Madison MoneySports - Personal Finance Thread

[Senor_Taylor]

For more reference. I graduated in 2017 and started at $66,000 a year. I've been hustling my ass off and will make around $100,000 this year. I flip cars when I can, haul cars around for people, and really do anything I can reasonably do to make some money on the side. I contribute to my 401k a decent amount but do not max it out. I graduated with 25k or so in student loans since my family was poor enough that I got grants to pay for most of the rest of my schooling. I worked in college to pay what little the grants and loans didn't cover, rent, food, etc.

I moved up to NOVA with two paid off, relatively cheap vehicles. With $0 to my name after almost having to sell my Miata or borrow money from Joey to put a security deposit on an apartment here. (Was still paying rent in Harrisonburg until August). Sold both cars and paid off one student loan. Immediately picked up a STUPID car payment on that 4runner. Promptly lost $10,000 between the 4runner and first shitty E30 and lived a vagabond life for all of 2018. I bought the GTI, flipped a few cars, and got a new job making the big boy dollars and that opened the door for me to build the track car. I've spent nearly $20,000 on it since January of 2019 and I have legitimately $1500 in the bank, $15,000 in student loans, and $35,000 in auto loans between the truck and Fiesta.

I am absolutely NOT what anyone should try to be. I work my ass off, have cool shit, and stress about money because I'm usually unhappy if I sit around doing nothing and not spending money. I did it in college too. I worked full time while in school to save and save and save to buy that Miata when I could have not spent the money, worked less, and relaxing more. I spend way too much money to be someone that grew up as poor as I did. I'm 100% the stereotype of the guy in the trailer park that wins the lottery, doesn't know what to do with it, and blows it all on stupid shit.

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[Jake]

Shew, that's a lot Jake. It puts things into perspective though, I always wondered how you guys in NOVA had so much cool stuff coming out of undergrad. I was sitting here with a house and a beat up XJ going, I WANT THAT TOO. So, I bought an FRS I couldn't afford and tried to keep up with Jones (even though those Jones were 2 hours away). 

 See, I bought a house when I was 22 and still in college and while I always had housemates helping with the mortgage, maintenance had been a large suck on my finances. I think I discount how much of a drain it is because everything I've repaired has been a necessity.  I probably could have had some cooler cars through my 20's if I didn't buy my house, but overall my positive equity in my home has been better overall for my financial health then probably having a revolving door of vehicles. It's just more boring. I'm not a do it yourselfer, I don't really care about lawn maintenance. It was just a good investment at the time with 0 real excitement behind it.   

I can kind of trace some of my hesitation on getting a fast, fun car again back to my GTO experience and just how much of an absolute shit show that was for me (mostly caused by my ignorance). My motor blew up from a known issue on the LS2, the third party warranty company claimed it was my fault and denied my claim AFTER THE MOTOR WAS APART AT THE DEALERSHIP. Picking up a car in pieces, after getting shafted by a shady company and being able to do nothing about it is a sobering experience.  For basically 2 years, I paid monthly payments on a car with no motor in it, in my driveway AND THEN had to pay someone to rebuild the motor, drop it in with the help of a local mechanic and try to sell it just to get myself out the money pit. I basically had the entire value of the car in maintenance and repairs billed to a credit card at like 12% interest, plus the car payment itself. Absolutely brutal and the biggest drain on my finances in the last 8 years. I wish I could justify getting a cool s2000, e46 M3, or an M5 or an older Porsche or something, but after that experience, I kinda figured I'd need a lot more cash or get something pretty damn nice and CPO'd to be willing to get back into car stuff again. But, the first rule of racing is don't track what you can't afford to crash so even if I did get something nice, I'd be hard-parking for days and it wouldn't serve the purpose for why it was built. 

Now though, I think I'll get something more track/autox oriented (car or bike, I'm not sure) next year and try to pay cash for it, and it'll be cheap. Like under 5k cheap. You can get a well prepped track bike for like 3k and I already have a trailer which makes it easy. I'll maybe siphon off a small percentage of income to do fund my motorsports stuff after I hit my other goals closer to the end of this year and create a "fun account" so I can keep my budget a little bit exciting. Strict personal finance always feels like this funeral dirge to retirement and I need a little bit of space in the budget to do some fun stuff.  I'm struggling with how much to allocate to that but it sound like to participate in motorsports in any real racing sort of way, it would be a huge drain. I'm not going to do that. I just want to learn to drive better and have a space to make mistakes. I'll take another look once I get out of my student loans. 

