Author Topic: Need Advice  (Read 3773 times)


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Need Advice
« on: January 13, 2009, 01:40:30 AM »
I am 24 and single.  I have am starting a solid job where I will be netting about 36K per year before expenses.  I have no real assets aside from my truck which I own outright and some savings in the bank.  I am currently renting, but I am looking for some land to build a home on, and I have a few options.  Essentially I am an economic blank slate and I need some advice.  If you have any please pm me.   

Offline BigDanInTX

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Re: Need Advice
« Reply #1 on: January 13, 2009, 07:13:43 AM »
Marcus, I removed your double post in the other thread, but I will try to address your question there as well.

You are WAAAAAY ahead of the curve just because you're considering these things so young.

If you are not in debt, STAY THAT WAY!  By debt, I mean credit cards and such.  Home/Land mortgage debt and car loans are a necessary evil in many instances, but if you have credit card debt, priority number one is to pay it off.  Then, make sure to only use credit cards in emergencies and pay them off right away.  Otherwise, you're tieing down your money for a long time and getting nothing out of it.

Once you're out of debt, start squirreling away some money for use on that proverbial rainy day.  Pay yourself first!  Consider a purchase of a little silver each week to have some reserves in case banks go down/close/etc.

As you are in the Boston area (according to your IP address), I'm not sure what the laws are for gun ownership, but I would strongly suggest you exercise your right to bear arms.  If you are familiar with guns, make sure you own at least one.  Right now, we're not sure how aggressive Obama and the new Congress will be, so be sure to get one before the timer expires on the 20th.  If you are not familiar, take a firearms safety course to become familiar with not only the firearm, but general safety as well.

When it comes to finding a place to live, you need to do alot of research.  For me, it started with looking at a map of my state.  There's a definite line between the green areas and the brown areas.  Obviously, the green areas have more water available in the ground, making it good for growing and a plentiful water supply.  Then, I narrowed it down by where I'm living now.  I wanted it close enough to make a day trip, but far enough so it really is a getaway.  You have to prioritize your needs.  How big of a lot do you need?  Do you want some thick copses for wildlife to find refuge?  Do you need a natural water supply?  Do you need to put in a well?  Do you want access to electric?  There are just too many things to consider.

My best advice is to troll around these forums.  There's TONS of great advice and maybe you'll be inspired based on a post or two.

Welcome to the forums, good luck, and keep us in the loop as to your progress.  =-]

Offline Ultio1

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Re: Need Advice
« Reply #2 on: January 13, 2009, 08:34:30 AM »
I would look into some land. It can be had for cheap these days. I am talking about buying 1 to 5 acres and not going into debt to do it. It will probably be a stretch for a few months and then everything is back to normal, but you own land you could live and produce food on if you had to. Even if its in a tent. Nail that down before you get a car loan, mortgage, 2.3 kids etc etc. and you will have it made in the shade my man. Check out what Haldo, a member on this forum,  got for $2500!!! That included the trailer!

Offline Stein

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Re: Need Advice
« Reply #3 on: January 13, 2009, 04:14:22 PM »
First rule is learn from other's pain.

I follow the Dave Ramsey plan - it is basically common sense in a book form.  If you look at his website or borrow the book from the library, it would tell you to:

Save 3-6 months of expenses in a cash account like a savings account, then
Save a 10-20% (up to 100% if you can) down payment for a house if that is what you are shooting for (otherwise skip), then
Save 15% of your gross income (whatever floats your boat in terms of investments)
Save for college if you have kids
Pay off the house if you have one

There is also a bunch of material on how to develop simple budgets and the necessity of living on less than you make.  That's about it.  Obviously, the more you save the sooner and wider the options you have.  With a paid for house and tons of money in the bank you can do nothing or anything.

He also has a 3 hour radio show every day where tons of people call in.  It is entertaining and informative and free (on the internet and through local AM stations).


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Re: Need Advice
« Reply #4 on: January 13, 2009, 09:36:03 PM »
Thanks for the help guys.

BigDanInTX my wireless card must have fooled you.  I am actually in a small town called Petersburg up here in SE Alaska.  As for firearms training I am an avid shooter.  I received additional training in Glynco GA while attending a LE academy to become an Officer with the Forest Service.

With regards to the land my options were/are between two vacant lots.  Lot 1- 1 acre 8 mi out of town with a sistern and sceptic tank already installed.  This lot has a great view and water access, but costs 85K.   Lot 2-The other lot I am am looking at is in town on city water/sewage, 150ft x 100ft and is located on higher ground on my little island, and is selling for 15K.  I am leaning towards the lot in town due in large part to the fact that I could own the lot and the eventual building on it free and clear within five years.  I do value having a bug-out location, but I think that I could find something a little cheaper than 85k per acre, and I would have the finances to do that after the first lot was paid for an I have increased my savings.  So that is where I am at right now.  Any input is welcomed.   

P.S Does anyone know of some good prefab buildings they would recommend?


