How much Debt to income do you feel is a safe amount

[ericfox11]

Originally Posted by fireline43

Yea making that kind of money, you should be going to a financial advisor. An advisor can't do much with my 70k a year.

Hey man, 70K is pretty good! That's about what I'm making...maybe one day we will get to $200K post tax? Who knows.

But an advisor can do plenty for 70K or 200K, but they will skim off the top by either literally skimming off the top or charging excessive fees for trading and can also charge other monthly/annual service charges.

That being said, a financial advisor is perfect for a majority of people. Most people don't want to read 2-3 books to learn about keeping a balanaced asset allocation and don't want to keep up with it. For most people a financial advisor is perfect. Just check the fees and make sure they aren't too excessive.

[Dark_Knight_335]

Use something like mint.com or Quicken. There are like a bazillion financial resources that, when used with a healthy dose of horse sense and old fashioned discipline, will cost a fraction of what your average FA will run you.
Don't dump your cash into a financial advisor, unless you're getting a blowjob along with it.
P.S. If you're looking for sound financial advice, you are ill advised to seek it here

[Turb0Surge]

Did you end up buying that white m5?

[fireline43]

Originally Posted by ericfox11

Hey man, 70K is pretty good! That's about what I'm making...maybe one day we will get to $200K post tax? Who knows.

But an advisor can do plenty for 70K or 200K, but they will skim off the top by either literally skimming off the top or charging excessive fees for trading and can also charge other monthly/annual service charges.

That being said, a financial advisor is perfect for a majority of people. Most people don't want to read 2-3 books to learn about keeping a balanaced asset allocation and don't want to keep up with it. For most people a financial advisor is perfect. Just check the fees and make sure they aren't too excessive.

oh i wish! thank god, i don't feel so bad now. I always feel like I'm poor on this forum. I'm pretty solid with my finances, If I made upwards of 200k though I would probably want someone handling my investments though.
I kind of feel like buying a bmw was a bad financial desicion though. My problem i don't want a honda civic, but on the other hand I don't need a bmw. So like what's the in between cars?

[reelop19]

Dave Ramsey would shit a brick on the chest of most you people. Oh the insane debt!!!!

[jokergerm]

Originally Posted by Turb0Surge

Did you end up buying that white m5?

Still working on the details. My bank isnt willing to add back in deprication into my income and i had well over 100k depriciated this year.

They are only counting my w2 income. They need a lesson in accouting and taxes

Should know by tommorow

[tmo24]

Originally Posted by reelop19

Dave Ramsey would shit a brick on the chest of most you people. Oh the insane debt!!!!

I don't know how you feel about him, but I wouldn't take any financial advice from a radio entertainer that has filed bankruptcy multiple times himself.

[John 070]

Car should be less than 10, but eventually be zero for the rest of your life. Home is another story, even 50% when it's your first home. Because your income is rapidly rising, you don't want to sell yourself short.

[mike-y]

Originally Posted by fireline43

My problem i don't want a honda civic, but on the other hand I don't need a bmw. So like what's the in between cars?

a CPO bmw, lol. and keep your car for as long as you can after it's paid off. Just because you don't make over 6 figures, doesn't mean that you don't have enough funds to start investing/saving. You just have to be smart with what you have, and stay out of debt as best you can. $70k can go a long way if you don't have a bunch of monthly bills eating it up.

get out of debt, start investing/saving every month. Use an automatic withdraw, so you don't have to think about it. I started doing this 10 years ago, making less than 70k at the time, and was able to save over 10k each year without impacting my lifestyle. A little goes a long way, especially if you are young. Talk to an invester, there is always something you can do.

[John 070]

Originally Posted by jokergerm

They are only counting my w2 income. They need a lesson in accouting and taxes
ow

Lol banks want to lend every penny they have to those who are qualified, that's how they make bank.

[bplewis24]

Originally Posted by Diablo335

I'm a financial advisor...

After taxes...

First set aside $ for all medical expenses for the year (co-pays, deductibles, premiums, etc.)

Second set aside at least 15% into long-term savings (IRA, etc.). More if you are saving for a house or to pay for kids' college.

Live off the rest (disposable income). If you want to spend more on a car than on something else, have at it.

I personally feel that my monthly capital cost for a car (depreciation or lease payment, as the case may be) should not exceed 1% of annual disposable income. ie, if I make $50k after taxes, savings and medical costs, then I would not buy a car(s) that depreciates more than $500 per month. If I need two cars, that's $500 total.