This conversation has been good in kind of figuring out how you guys have managed to do this stuff, but bottom line is that I'm generally more risk-averse financially and that's sort of what has been my biggest mental road-block. And, I have a home and have had one for the majority of my "wealth building" early years.  I should also probably get treatment for adhd   . Thanks for the feedback, everyone.

You’ve got very real equity, I have a purple BMW that is of limited interest to 85% of the buying public. I have spent solid down payment money on the M3 which is why I’m still renting and only now considering buying a place. The freedom to move that comes with renting is its own perk, but I’d like to have equity in a home as well. That said, I do see most of my friends who were able to buy at a younger age had parental help. That train was never coming to the station for me so while they got me through college (which was an incredible thing to do) that’s it. Not a bad thing but I have to keep that in mind when I see others who bought places and made it look so easy. 

You could spend a total of $5k on an old BMW or Honda or Miata to track, have it street legal, and get as competitive as Time Trial without sinking tons of money into it.  Going wheel to wheel is where the bigger money comes in.

[Senor_Taylor]

Yeah, buying an NA for $4000 will put more smiles on your face every day than anything you can buy for less than $10,000. Grab a Miata, throw the top back, live the good life. You don't need the coolest thing immediately. Miatas aren't getting any cheaper so you'll that money back out when you want to get something "cooler".

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[Apoc]

We bought a house at 25. Sold it for a shit ton of profit and bought a bigger house. Took an absolute blood bath when selling that house. Oh, don't forget the time I borrowed money from my dad to refinance our second house away from an interest only ARM because we were under water. Took years to pay that money back... with interest (no free rides from *my* dad). After eight+ years of home ownership, we had ZERO home equity at the age of 34. Seems like you're doing better.

[rherold9]

I think another point of this is people haven't really shouted out is:

I firmly believe we are getting closer to an economic downturn frome the impact of COVID. I'm more than certain we'll see a full downturn come here sometime. Be prepared for the worst case, imo

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[D_Eclipse9916]

We bought a house at 25. Sold it for a shit ton of profit and bought a bigger house. Took an absolute blood bath when selling that house. Oh, don't forget the time I borrowed money from my dad to refinance our second house away from an interest only ARM because we were under water. Took years to pay that money back... with interest (no free rides from *my* dad). After eight+ years of home ownership, we had ZERO home equity at the age of 34. Seems like you're doing better.

My wife got burned from this as well. She owned a townhouse for 7 years and when we went to sell it gave us maybe $5k. She balked but I had to explain why:

Refinanced for a lower rate twice; but restarted 30 years. Ridiculous. Also bought at peak of 2007/2008. AND bought a floor plan which is great for a single person or a young couple; but horrible for families or multiple singles. Didn’t even make sense to rent out.

You can’t plan for everything. And even smart people get caught out. Having a house is better than renting; but only if you buy right AND plan on being there for 7+ years and are smart with financing. And maybe a little luck that you aren’t buying at the top and have to sell at the bottom.

[Kaan]

I think another point of this is people haven't really shouted out is:

I firmly believe we are getting closer to an economic downturn frome the impact of COVID. I'm more than certain we'll see a full downturn come here sometime. Be prepared for the worst case, imo

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I have the same thought... but what are you doing about it? I'm looking to ride it out... there have been so many shifts in the market that i think you need sit on it if you want to recover (over the next 10 years).

[rherold9]

I think another point of this is people haven't really shouted out is:

I firmly believe we are getting closer to an economic downturn frome the impact of COVID. I'm more than certain we'll see a full downturn come here sometime. Be prepared for the worst case, imo

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I have the same thought... but what are you doing about it? I'm looking to ride it out... there have been so many shifts in the market that i think you need sit on it if you want to recover (over the next 10 years).

