Current Events > r/personalfinance is so damn irritating

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https://www.reddit.com/r/personalfinance/comments/gak87a/advice_needed_for_a_19_year_old/?utm_medium=android_app&utm_source=share

19 years old
$18,000 saved
"aM i DoInG gOoD fOr My AgE"


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Well, he got rightfully downvoted to oblivion, so thumbs up for r/personalfinance.

I've gotten a crapton of good advice from that sub.

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The other archetypal poster: "forget everything else, you are in a financial emergency, your focus in the next 6 month should be to accrue a $10k emergency fund, also did you know I earn $160k a year and live with my parents, my advice is very grounded"


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Only $18,000 by 18? Usually it's high 6 or even 7 figures on there by that age

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I hope the answers are a resounding NO.


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17m, 59 million saved up, parents think it's fine but I want to work for a year to save for college
Any advice??

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A lot of people there think there's such a thing as 'good' debt, its embarrassing.

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tbf saving for the long term is a terrifying thing and depending on the culture where that person grew up they might just not have a good concept of where they are in life financially.

didn't read the reddit post though.

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Gen5_AppleJack posted...

A lot of people there think there's such a thing as 'good' debt, its embarrassing.

Wouldn't a mortgage be considered "good" debt?

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Gen5_AppleJack posted...

A lot of people there think there's such a thing as 'good' debt, its embarrassing.

Eh... not all debt is bad tho. A car loan and a car is better than no car.

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i differentiate between productive debt vs unproductive debt. Productive being it saves you money elsewhere or will get you a good asset or return in the future. Unproductive being you consume something with short term and typically negligible benefits which is mismatched with your repayment profile ie you end up paying over the long term.

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Gen5_AppleJack posted...

A lot of people there think there's such a thing as 'good' debt, its embarrassing.

I think they just mean that not all debt is created equal.

Scenario A: It's not good debt to have your credit card maxed out because you bought a new TV you didn't need, and now you're paying interest on the card every month.

Scenario B: That's not the same as say, buying a lawnmower now on your credit card because it would be more expensive to hire a gardener to come by and do your lawn for you every week until you have enough cash to buy one yourself.

In scenario A, you're going to pay more money than you would have if you had not gone into debt. In scenario B you would likely be saving money in the long term.

And if you're about to come up with another way to solve that lawnmower scenario, don't. It's just an overly simplistic illustration. Some debt involves some kind of investment or long term value.

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Tired-Insomniac posted...

Wouldn't a mortgage be considered "good" debt?

No, why would it?

cuttin_in_farm posted...

Eh... not all debt is bad tho. A car loan and a car is better than no car.

A car paid with cash is better than no car, which is better than a car payment.

Something to realize is that a credit score is only for gauging how much money you can borrow.

You don't want to borrow money, being in debt is being slave to the lender.

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Gen5_AppleJack posted...

No, why would it?

Because the alternative is renting?

"Don't ever be in debt for anything" is an odd philosophical choice. Imagine if our economy worked that way. I mean, it just wouldn't work at all.

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Gen5_AppleJack posted...

No, why would it?

Most of the time a home is an appreciating asset so that debt could be cleared instantly with a sale without coming up with extra money, unless you do it very early on and have to pay closing costs.

Can't think of any other debts that would be the same, except maybe an auto loan you take out to buy some exotic rare car you keep in a garage forever


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Gen5_AppleJack posted...

A car paid with cash is better than no car, which is better than a car payment.

Having no car is not better than a car payment in most areas of the country. Public transportation in general is pretty shit and you need a way to move around.

Of course paying full cash for a car is ideal, but most people don't have that option when they need a car immediately.

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Mortgage with the bank trumps paying rent to the landlord.

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That subreddit is my go-to place for any financial advice, that being said there are a lot of dogmatic posters there who are going to end up being the richest corpse in the cemetery

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BignutzisBack posted...

That subreddit is my go-to place for any financial advice, that being said there are a lot of dogmatic posters there who are going to end up being the richest corpse in the cemetery

That's reddit in a nutshell. it's interesting to see that same attitude across any particular subreddit.

The people over at /r/goodyearwelt will try to convince you that owning 4-figure sum pair of work boots is the most important purchase you'll ever make in your life

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Gen5_AppleJack posted...

