worth and liquidity of assets, I dunno.

 

[ATex7239]

BITOG: where other people’s finances are none of your business, unless you disagree with the choices…

 

[supton]

BITOG: where other people’s finances are none of your business, unless you disagree with the choices…

Problem is, other people's choices have a nasty tendency to impact us. When it doesn't, we don't care (might have an opinion, but content to not state it). But when it does... Someone on the other coast wants to burn car tires to heat their home in winter, no impact to me. My neighbor starts to do that, and suddenly my opinion is much different.

As a larger percentage live outside their means, a larger percentage will start to vote for those who might make promises that others may not care to fund. Not sure I state beyond that.

Anyhow. Discussion forum. We discuss things. Not much to discuss when we're all in agreement. When there's a disagreement, now a great deal of electrons are bound to get displaced, much how, if we were to be in the room, a great deal of hot air may get generated. It's just what people do, discuss things.

 

[Hermann]

So…you got a girlfriend. Sounds like it’s working for both of you, which is great.

Thanks, it seems to be.

 

[pbm]

You don't let dead beats rent from you. Yes-you do significant back ground screening and it greatly reduces your chances of deadbeats. And significant security and other deposits.

You can always make excuse for not taking risks.....

Apparently Utah and New York have different people.