As stated earlier in the thread I shifted focus/goals to getting a solid safety net/cash emergency fund built up for 8 months of full expenses. I only had a 2 months in the past.... I should be there this month. That's the only reasonable thing I'm doing. Investments for retirement will continue at the same rate

[Tyler.M]

Honestly, I think that's a good focus right now. There's not really much else to do but build up some emergency funds and knock out some cheaper home projects like painting and organization. And also break myself from the Sisyphean debt cycle. I'm kind of expecting an economic downturn, too and money in the bank will help soften that blow.

One of the biggest behavioral improvements I've made is actually SAVING for big purchases and planning them as part of my budgetary process, not just financing everything on a whim.

[Jake]

One strange perk of this pandemic and not traveling anywhere or doing much of anything (even eating out, for the most part) means I've saved more cash than I ever have before. I've been fortunate that work has not let up and we've been paid at 100% this whole time. It's been a new/odd kind of fun to sock so much money away at my savings account. Also started investing a little bit, though mostly getting my feet wet instead of doing anything super substantial.

[Deceus]

One strange perk of this pandemic and not traveling anywhere or doing much of anything (even eating out, for the most part) means I've saved more cash than I ever have before. I've been fortunate that work has not let up and we've been paid at 100% this whole time. It's been a new/odd kind of fun to sock so much money away at my savings account. Also started investing a little bit, though mostly getting my feet wet instead of doing anything super substantial.

I was in the same boat, I saved the most I've ever have in a single month in April by a large margin. Then I had to buy a bunch of crap to stain the house and deck. That put a halt on that real quick but I for sure saved a boat load of money doing it myself. Dying to get back to saving, which is a new feeling for me. Didn't make any real money selling the Ralliart and Fit but been holding onto that cash and it definitely feels great to have a bit of a reserve even if it's costing me a bit in interest to keep the loans for the cars going a bit.

My current job situation and search has really opened my eyes to a lot as well. If I pay down my bills then I can take a slight pay cut to end up somewhere I'm a lot happier. Right now that's just not an option. Ultimately that's a mindset that seems to be a winning a ticket for me. Sure I have to start telling myself "no" a lot more for the next year or 2 but that will put me in place where I will have a lot more options in the long term across the board. O'reily's was ready to bring me on fully remote a few months ago. Seemed like an awesome gig, pretty chill but also a great chance to gain experience with scale. The CEO there believes strongly in building things in-house and investing in employees. They just wanted to bring me in a lower level and openly admitted they couldn't compete with a DC salary. Crunched the numbers I would have been making about $900 less a month and I just couldn't do it. Looking back it would have saved me so much stress and heartache if I could've taken it. Now I'm stuck selling a house I love and leaving an area I love even more and it fucking sucks. Lesson learned though: There's more than just a dollar amount to pay when you're stupid with your money. Freedom isn't free.

[Tyler.M]

Paid off my credit card debt finally. That makes 36k of debt paid off in 18 months (not all credit card, all debts combined). I'm gonna write that on a little whiteboard and you'll see me on some PF blog adverts in the next six months.

[Sijray21]

Wow, nice work! Doesn't it feel good?

[Tyler.M]

Wow, nice work! Doesn't it feel good?

It does! Now the hard part of building up 6 months of emergency savings and maxing out retirement. I'm with a company that provides OT for their salaried management, so I'll be working most weekends for the rest of the year until I get the number I need. 

Then, maybe just then, I can have a "fun money" account again.

[JPolen01]

Seriously impressive man. At least take yourself out for a nice dinner or something before you jump into all that OT.


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[Tyler.M]

Seriously impressive man. At least take yourself out for a nice dinner or something before you jump into all that OT.


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Going on a section hike of the AT next Saturday for a week! I'll probably celebrate when I return....if I can walk.

[little baby jesus]

I have all of your bad decisions beat. I'm $400,000 in debt and make $58,000 per year working 80 hour weeks. Hope it makes everyone feel a little better about their life choices.

Tyler - hot damn. I'll be your special date for a celebratory dinner. Hit me up.

[Evan]

I'm $400,000 in debt

How?

[Sijray21]

I'm $400,000 in debt

How?

I have to guess a Dr's program or education loans?

[Senor_Taylor]

That's Dr. Little Baby Jesus to y'all