I have really enjoyed this thread...some great points of views really. I built my first house when I was 20 with a 740 credit score and got married the same year. I have always had a love affair with cars since I was a kid, so I have a lot of car dreams to fulfill. I have had a supra twin turbo and rx7 twin turbo that had bought with cash, and now have sold(both for profit). I just turned 26, been married for 5 years, have an 18 month old son and our second and final on the way in May 2010. I have a a 4 year degree (which I really don't use) and have been making well into the low 6 figures since I was 22 (legally). I have money in the bank, max 401k as well as trade on the market and I only owe on my house at 4% and my wife's 2006 Cayenne that we bought for 24k a year ago used at 3.9%. Zero debt otherwise.

I am not trying to be "all that", but I am very proud of myself for not getting crazy and just jumping in head first and doing it right from the start. I believe paying cash for a car is the dumbest thing you can do, especially with rates around of 1.9-3.9% and certain markets returning 6-16%

I do struggle with getting a new car though once in awhile because a part of me wants to enjoy these things when I am young and healthy instead of waiting till I am 50+ like everyone else....

Honestly, most people you think are "rich" are up to their eyeballs in debt just trying to float an image they can't afford...go read Rich Dad Poor Dad...I don't agree with absolutely everything in it, but there is a lot that can change you. For me personally, if you are going to be a doctor, it better be because of passion because there are WAY TOO MANY ways to make way more money in a fraction of the time with no debt attached.

Trev

 

Not always true...I have bought and sold a few cars in the last 5 months and made 10k profit...

 

I was making well into the low 6 figures starting at 21 years old NOT using my degree whatsoever...so many naive people out there that think education is the only way...what a joke. All it takes is some brains and a little business sense. And no, this has nothing to do with drugs or schemes or cheating the IRS.

Trev

 

You make it sound so simple. Elaborate please.

 

Its actually not that bad, what I am doing now has nothing to do with my degree but it makes a hell lot more

A good example would be back in the days of myspace, some girl who's 17 and knew some HTML was making simple HTML template for myspace. Each took about an hour to make, and allows people to customize it by changing color or images.

All she had was a simple site, with boxes for people to copy the the codes and paste it into their myspace. With a little business sense she was making 70k a month alone in advertising when myspace got bigger and bigger.

You don't need a business degree or computer science knowledge for something like that

Same is applicable for a lot of other businesses, but its hard to explain unless you have a bit of knowledge in each field first. However, that "bit" of knowledge is basically an interest in that field + a week or two of research and reading about that industry, that's all it takes.

 

I will agree there. However, the percent of people who have the business sense naturally is very low and they need the education to succeed in life. In no way am I saying education is not essential to live a good life. I myself am young, and Id like to think doing good so far. I have no post secondary. Everything that I have made for myself has come from skills Ive self educated myself on. With that said, the majority of people may not have the ability for thorough self education accompanied by success.

 

Yes, a few people make large amounts of money in situations like this. There are plenty of people in the world with brains and business sense...but not making close to six figures.

 

Well business sense also includes marketing, I am not sure if you heard of pet rocks, but someone made millions selling rocks.. literally.

Also, for every one like her, there are thousands who provided the same service but didn't market themselves successfully or even thought of making money from it. Business sense is a little more than the daily operations, a lot goes into proper marketing too.

To be honest, for 1 for 1, for the same effort, you can make as much if not a little bit more than what you do for a 9-5 job (for most people). A little bit more effort and smarts and you can make much more.

I will sum it in 3 parts. Give it some thoughts, not all ideas will fly, but you will be surprised by what you can do

Fine what you like to do, and do well in.

Find a way to take what you do, and make it into a direct benefit for other people.

Convince consumer and business why it benefits them.

 

I have a feeling he flips cars.

 

To the OP - it's really more of a personal choice.

If you honestly assess the true cost of ownership, realistically consider how long you'll own it and what the resale (or insured) value would be along the way, then you shouldn't be getting any "surprises".

If you own your house outright, well, that's the big one right there. Aside from other living expenses, the most important factors are:

1. Lifestyle (this includes your car)
2. Retirement/Investment

All it takes is to sort those out logically and not "over-extend".

Your Lifestyle costs are an investment in your HAPPYNESS. You basically go into it knowing that it's money spent. Gone forever.

But it's essential. Don't waste your life away saving, saving and saving. Before you know it, you're old - and then what?

What I've found is that making the big bucks vs. making a decent income doesn't really change anything in terms of lifestyle, unless you're caught in the "Jones" cycle. (In which case a bigger income potentially equals bigger debt, because the banks will lend you more and more, etc.)

If you can strike a balance where you can live a great life full of adventure and satisfaction while simultaneously building assets and investments for future (or even present) returns - that is ideal.

It does take compromise and a bit of thinking.

But in essence, it is simple.

And it's very possible...

I'm 25 and I own my Porsche 996TT outright. No debt. I also own 3 houses, all of which are cash flow positive. As a result, my wife and I actually live "for free", as in our mortgage and housing costs are already covered each month even before taking into account our incomes, etc.

On top of that, we've travelled every continent and have a great lifestyle - but not one that's "showy" or pretentious. All of our friends with the exception of a few are "working folk".

And like 99% of the other young guys with cars like this - I don't sell drugs, either.

I'm an internet marketer who's been at it since I was 19. Took a long time to get stuff going. I had ZERO help from anyone and started from nothing.

By the time I was 23 I was earning 6 figures.

The way things are going these days, it won't be long until I'm in the 7 figure bracket.

But what's funny is that by the time it's all said and done (and taxes are paid)... it honestly doesn't make that much of a difference. Life goes on.

Making "real" money ($500k+) feels just the same as making a good income, like $100K/yr.

It all depends on YOUR choices.

Not what other people think. So if you can swing it without over-extending, go for it!

Cheers,

-Chris

 

I would refrain from implying I am naive. I simply asked the guy to map out how he paid $150k in cash for a car by 22. He claimed he made a normal income (while living with his parents) and came from a poor family, and I stated it didn't pencil. weeks later, he's yet to quantify it. either he's lying about how hard he had it, or he downplayed his income, or he's lying about both.

I know plenty of guys making big money at a young age, with and without degrees. but the situation described above does not add up.

 

Indeed, it is possible, but for that you must have a dealer's license!

 

Actually, in my state, an individual can buy and sell 12 cars per calender year.

 

I hope I do not get hate mail from Auctung, but I did hear it is possible he had some family 'help' in getting these cars

 

I can't really agree on you about properties... maybe I live in HK where house prices just continued to sky rocket for the past few years. If I were to sell ALL my properties now, I'm pretty sure the "profit" on the statement sheet is enough for me to purchase a Veyron.... my properties are netting me 7-8% yearly, its much better then putting the money in the bank.


But I can tell you, a wife is a bigger money pit then a house thats for sure, at least for were I live LOL
I'd already gotten an LP560 if she isnt such a shopaholic
the last diamond ring I brought her cost exactly half as much as an Gallardo