Wealth, income and affordability poll

[TESLAASTRO]

Originally Posted by ibeam81

No the AMT is not automatic, but once you exceed a certain threshold income (and the thresholds are fairly low) the taxpayer needs to compute their taxes using both the standard method and the AMT method (which removes many deductions). If the AMT amount is higher then you pay that amount. In general the AMT is triggered if you have a lot of deductions.

that is true, but from what I've read, certain deductions tend to trigger the AMT more than others....the ones i outlined on the previous post....

[TESLAASTRO]

Originally Posted by MPower

Opportunity cost is present in anything you do with your money. Also, there are no rules to say that you can not purchase a new car while investing. The only way that you have to do one or the other is if you throw all 30 grand out the window at once. That does not have to be the case.

That is true, one may spend a disproportianate amount of annual income on a car AND invest....the question is, how are you able to spend that much on a car, meet your monthly nut, and invest vigorously for important things?.....sure, you can do all of the above, but something has to give.......and that something is the amount saved, or foregoing a college fund for kids, or not keeping an emergency cash fund......I think my bottom line opinion is essentially dont f*** with your future just to buy a BMW.....if you can afford it , great.....

[TESLAASTRO]

Originally Posted by needanewcar

man waht do you guys do, making 150k+???

17 years of consulting......

[imported_MPower]

Originally Posted by TESLAASTRO

That is true, one may spend a disproportianate amount of annual income on a car AND invest....the question is, how are you able to spend that much on a car, meet your monthly nut, and invest vigorously for important things?.....sure, you can do all of the above, but something has to give.......and that something is the amount saved, or foregoing a college fund for kids, or not keeping an emergency cash fund......I think my bottom line opinion is essentially dont f*** with your future just to buy a BMW.....if you can afford it , great.....

Like I said, it depends greatly on what your monthly costs are. Your raw income means nothing if you costs are just as high. Therefore, it has much more to do with how the cost of the vehicle relates to your other costs. I can make 30 grand a year and if my costs are very low, I can afford to make monthly payments on a BMW, hypothetically speaking.

Personally, I would rather live for today than for tomorrow, but that is just a personal opinion.

[TESLAASTRO]

Originally Posted by MPower

Like I said, it depends greatly on what your monthly costs are. Your raw income means nothing if you costs are just as high. Therefore, it has much more to do with how the cost of the vehicle relates to your other costs. I can make 30 grand a year and if my costs are very low, I can afford to make monthly payments on a BMW, hypothetically speaking.

Personally, I would rather live for today than for tomorrow, but that is just a personal opinion.

IMO, if you had $0 expenses, buying a car equal to, or even half your gross annual income is tragic......IMO, I think 10 years from now, your "live for today" philosophy may change.....age, maturity, death of parents are some things that give one pause to ponder that"I'm not so bulletproof afterall"......

[MikeT]

Originally Posted by TESLAASTRO

except for the ring, i got her for free! wheres the best place to buy one nowadays?

I've heard good things about the Czech Republic. :biggrin:

Seriously, for most guys, marriage isn't really "free." Most women are high-maintenance. I get a kick out of that bumper sticker, "Driver carries no cash... He's married."

I'm a lawyer, and I write pre-nups (and, occasionally, post-nups). I can tell you that for most men getting married is anything but free. The alternative is to be a sort of gigolo and marry a woman who makes (or has inherited) big money. And I see those guys, too. For them, I guess that you could say that marriage is free or even a financial boon. On that other hand, those relationships often have their own unique problems.

[imported_MPower]

Originally Posted by TESLAASTRO

IMO, if you had $0 expenses, buying a car equal to, or even half your gross annual income is tragic......IMO, I think 10 years from now, your "live for today" philosophy may change.....age, maturity, death of parents are some things that give one pause to ponder that"I'm not so bulletproof afterall"......

That is certainly a respectful opinion and you are correct in saying so.

As we agreed, though, because you can finance a car and still invest in others, means that you can purchase a car without committing financial suicide. Personally, I sold my Mazda, put used some of the earnings for a down payment on my MINI, and then invested the rest. I have a nice low monthly payment that I can easily afford, while investing thousands in a number of different entities. Sure, it is not as much as I would invest if I followed your strategy but I am willing to take that small chance to enjoy what I can now.

