For what its worth, even though you come away with 65% or so of gross, all things are relative and 100k is a good salary these days. Not rich, but good. I would say 80k is a good salary. 60k is probably not bad, either. As a general rule I'd say any of those salaries could comfortably afford an entry level Lexus, but a lot of that depends on total prior financial commitments, etc. Even though you're paying your 35% or so worth of taxes, if you did not pay those you would not have roads to drive on or an infrastructure to support vehicles in the first place. These things are expensive and something has to pay for it.

As I said all things are relative. Even if you got a Scion or Toyota as your next car, you've got a nice ride. Even entry level cars these days have so much more features, comfort and performance than cars at the same relative level once upon a time that it's not even funny. Plus, your ability to find a mate is not as dependent on the hotness of your ride like it was 25 years or so ago

True story, my very first car was a Porsche 924 (used). This was one hot looking ride back in the 80's, and it had the effect on my social life that I wanted it to back in the cheesy 80s. It wasn't fast... it didn't need to go fast because most of the time it was pulled over on some dark mountain road with me and my head up some girls skirt What people didn't realize is that I paid two thousand (yes, the same price most people are willing to pay for a built in nav system these days). Over time I put maybe another 1.5k into it, including after market spoiler/front lip, various other mods and an Alpine stereo system (all the rage at the time). By the time I got done, it looked like a $20k car which was unheard of for my age at the time. Nobody knew it had over 100k miles before I bought it, had a tendancy to overheat in cruising traffic, had NO AIR CONDITIONING (can the current generation even fathom that?), and snapped alternator brackets randomly like potato chips. Didn't matter, it got the job done You don't have to spend beyond your means to have a nice car.

 

I don't mean to foil your plan, but have you ever actually walked into a place that is 877 square feet? That's about the size of two bathrooms to many people. Can you raise a family in that space? I'd consider 1200 sqft a minimum for 2 people. Add about 300 sqft per kid you plan to have.

As I said I am not trying to bum you out in any way, you seem like a conscientious young guy to me in many ways and I think you will do alright overall. But even with the tiny condo, by your calculations you need $11,000 down. How are you going to save that with your credit card debt? Also remember the interest rate (which affects your monthly payment more than anything) is completely dependent on one thing: YOUR DEBT TO INCOME RATIO. This means you gotta clear the debt before your plan will work. If you have bad credit, you'll need to repair it or the bank will fleece you (and so will your car insurance rates).

Debt to income ratio is the key, and the reason I expressed my last advice as a percentage of gross income.

No worries, the cogs are turning (I can see that) and you're thinking about all of this which is really all I wanted to accomplish. You'll be fine if you keep learning.

 

First, Toyota hasn't made a RWD car in years... the MR2 Spyder was the last one and they killed that a while back... other than that the last RWD car they made was the Supra, which they stopped selling in the US in the 98 model year. All their cars are FWD. (which is the reason I don't even consider a new toyota when looking for a car to buy)

Lexus on the other hand, sells the IS, GS, LS, and SC which are all RWD. (well, technically they're killing the SC, but you can still find em on lots)


Anyway... as to your calculations once again you left a lot out:


Yeah, there's taxes and homeowners insurance, but there's also PMI... which is mortgage insurance you pay if you put less than 20% down (which is what you're doing)... there's also usually condo fees usually associated with a place like that (which covers maintaining the common areas and such)... then there's actual repairs on the place...it was built in 92 so it's nearly 20 years old now... how old is the AC unit? the water heater? You already got furniture for the place I hope?




The "don't know what else" is the problem.

Utilities are not part of your mortgage.

You're essentially putting almost 20% of your net income into your car. Cable, internet, electricity, water, gas (if it has gas) is gonna run you a few hundred... food at least 300-400 more... oh, and you haven't put any gas in your nice new car yet, or paid insurance or registration on it. Or set aside any money for oil changes, new tires, etc...

And this assumes you paid off that 29% interest credit card already too... and any other debt you'd have to make payments on.


Or you'll get the car repossessed the first time one unexpected expense comes up because you're barely able to afford to fuel the thing in the first place.


Sure, that'd make things considerably easier. Waiting till after the wedding might be a smarter idea though.... and with a wife you'll probably want someplace bigger than 877 square feet. (and that assumes she comes into things with none of her own debt or expenses...)


Also working against you- Your credit score sucks.

How do I know? You had a car repoed already, and you've got a 29% interest card from missing payments.