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Re: Need Advice
« Reply #5 on: January 14, 2009, 02:33:06 PM »
Read:  The Millionaire Next Door, The Richest Man In Babylon, and Rich Dad, Poor Dad.  Between the three of these books you cover 90% of everything you will ever need to know about building wealth.

Rule #1: Building wealth is about what you keep, not what you earn.
Rule #2:The difference between being financially solid and being rich is what you do with the money you keep.

Today we have Dave Ramsey, Oprah, Suze Orman, and dozens of others telling you how to build a great life.  A few decades ago we had Anthony Robbins, and a generation before him we had Dale Carnegie and Napoleon Hill.  I strongly recommend the Anthony Robbins audio programs because they are no longer hot and popular like the current gurus and you can get for $10 on amazon what used to cost $120-$200 on late night cable. :)  In a nutshell most of these self-help programs simply say to set goals, make a plan, and then act on that plan.  Nevertheless they are worth keeping around to remind you to focus on what you REALLY want out of life and to monitor your progress towards getting it.

In my opinion you MUST learn about money.  The world doesn't revolve around money, but it revolves much more smoothly when money is not a concern.  I love Kyosaki's view that money is like water or food.  It isn't important except for when you don't have any.  Paradoxically you must focus on money to create the freedom to not have to focus on money! :)

You'll probably do just fine if you stop reading this post now, but the rest of what lies below is all about things that can sabotage your plans.

I made just about every mistake in the book in my twenties so I'll share with you what NOT to do. :)

1.Don't associate with or tie yourself to "bad people."  This includes roommates or tenants that can't pay their share of the rent and people who always want to borrow your truck etc.  Basically people who are not at least MOSTLY self-sufficient will make all of their problems your problems.  Obviously drunks and druggies fall into this category too.  Being a responsible and caring person you'll likely want to help people out and give them a break but in the end it is you who will suffer for taking these types of people under your wing.  Pretty girls are also a dime a dozen.  Hold yourself to a standard that you'll only seriously date girls (we call them women now at my age) that have their act together.

2.Don't buy too much house...or car...or anything else.  Most "things" cost you money long after you buy them.  I always propose the example of what would you do if someone gave you a mansion and a ferrari outright.  Likely you'd be bankrupt ten years later because you don't have the income stream to support the taxes, insurance, utilities, and maintenance on just those two items.  Build an income stream FIRST and then buy toys out of that income stream.

3.Don't be an "early adopter" of technology.  You'll spend a lot of money and even more time trying to adapt technologies that are not supported by 90% of the rest of the world.  This means not buying cutting edge phones, televisions, or computers, even at bargain prices.  I've had a number of super-toys that were simply impossible to get repaired when they failed because nobody had parts or knowledge for such limited production items.  I finally learned my lesson when a specialty repair shop told me that the one place they could suggest to take my 13' projection televison was the dumpster behind the building.

4.Don't buy new furniture.  Most of it is junk and a lot of it ends up on the curb.  Antique and second-hand furniture that is in excellent condition has already been field-tested and passed.  Depending on how much of a hurry you are in, furniture can be acquired for free or at rock bottom prices from people that just want to get rid of it because it doesn't match their latest decor or remodel.  I got a gorgeous king-sized waterbed from one family just because it didn't fit in their new house and they even delivered it!  I'm not saying to furnish your home in mismatched throwaways or cinderblocks and planks, but just putting the word out that you are looking for X item will bring a surprising number of offers.  Also watch Craigslist. :)

5.Never procrastinate with financial matters.  Always jump on any mail that looks like it might be a problem, particularly anything from the city, state, or an institution that you already have a relationship with.  Mistakes happen and the longer you take to address them, the harder they are to get cleaned up.  If say Citigroup decides that someone else's credit card belongs to you and you just ignore the error expecting them to fix it, it will come back to haunt you.

6.Never ever loan any money to anyone that you are not willing to write off.  If you are going to be in serious trouble if that money never comes back, don't lend it.  I (now) always assume when I make a loan that I will never ever get the money back, and adjust my budget to account for that.

7.Learn to say "no" outright and explain why.  Don't make excuses or invent stories to explain your actions.  The truth is always the least painful way of dealing with every awkward situation that comes up.

8.When it comes to home repairs, car repairs, or other unexpected large expenses, there are three ways to deal with them.  Let's say for example you have a roof leak.  A poor person will spend $40 at Home Depot for some tar and fix it themselves.  A middle-class debt-laden american will pay $2000-$10000 for a contractor to replace the roof and finance it.  A rich person will pay a poor person $300 to go to Home Depot and get the materials to repair the roof.  Be the rich person.  Hire competent people to do work out of your circle of friends and contacts rather than the yellow pages.  Don't try to fix things yourself that you don't have the tools and expertise to fix.  You'll end up spending thousands on tools you use very very rarely, and your repairs will probably take multiple attempts to fix.

9.Always watch your budget.  At the end of every month you should have more money than you did at the beginning of the month.  If you don't you are sinking and something must change.