[TESLAASTRO]

Originally Posted by MikeT

I've heard good things about the Czech Republic. :biggrin:

Seriously, for most guys, marriage isn't really "free." Most women are high-maintenance. I get a kick out of that bumper sticker, "Driver carries no cash... He's married."

I'm a lawyer, and I write pre-nups (and, occasionally, post-nups). I can tell you that for most men getting married is anything but free. The alternative is to be a sort of gigolo and marry a woman who makes (or has inherited) big money. And I see those guys, too. For them, I guess that you could say that marriage is free or even a financial boon. On that other hand, those relationships often have their own unique problems.

oh man you're cynical.....I guess it comes with the job?...

BTW, I think Czech women are super hot- Prague is on my top 10 list to visit before I die places....

[kamakazitp]

Originally Posted by TESLAASTRO

you're very defensive, and wasnt referring to you or your situation, but if it applies?...heres an analogy.......prior to the subprime mortgage debacle that coincided with the housing boom, legitimate lenders(ie banks, not the vampires) required that you provide documentation of your income and used a strict standardized % of your gross income to prove affordability, and thus approval......these standards were based on economic data, very similar to actuarial tables.... one's membership to Netflix, their cell bills et al was superfluous, and not used to calculate affordability......the data was based on well researched, accurate HISTORICAL information ...the same is true for autos, which, besides housing, is typically the largest expense one has...statistical data regarding affordability of autos is there....check out bankrate.com..I didnt just pull a figure out of my a**....this is well researched stuff....those who spend 50% of their gross annual income on a car CANNOT live large now AND later...bottom line is that little angel on a person's shoulder should advise them what they can afford i.e common sense.....and by the way, I really could care less what people do with their money, but I write the sobering facts....

BTW, IMO you should be putting 4k into a Roth as well every year.....

I actually agree with you on everything. Except I don't think that what we do should be law, nor do I attempt to educate the masses. Hey, the more people that blow all their money now on a car they can't really afford means less competition for the house I'm saving for. :smile:

I might hit you up for some financial advise. You appear very well versed. I'm no scrub, but I could definitely learn a lot more.

[Brandon26pdx]

Starting in 08 you can actually put up to 5k/yr into your roth.

[ibeam81]

Originally Posted by MPower

That is certainly a respectful opinion and you are correct in saying so.

As we agreed, though, because you can finance a car and still invest in others, means that you can purchase a car without committing financial suicide. Personally, I sold my Mazda, put used some of the earnings for a down payment on my MINI, and then invested the rest. I have a nice low monthly payment that I can easily afford, while investing thousands in a number of different entities. Sure, it is not as much as I would invest if I followed your strategy but I am willing to take that small chance to enjoy what I can now.

As with so much in life it's about balance. There are plenty of stories about millionaires living in shacks like paupers. That doesn't sound too appealing to me. On the other hand there are people that live well beyond their means by overextending their credit or living off their home equity. That sounds equally unappealing to me. YMMV.

[TESLAASTRO]

Originally Posted by kamakazitp

I actually agree with you on everything. Except I don't think that what we do should be law, nor do I attempt to educate the masses. Hey, the more people that blow all their money now on a car they can't really afford means less competition for the house I'm saving for. :smile:

I might hit you up for some financial advise. You appear very well versed. I'm no scrub, but I could definitely learn a lot more.

You have a point about what is law and what is choice....One law that is universal: Time waits for no one.....

....I am by no means a sophisticated investor.....I do however overwhelmingly recommend Vanguard, which is just a fabulous company.... and particularly the Target Retirement 2045 Fund, which is a fund of index funds, broadly diversified with total stock market, bond, and international funds, which automatically adjusts to more conservative %s as you get older...just like that oven, set it and forget it...also, their prime Money Market is a great place to park cash @ 5%...you can write checks with it for over $250.00 as well....I have no time or inclination to buy individual stocks.....

as for the house, do all you can to buy in this current slump...I think it is unprecedented because of the subprime debacle- there is an excess of inventory now that hasnt been seen in 25 years...people are desperate to get out of homes they cant afford....both owner and listing agent will do many attractive things to sell now, like paying your closing costs...you can literally buy a home now and perhaps make as much as 50% on your investment within a few years as the market rebounds....home equity is like gold, and a building block for true wealth.....