Which means your mortgage, if they will even give you one, because that's a lot tougher these days, won't have the best interest rate. Neither would your car loan for that matter.



FWIW... I paid cash for my new IS350. I live in a house roughly 2.5-3 times the size of the condo you're looking at, and have a fair bit of equity in it already even with the down real estate market. And it's not like I'm making 600k a year either. I make good money, as does my wife, but the key is I waited to buy the Lexus until I could actually afford it.

Which means if either my wife or I lost our job tomorrow, or some large unplanned expense came up, I'd still keep my car... and my house... And we could still afford to pay all our necessary bills too.

Sure this means when I was 23 I drove a car that wasn't a brand new lexus... but it also meant when it came time to buy one I didn't have to worry about how I'd do so.

 

Ok, I mentioned earlier that I saw a film saying that you don't have to pay Income Tax, and I found it, here it is:

http://video.google.com/videoplay?do...0303867390173#

Also, when it comes to Roads, Income taxes don't pay for that, the tax that we get for paying Gas, thats the tax that goes for Roads. State (or City) taxes pays for schools and stuff. But when it comes to Income Tax, I don't think we have to pay for it.

I donno, just watch the film, at least 20 minutes of it, before responding to it.

 

There's an article on some business journal website that gives you a general idea of what you can afford based on pre tax income. I'm on my phone at the moment so I can't give you the exact website but I remember it said that for a Lexus IS you should have a pre tax income of $100,000/year. "Lexus IS" was specifically the car they used for the $100,000 level. I'll give you all the site when I go home. It had more than just cars as well

 

True, I just hate how its so damn high. And now thinking about it, basically my hopes and dreams are crushed again, cause I was way up there in lala land, and you guys helped bring me back down to earth.

I really hope that the income I make will be enough, but I think I'd have to look at it differently.

 

Yeah, I don't think that my gf is gonna live with me, its just a bad look for our culture. I basically have to wait until we're married before I consider buying a house/condo, cause than, it wouldn't be as hard, because we will have a combined at $8,000 a month, if not more, and thats AFTER taxes.

But I agree, Go Club Lexus!

 

Yeah, I think that the amount I'm gonna end up making in the future is going to be pretty good too.

As for getting a new Scion or Toyota, neither of them have a RWD car. Unless Toyota's FT-86 concept is released in 2-3 years. But its a coupe, and I'm a sedan kinda guy.

 

Well, I live with my parents for now, and I'm basically in my room all day, which I estimate it to be...132-140 square feet, and to be honest, I'm pretty comfortable in here. I'm wanting to get rid of my bed to get a Sofa bed, so I can sit somewhere during the day to watch tv/ps3/homework/eat. I even workout in my room (P90X), and I feel pretty good here.

To have a place that is 7-10 times bigger than my house, and I will be completely fine with it. I used to be the one that wants a giant grand house, but I'm fine with just having my own place. I'm more of a tech guy (I got an iMac, PS3, I've had 2 iPhones in the past, plan to get a new phone next year (hopefully iPhone on Verizon), I want the new AppleTV, and a 2nd gen iPad).

When it comes to kids, me and my girl agreed to have just 2 kids, we're kind of hoping to have twins just to speed up the process, lol. Weird thing is, I want to name my son James (Biblical name), and my girlfriend wants a daughter named Emily (she likes that name), and then I came to realize that those names, are the same exact names of Harry Potters parents, lmao. (I like HP btw, so I don't mind, just think its pretty funny, lol.)

I'm sure I'll be out of debt way before I get my own place, I'm aiming to finish paying off 1 credit card by July '11, and the other credit car by December '11.

 

No, seriously, those folks are nuts.

You don't need to listen for 20 minutes, it's full of crap in the first couple when it claims the 16th amendment isn't legal.

The folks who follow the "you don't have to pay taxes" advice generally end up in prison.

See Wesley Snipes for a well known example.

Every argument they've ever brought to court has lost.

Because they're nuts.

Like "the moon landings were faked" nuts.

And apparently the guy who made the film is too stupid to simply look up the internal revenue code, which is the law requiring you to pay income tax.

http://docs.law.gwu.edu/facweb/jsieg.../JustNoLaw.htm


(your understanding of how roads, schools, and other things are paid for is a bit lacking too... the federal government spends considerable sums on education for example... and more is spent on roads than just gasoline taxes)


I did watch the film though, because it's hilarious

If you made a drinking game where you drank everytime the film stated something that was simply untrue you'd be hammered 20 minutes in.