10.Always budget for the unexpected.  This is the point of an emergency fund.  Everyone has emergencies.  Do NOT keep an unused credit card just for these emergencies like many people will tell you.  If you can't afford the first emergency and put it on a card, the following emergencies will also end up on cards and eventually you'll be talking to a bancruptcy lawyer.  Poor people have emergencies too, but they have no credit and have to solve their problems on a budget.  Just because you are not poor does not mean you have to throw away more money to deal with an emergency than poor people do.

11.Roommates!  They can make or break you.  Screen them like you would screen employees.  When you are young having a few roommates is a lot of fun and drastically reduces expenses as long as they are paying their share and are not destroying your things.

12.Never co-sign a loan for anyone.  Let anyone who is foolish enough to co-sign for you do it, as it will lower your interest rates, especially being young.

13.Never sign up for any utility such as cell service or cable that does not have a fixed monthly rate.  Do block 900 numbers (sex lines, horoscopes etc) and any other services you do not use on your main line.  I had the lovely experience of receiving an $1100 phone bill because one of my roommate's girlfriends was calling that fricking Miss Cleo for hours and hours while we were asleep.  Similarly I had a roommate dial a long-distance (zone call) number to reconnect our internet (back in the old days) and received a $2400 phone bill.

14.Don't drive drunk. :)  I don't even get drunk in public any more.  I've had years and years of martial arts training and one night we got the living crap kicked out of us by eight guys that were looking for someone who had vandalized their boat.  I don't remember even the slightest bit of concern at the time we were being assaulted and I even remember telling the cops it was no big deal and I didn't want to press charges.  To this day I still have dental work from that incident that needs occasional repair.  Walking around out of your mind is high risk even if you're a charming friendly fellow like me. :)  One of the other guys with me that night is a navy seal and he left in an ambulance.  In the end we were lucky to get off as light as we did, but the whole mess could have been handled much less foolishly had we been even mildly sober.

15.Don't take in pets you don't have time to properly train and pay attention to.  I've had a number of roommates that brought home puppies that their girlfriend just had to have and these dogs never really got a fair chance at being properly trained.  Untrained dogs will destroy everything and anything they get near.  Also take a realistic look at the costs of caring for any pets you might be looking at.  Even tank-dwelling lizards or fish require time, effort, and money to support properly.  I love aquariums and I love dogs, but they are an expense.

16.I mentioned not loaning out your vehicle, but I'm going to mention it again and back it up with two stories.  I loaned my hot rod to a friend for just an hour to go run an errand.  That night when I came home I was confronted by my father who was FURIOUS about me burning rubber, blowing lights, and nearly hitting him with my car.  It took a call from my manager at work to convince him I was not lying about being at work and that it was my teenage "friend" driving my car like a jackass.  Another friend loaned her car to her boyfriend to go to the store.  Her boyfriend and his buddy decided to rob the store at gunpoint.  (Real winners, I know).  This was in a podunk rural town with basically one party store and I guess these Detroit guys thought they would have no problems getting away with it.  A few hours later the car was in a ditch and the local police dobermans were dragging these two out of a corn field.  The girl whose car they were driving had to come in for police interrogations every day for a week afterwards because they did not believe she was not involved.  When you loan out your vehicle you are exposing yourself to an extreme degree of risk.

17.Don't buy a lifetime anything, ever.  Companies come and go, and even a convincing financial case for the long-term benefits of buying into a lifetime plan means nothing when the company providing the service you are buying no longer exists or when you move to an area they do not serve.

18.Understand that vehicles are not assets and that they do get "used up."  Don't drive crazy distances just because you can.  Fuel costs aside it destroys the value and utility of a vehicle.  I put 140k on a $12,000 car (back when that was worth something, it was a convertible mustang) in three years and sold it for $400.  Look at that as more than a $4000 a year pay cut when you factor in fuel and maintenance.  My next car cost $5400 and lasted 11 years.  That equates to more than $3500 a year in reduced expenses. 

19.Don't invest in get-rich-quick schemes of any kind.  I actually am a fan of multi-level-marketing companies like Amway for learning things like salesmenship, leadership, and motivational speaking, but they are not a wise path to wealth.  They are an excellent value in education though, and if you go in with that expectation you can take away a lot of skills though most likely not much money for your time and effort.  Investment schemes with high returns are almost universally frauds.

20.Don't give away your human capital.  If you have professional skills, don't feel like you should provide your expertise to everyone all the time...for free.  All lawyers do is talk and file some forms, but they still charge $100+ an hour.  If you give away your skills you will have a neverending line of "friends" seeking you out.  Of course you'll do professional favors for some friends and family, but keep in mind that you have to draw the line somewhere or you will be working 100 hours a week and still starving.  Just because some things may be easy for you does not mean they are worthless.

I'd say that about covers the pitfalls and setbacks that took a heavy toll on my health, wealth, and happiness in my twenties.  Things have been happily drama-free since then for the most part. :)  Good luck and ditto what BigDanInTX said.  Having the wisdom to know that you need to know more than you do puts you way ahead of the curve. ;)

Experience keeps a dear school, but fools will learn in no other. ---Benjamin Franklin