Help: Drawing from Piggington Community Expertise

[JES]

I can agree with you there. When I am convinced that we are near the bottom, I will likely get back in the game myself! Survey – what is the best business to start right now? I know, you should look to your skills set, use that as a guide etc. Disregarding that, what would be the best one for an average Joe to start cold?

[Anonymous]

I’m probably in the same boat as you. I’m also hitting the big 30 this year and am not quite ready yet with my 20% down payment, but am getting closer. I do feel that this is definitely the goal to shoot for.

For the 401k, I am putting in the max that my company will match; I figure that that’s free money. I ramped this up as I got raises so that I wouldn’t feel it. I also am putting the max I can into a Roth as well.

I did get lucky and was able to buy an inexpensive (relatively to Cali) house in AZ. I rented it out for a couple years then sold it a bit off peak. Without that, I wouldn’t be close to having enough for a down payment.

Now, I use some of that money for risky investments and some for more “boring” investments. I also paid off all my credit cards after I sold the house as well. Being on the wrong side of compound interest makes it hard to save. Plus, I found when I had a credit card balance, it was very easy to tack more junk on to it.

Now I’m at that saving money stage. This is by far the hardest to me. It’s difficult to drive a corolla when your friends drive benzes, but I am going on the assumption that credit will be hard to come by for a while, and cash for a down payment will be king. One thing that is helping is putting money into CDs. I find that making some interest is nice, and having the money “locked up” stops me from being tempted to spend it.

[Anonymous]

I’m probably in the same boat as you. I’m also hitting the big 30 this year and am not quite ready yet with my 20% down payment, but am getting closer. I do feel that this is definitely the goal to shoot for.

For the 401k, I am putting in the max that my company will match; I figure that that’s free money. I ramped this up as I got raises so that I wouldn’t feel it. I also am putting the max I can into a Roth as well.

I did get lucky and was able to buy an inexpensive (relatively to Cali) house in AZ. I rented it out for a couple years then sold it a bit off peak. Without that, I wouldn’t be close to having enough for a down payment.

Now, I use some of that money for risky investments and some for more “boring” investments. I also paid off all my credit cards after I sold the house as well. Being on the wrong side of compound interest makes it hard to save. Plus, I found when I had a credit card balance, it was very easy to tack more junk on to it.

Now I’m at that saving money stage. This is by far the hardest to me. It’s difficult to drive a corolla when your friends drive benzes, but I am going on the assumption that credit will be hard to come by for a while, and cash for a down payment will be king. One thing that is helping is putting money into CDs. I find that making some interest is nice, and having the money “locked up” stops me from being tempted to spend it.

[Anonymous]

I’m probably in the same boat as you. I’m also hitting the big 30 this year and am not quite ready yet with my 20% down payment, but am getting closer. I do feel that this is definitely the goal to shoot for.

For the 401k, I am putting in the max that my company will match; I figure that that’s free money. I ramped this up as I got raises so that I wouldn’t feel it. I also am putting the max I can into a Roth as well.

I did get lucky and was able to buy an inexpensive (relatively to Cali) house in AZ. I rented it out for a couple years then sold it a bit off peak. Without that, I wouldn’t be close to having enough for a down payment.

Now, I use some of that money for risky investments and some for more “boring” investments. I also paid off all my credit cards after I sold the house as well. Being on the wrong side of compound interest makes it hard to save. Plus, I found when I had a credit card balance, it was very easy to tack more junk on to it.

Now I’m at that saving money stage. This is by far the hardest to me. It’s difficult to drive a corolla when your friends drive benzes, but I am going on the assumption that credit will be hard to come by for a while, and cash for a down payment will be king. One thing that is helping is putting money into CDs. I find that making some interest is nice, and having the money “locked up” stops me from being tempted to spend it.

[bruingrad]

Thanks everyone for your suggestions. I’ve tried to reign in debt, no new cars or fancy electronics. Biggest debts are school loans which are soberingly large (think law school large) yet manageable.

From what I’ve gathered, this is classic tortoise and hare. Essentially I need to continue plugging away and looking for good opportunity to buy property at a reasonable price (which I expect will happen w/in next 3-5 yrs) or otherwise invest what I’ve saved.

[bruingrad]

Thanks everyone for your suggestions. I’ve tried to reign in debt, no new cars or fancy electronics. Biggest debts are school loans which are soberingly large (think law school large) yet manageable.

From what I’ve gathered, this is classic tortoise and hare. Essentially I need to continue plugging away and looking for good opportunity to buy property at a reasonable price (which I expect will happen w/in next 3-5 yrs) or otherwise invest what I’ve saved.

[bruingrad]

Thanks everyone for your suggestions. I’ve tried to reign in debt, no new cars or fancy electronics. Biggest debts are school loans which are soberingly large (think law school large) yet manageable.