Even better, it spends most of the first 20-30 minutes repeating WHY WON'T ANYONE SHOW US THE LAW THE REQUIRES SOMEONE TO PAY TAXES???

Then at 29:19 a woman is holding up a copy of the internal revenue code. Which is that law.

But apparently she only owns it to wave around and neither her nor the filmmakers bothered to open the book and find out it answers the question they've wasted most of their film asking... and then their arguments start making even less sense and get even less honest from there.

 

The MR2 Spyder looks nice, but I don't know how to drive stick. I mean, I can switch gears from 2nd-3rd, 3rd-4th, etc, pretty easily, its just the part where its going from Neutral to 1st gear when at a red light that messes me up. Plus, in southern california, there is just too much traffic for me to even enjoy having a manual car.

As for the other models, I'd love to own them new, but I might get a used one before going new, I'm not sure, but I'll see what happens.

I'm working on my calculations once again, and I'm gonna post up what I've been thinking about for the past few minutes/hours.

You bought your IS350 in cash? Damn, thats really impressive. Do you mind me asking you how much net income you n your wife make, and where you live? Cause other states relatively have a cheaper cost of living as compared to California, which is jacked up in price. I was talking to my gf, and she's fine with moving out of California to somewhere more affordable, which I completely agree with. Probably somewhere in the Northern California, Las Vegas, or maybe even Arizona.

 

Vegas they're about giving away housing at this point, so not a bad place to look... the job market kinda sucks there presently though.

I live in North Carolina presently (the RTP area which shows up pretty consistently on those best places to live lists)... Not gonna post my income here, but cost of living is certainly lower than CA, but then that's true of nearly the entire country

Right now as others have said, focus on getting rid of that 29% credit card debt. Short of a winning lottery ticket you're not going to do better than a 29% return on investment, which is what you get on every dollar you put toward paying that off.

Until that's done you shouldn't be putting $ toward a new car (or a downpayment on a condo either)... plus as I said if your credit is rough, and with a late-payment credit card record and a repo on a car it likely is, you're going to have issues getting a decent mortgage right now (and maybe not get one at all).

So you might need to rent for a little while till you get your debt and your credit squared away, and then can save for proper down payments.

 

Whats RTP?

Both of my credit cards are at 29.99%, but the one with the balance of $3,379, I'm planning on having that paid off completely in July 2011, and the other one with the balance of $1,375, I plan on having that paid off completely in Dec 2011. Basically, for 9 months, It's going to be $528.50 towards credit cards every month, and after those 9 months, the last 4 months will be payments of $111.47.

How long does it take to make payments on time to fix your credit score and have it above 720 (or a score high enough that enables low APR for cars and homes?

 

Of course I'm kidding you seriously think that I'd be driving an is250 if I were working at Mcdonalds? Obviously I'd be driving a Ferrari 599

 

Ok, so I've been thinking, and I think this is the best thing for me to do right now.

Between now until July 2011, I'm gonna pay $528.50 towards paying off my credit cards, in the mean time, I'm going to save $200 until then, so by July, I'll have $1,800 saved up. (My 24th Birthday is in July, so hopefully I actually do save it, instead of celebrating, you know?)

From July 2011-Dec 2011, I'm gonna pay $111.47 to pay off my last credit card, and save $300 a month until then, having a total of $3,300 saved up.

From Jan 2012-Dec 2012, I'm going to continue saving $300 a month, total saved: $6,900. (I'm 25 at this point)

Hopefully, I get hired as a Firefighter in the year 2013, lets say I get hired as a Firefighter in Jan 2013. I am going to continue living with my parents, but will make a lot of income and save money.

So, from Jan 2013 for about a 19 months, I'm going to save $2,000 a month. So by July 2014, I will have $44,900 saved.

I know that no one here can predict the future, but I'm sure that by than, house prices will still be low in a few areas. And I will be able to put a down payment for a condo, and be able to get a 2015 IS350 or GS350.

By than, I will be living a lone still, but I should have a huge amount of cash saved up that will help me make payments for living expenses, if anything should happen with my career.

And with after being a Firefighter for over a year, my income will increase by about $1,000-$1,500 gross per month.

But, I am not going to have the same car (my 1990 Lexus LS400) for 4 years. If anything, I might get a used IS350 before the year 2014, or maybe a used GS300/350.

But for now, I do know, that I will be out of debt, and will have thousands saved for my Condo and possibly a new car.

Can someone explain how a 401k plan works?