A car paid with cash is better than no car, which is better than a car payment.

Obviously.

But most people cant pay with cash. To get to where you can, you need a car to get to work in most places.

Contrary to old out of touch people like Dave Ramsay, most people dont get paid enough to just buy things outright. A car loan makes sense for most Americans. Just dont get it new and it will pay off much more than trying to save for eternity to pay in cash.

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pinky0926 posted...

Because the alternative is renting?

This must be a cultural thing, cause renting is all the rage here
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teepan95 posted...

This must be a cultural thing, cause renting is all the rage here

It's all the rage here too, but only because most people don't have the security otherwise

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Just depends on where you live. Owning a home is not feasible in some places because of the property values.

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I wouldve thought its just as important to buy an appropriate car for your budget and needs, taking into account the total cost of ownership and not just the purchase price of initial outlay.

... but who am I to talk. I have blown and lost a lot of cash on new cars over the years.

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gloBal enemy posted...

I wouldve thought its just as important to buy an appropriate car for your budget and needs, taking into account the total cost of ownership and not just the purchase price of initial outlay.

... but who am I to talk. I have blown and lost a lot of cash on new cars over the years.

That, too. Buying a $40k truck that gets 18 miles per gallon is not really a good financial decision :\

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so click unsubscribe and it disappears from your front page.

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The idea of not borrowing money for as many things as you can, the Dave Ramsey idea, is fine for those who are just plain bad with money or need to just keep it simple.
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Also, re cars, what's wrong with buying an old banger for a few hundred euros (dollars)? As long as it runs...
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teepan95 posted...

Also, re cars, what's wrong with buying an old banger for a few hundred euros (dollars)? As long as it runs...

Nothing wrong with it. For me I love cars and driving (or I did before I got married and had kids) so I just saw it as an expensive hobby. I was under no false pretences it was an investment.

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emblem boy posted...

The idea of not borrowing money for as many things as you can, the Dave Ramsey idea, is fine for those who are just plain bad with money or need to just keep it simple.

Yeah I never got that. We had a financial specialist at our command who told us mortgages are evil and you only should ever buy houses outright with cash. But I thought that idea is absurd, since most people ... you know, can't do that.

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99% of that sub is bullshit, poverty finance is more useful even if you arent poor

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then stop going there

its full of losers, posers, and trolls.
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Ya, the issue with car financing is that people end up financing cars that are expensive. If you have the mindset to buy it in cash, it leads to you purchase a cheaper vehicle
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E32005 posted...

then stop going there

its full of losers, posers, and trolls.

so is most of the internet lol.

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gloBal enemy posted...

teepan95 posted...

Also, re cars, what's wrong with buying an old banger for a few hundred euros (dollars)? As long as it runs...

Nothing wrong with it. For me I love cars and driving (or I did before I got married and had kids) so I just saw it as an expensive hobby. I was under no false pretences it was an investment.

So why is everyone itt pretending that you can't buy a car unless you go into thousands of euros debt?

Hexenherz posted...

emblem boy posted...

The idea of not borrowing money for as many things as you can, the Dave Ramsey idea, is fine for those who are just plain bad with money or need to just keep it simple.

Yeah I never got that. We had a financial specialist at our command who told us mortgages are evil and you only should ever buy houses outright with cash. But I thought that idea is absurd, since most people ... you know, can't do that.

I just don't like the idea of spending money now in order to spend less money later. The only debt I have is student debt (under 10k) and I'm not planning on accruing any more for a while tbh.
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Hexenherz posted...

emblem boy posted...

The idea of not borrowing money for as many things as you can, the Dave Ramsey idea, is fine for those who are just plain bad with money or need to just keep it simple.

Yeah I never got that. We had a financial specialist at our command who told us mortgages are evil and you only should ever buy houses outright with cash. But I thought that idea is absurd, since most people ... you know, can't do that.

Even Dave will say a mortgage is fine. But he tells people to do 20% down abd 15 year mortgages. Which seems bad to me. Better to do a 30 year but pay it off like a 15 year, so you can scale back if needed due to financial issues.
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do you plan to buy a house outright then if you are trying to avoid debt? How about paying for things using credit cards even if you repay in full?