From what I’ve gathered, this is classic tortoise and hare. Essentially I need to continue plugging away and looking for good opportunity to buy property at a reasonable price (which I expect will happen w/in next 3-5 yrs) or otherwise invest what I’ve saved.

[gn]

It sounds like you managed to avoid the following (which are very bad for your finances):

1. Live beyond your means.
2. Pay too much interest to credit card companies.

The next step would be:

– Keep on saving toward a 20% down payment. It only “seem” to take forever. If you are determined & patient you’ll get there.

In some ways, you are in a very good position. That is, prices will take a few years to bottom out and it takes you a few more years to save for the down payment. Home price is going down & your savings is going up. What else can you ask for ?

>> I guess the long and short is I’ve always wanted a place of my own

It’s better to be late in reaching your goal than to be in a hurry and buying before you are ready. Many folks bought before they are ready & had to use adjustable mortgages to buy. They are now facing the consequences.

[gn]

It sounds like you managed to avoid the following (which are very bad for your finances):

1. Live beyond your means.
2. Pay too much interest to credit card companies.

The next step would be:

– Keep on saving toward a 20% down payment. It only “seem” to take forever. If you are determined & patient you’ll get there.

In some ways, you are in a very good position. That is, prices will take a few years to bottom out and it takes you a few more years to save for the down payment. Home price is going down & your savings is going up. What else can you ask for ?

>> I guess the long and short is I’ve always wanted a place of my own

It’s better to be late in reaching your goal than to be in a hurry and buying before you are ready. Many folks bought before they are ready & had to use adjustable mortgages to buy. They are now facing the consequences.

[gn]

It sounds like you managed to avoid the following (which are very bad for your finances):

1. Live beyond your means.
2. Pay too much interest to credit card companies.

The next step would be:

– Keep on saving toward a 20% down payment. It only “seem” to take forever. If you are determined & patient you’ll get there.

In some ways, you are in a very good position. That is, prices will take a few years to bottom out and it takes you a few more years to save for the down payment. Home price is going down & your savings is going up. What else can you ask for ?

>> I guess the long and short is I’ve always wanted a place of my own

It’s better to be late in reaching your goal than to be in a hurry and buying before you are ready. Many folks bought before they are ready & had to use adjustable mortgages to buy. They are now facing the consequences.

[Critter]

Here’s one way to look at the time frame necessary to save up a down payment. If you think to yourself, “It will take me five years and I’ll be 35 before I can buy anything!’ you can then ask yourself how old will you be in five years if you DON’T save for a down payment.

Time passes regardless – you are on the right track.

[Critter]

Here’s one way to look at the time frame necessary to save up a down payment. If you think to yourself, “It will take me five years and I’ll be 35 before I can buy anything!’ you can then ask yourself how old will you be in five years if you DON’T save for a down payment.

Time passes regardless – you are on the right track.

[stansd]

I’m 31 and in a very similar position. If you are truly maxing out your 401(k), that’s 15,000, and possibly 20,000 a year if your employer matches. Not sure how your plan works, but most folks can borrow 1/2 of their 401(k) to purchase a primary residence (up to 50K, which would mean you had 100K in your 401(k). Only downside is that if you lose your job or move to another company, you may have to repay immediately so be careful.

Regardless, if you are maxing that out, that by itself is almost 50K available in 5 years. If you can save on top (think annual bonus, other windfalls, tax refunds, etc.), you’ll get there very quickly.

Just keep at it…you’ll get there…I’m guessing we have similar salaries, and we’ve been able to get our 100K together in 5 years while giving 10% to our church.

Stan

[JES]

Leave California and your problems are solved. March 15th I lived in CA and was financially insecure. March 16th I moved to the Midwest and started living like a king.

[Anonymous]

I’ve long been an opportunist (patient one at that) and it has served me well. I just turned 43 and am in a nice position, having recently sold my small business that I started 15 years prior. Along the way I kept plugging away confidently knowing that while many of my friends were buying “stuff” and having a ball, someday that bill will come due.

To the contrary, I usually brought my lunch to work, made coffee at home (how novel), and drove a vehicle that I payed for in cash! I looked to buy necessities when they were on sale, always shopped vendors looking for a better bargain or at least a concession, and always saved some of my paycheck for a rainy day.

After 7 or 8 years of doing as much in both my business and personally, I started to gain financial traction. I could have easily bought the newest car or moved on to a bigger house but I resisted. Rather, I bought the building my business was housed in and focused on paying off my residence.

Fast forward to today… I’m sitting on a pile of cash , my 401K has had 15 years of maximum contribution,
my house is paid off, and the new owners of the business send me rent checks monthly!

There isn’t a mystery to get wealthy … educate yourself, save-save-save, and prepare yourself to capitalize on the many opportunities that are coming your way! That’s the formula that worked for me – and I’ll bet it’ll work just as well for you!!!

[Author]

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