[Smokey]

Originally Posted by needanewcar

man waht do you guys do, making 150k+???

Am an attorney.

[TESLAASTRO]

Originally Posted by ibeam81

As with so much in life it's about balance. There are plenty of stories about millionaires living in shacks like paupers.

True.....the town I live in is rife with Mcmansions and the requisite German luxury car in the driveway...you walk inside and BAM, no furniture....you'd think you were at the Grand Canyon with that echo......we call it "house poor"......shameful

[CAW_135]

Originally Posted by TESLAASTRO

BTW, I think Czech women are super hot- Prague is on my top 10 list to visit before I die places....

You got this one right. I was there for a conference earlier this year and the city is almost as beautiful as its women. I would def recommend going there along with some other great places in the CR.

[TESLAASTRO]

Originally Posted by CAW_135

You got this one right. I was there for a conference earlier this year and the city is almost as beautiful as its women. I would def recommend going there along with some other great places in the CR.

I cant wait.....

[imported_MPower]

Originally Posted by ibeam81

As with so much in life it's about balance. There are plenty of stories about millionaires living in shacks like paupers. That doesn't sound too appealing to me. On the other hand there are people that live well beyond their means by overextending their credit or living off their home equity. That sounds equally unappealing to me. YMMV.

In my experience the rich watch each penny more closely than anyone else. Personally, I never want money to be a reason for not doing something I desperately want to do. You are absolutely correct and I like to think I have found a balance that works for me. It may not work for others.

On a side note, with respect to people overextending themselves on credit, I yearn for the day when the front page of the journal does not use the term "credit woes" with respect to the Dow losing 360 points in a day. But that may just be a dream...

[bavarianbutcher]

Bottom line, If the marginal utility of owning one more of good 'x' (1er) is higher than owning one more of good 'y' (bigger house/ more to look after) therefore increasing total utility, than SO BE IT!

I loved Prague, VERY beautiful. espescially at night naturally! just keep your wallet close or you will lose it! But honestly I had more fun at the Hofbrauhaus back in Munich :drinking:.

[ibeam81]

Originally Posted by TESLAASTRO

BTW, I think Czech women are super hot- Prague is on my top 10 list to visit before I die places....

Make sure that you skip the movie Hostel then. It will definitely turn you off from Czech women. Beautiful yes, but also into some seriously sick hobbies.

And yes I realize that it was just a movie and that it portrayed Slovakia. But it was filmed in the Czech Republic, although I'm sure that it hasn't earned many friends in either country.

Anyway I digress. From all that I've heard, Prague is wonderful as are the women. I have some friends who have lived there and hated to leave. It's on my list of places to visit as well.

[kere]

Originally Posted by TESLAASTRO

60 is the new 40.....besides, you Finnish folks eat alot of omega 3s and bathe in those great hot springs.....youll never be 'old and tired'......youll live to be 120....of course youll have to eat dog food and pull your teeth out with pliers.....but hey, you had a beeeeeeeeeemer when you were 24....

I don't quite understand why I shouldn't get one if I can afford it.
Should I just save more money so I can die rich?
Hot springs...:biggrin:
And yes, eastern European women are hot!

[ARES45]

Originally Posted by TESLAASTRO

IMO, if you had $0 expenses, buying a car equal to, or even half your gross annual income is tragic......IMO, I think 10 years from now, your "live for today" philosophy may change.....age, maturity, death of parents are some things that give one pause to ponder that"I'm not so bulletproof afterall"......

I had to laugh at this one because of the irony that pertains to me. I 'live for today' or try to because I know I am not bulletproof and neither is the tail rotor.

[ibeam81]

Originally Posted by ARES45

I had to laugh at this one because of the irony that pertains to me. I 'live for today' or try to because I know I am not bulletproof and neither is the tail rotor.

I can relate. When I was in the service I had a similar mentality. I was living so well that friends and neighbors thought that I was selling drugs on the side. One fellow officer even asked if my Mom bought me my BMW. My only regret is that I didn't hang onto that BMW.