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gloBal enemy posted...

I wouldve thought its just as important to buy an appropriate car for your budget and needs, taking into account the total cost of ownership and not just the purchase price of initial outlay.

I wish I could drill that into the heads of the average customer I saw walking into the mercedes dealership when i worked there.

I wondered what went through their heads, and sumised it was something like this:

"Hmm, ok this car costs $70k. That means the loan repayments are $1000 a month. I can just about afford that!" *end thought*

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gloBal enemy posted...

do you plan to buy a house outright then if you are trying to avoid debt?

Probably not. Renters have a ton of rights here, which suits me just fine

gloBal enemy posted...

How about paying for things using credit cards even if you repay in full?

I don't own a credit card. I'm not informed enough on them, since the information I receive tends to apply to American cards. That said, paying it off straight away wouldn't be too bad, I guess.
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pinky0926 posted...

I wish I could drill that into the heads of the average customer I saw walking into the mercedes dealership when i worked there.

I wondered what went through their heads, and sumised it was something like this:

"Hmm, ok this car costs $70k. That means the loan repayments are $1000 a month. I can just about afford that!" *end thought*

as someone who has bought a few new Mercedes over the years (nothing too fancy) I just enjoyed the comfort and quality, and was willing to pay for it. And I paid for each in cash which was probably not the most tax effective or cheapest but despite my friends trying to convince me otherwise, I wasnt a fan of going into debt on a luxury of non essential purchase.

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teepan95 posted...

Probably not. Renters have a ton of rights here, which suits me just fine

I don't own a credit card. I'm not informed enough on them, since the information I receive tends to apply to American cards. That said, paying it off straight away wouldn't be too bad, I guess.

for me its a convenience measure and you get some perks and benefits like insurance or points etc... and protections. I have never paid interest on any as I use it purely for convenience but I guess avoiding them is another way to avoid going into too much debt.

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Hairistotle posted...

Yeah it's a surefire way to make me feel like shit. Like fuck, where did I go wrong? I've never had that amount saved in my life. I'm 27 now and I'm only finally starting to build a savings of a couple thousand. And you got the people here with 40, 80, 120k savings spanning all throughout their 20s. It's fucking disgustingly absurd - can't even imagine what kind of life led to it. Wish I wasn't such a jealous person

I worked hard with 100 hour weeks for a third of the year for many years, plus studying at night to get through my degree. I look back on my time since I turned 18 and am glad I maxed the choices and sacrifices I did. Missed out on hanging out with friends or getting smashed was often as others, but Im now 32 and grateful for where I am in life now.

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Gen5_AppleJack posted...

A lot of people there think there's such a thing as 'good' debt, its embarrassing.

??? Becuase there is. Are you serious?

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teepan95 posted...

Also, re cars, what's wrong with buying an old banger for a few hundred euros (dollars)? As long as it runs...

The likelihood hood of paying more overtime via maintenance goes up the further back you go.

Paying more for purchase price would hopefully imply less maintenance needed.

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CreepySmile posted...

17m, 59 million saved up, parents think it's fine but I want to work for a year to save for college
Any advice??

"Well, gee. How did someone so young end up with so much money?"

"I worked for it."

Every time. Also, "I have $100. What do I invest in?" and "Do I pay taxes on the income I made?"

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gloBal enemy posted...

as someone who has bought a few new Mercedes over the years (nothing too fancy) I just enjoyed the comfort and quality, and was willing to pay for it. And I paid for each in cash which was probably not the most tax effective or cheapest but despite my friends trying to convince me otherwise, I wasnt a fan of going into debt on a luxury of non essential purchase.

If you factored in all the costs and it was within your budget, then you do you.

I'm just talking about the people who didn't realise that owning a mercedes instead of a toyota also meant

• much, much more expensive servicing costs
• much more expensive parts replacements
• more expensive fuel costs
• insane depreciation

So you're used to replacing a windshield for $200? Well now it's $2000. Also I know you bought it 2 years ago for $70k so I'll cut you a deal, trade it in and I'll give you 10k off your new mercedes

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gloBal enemy posted...

so is most of the internet lol.

you ask the internet for advice?
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