How do you determine or estimate depreciation yourself? Do you use a schedule?

I'm a controller by trade so I do accounting and financial reporting for my company. I just recently made my personal 2013 budget and a 5 year savings plan. At least in theory, I plan on saving 6% of monthly income for maintenance, 6% for vacation/discretionary impulse spending, and 30% towards long-term savings (saving up for a house and/or other investments). This doesnt' count the very small amount ($50) I'm contributing pre-tax to a 401K each month. Now, I don't make a ton of money (above average), but I'm single, never married, no kids and have no debt (got through college on a football scholarship), which is why I'm able to save.

The one thing I can't get a good hold on is how to determine car depreciation. It's nothing like fixed assets, building improvements and other things. Any ideas?

[bimmerjmac]

Originally Posted by jokergerm

Still working on the details. My bank isnt willing to add back in deprication into my income and i had well over 100k depriciated this year.

They are only counting my w2 income. They need a lesson in accouting and taxes

Should know by tommorow

Try to pay cash for at least 70% of the transaction and see if you can get a line
of credit for the remainder. And then pay that line off as fast as you can.

[fireline43]

Originally Posted by mike-y

a CPO bmw, lol. and keep your car for as long as you can after it's paid off. Just because you don't make over 6 figures, doesn't mean that you don't have enough funds to start investing/saving. You just have to be smart with what you have, and stay out of debt as best you can. $70k can go a long way if you don't have a bunch of monthly bills eating it up.

get out of debt, start investing/saving every month. Use an automatic withdraw, so you don't have to think about it. I started doing this 10 years ago, making less than 70k at the time, and was able to save over 10k each year without impacting my lifestyle. A little goes a long way, especially if you are young. Talk to an invester, there is always something you can do.

oh sorry, I didn't mean to come off like I dont invest. I got it set up. I just want more money!

[DML]

If you have to ask you can't afford it my thinking anyway but on the other hand you only live once...Your call on this one champ.

[Neothin87]

My car payment + monthly insurance is roughly 13% of my monthly post-tax income.

Roughly 45% of my post-tax income is called for every month with mandatory bills + living expenses (car related costs, rent, food, utilities, etc)

[gds52]

Originally Posted by jokergerm

My wifes not thrilled on the new m5 purchase beacuse its alot of money and we dont need a new car. I just really really want a new car

So how much of your total monthly income do you think is ok to have going outward. Including everything, house pmt, cars, food, insurance, misc fun items.

I made a budget and we have to spend about 35% of our gross income to pay for all bills and general living costs, if i get the m5 it would be about 38% And some how i manange to spend another 50% on stupid crap and misc stuff

Just looking for advice.

In my opinion, one should be able to save some good percentage after all expenses. Your savings account should have enough money to pay for your car/house/rent/groceries/food for at least 6 months to 1 year if you loose your job.

[kfriceman]

I love the comments about the financial advisers "skimming 1-2% off the top"..........that's how they get paid....sheesh....financial planning is not amateur hour.....I'm not interested in doing it myself, so I have "my guy" do it for me and pay him accordingly....this has served me quite well.....and yes I know just how much his services cost me and I'm OK with it.

-Kevin

[jokergerm]

Originally Posted by gds52

In my opinion, one should be able to save some good percentage after all expenses. Your savings account should have enough money to pay for your car/house/rent/groceries/food for at least 6 months to 1 year if you loose your job.

I work for my self, i cant fire my self. And my sales have been up 30% every year for the last 3 years. We have never had a month that didnt beat the proir years same month. If that makes sense

So im good there.

[BMWcoupe335ii]

First, I don't like being in debt, and if I am it's not going to be for a car, it's going to be for a house, land, or a business. Second, I don't finance WANTS, I classify wants as anything that I don't NEED to live. Third, why are you going to finance an m5, that's just financially stupid . Just buy it cash! Anyways if you do get it post pics

[jokergerm]

Originally Posted by BMWcoupe335ii

First, I don't like being in debt, and if I am it's not going to be for a car, it's going to be for a house, land, or a business. Second, I don't finance WANTS, I classify wants as anything that I don't NEED to live. Third, why are you going to finance an m5, that's just financially stupid . Just buy it cash! Anyways if you do get it post pics

Well with 3% intrest spending cash if stupid in my book. But thats just me

[Artmasterx]

Originally Posted by bplewis24

How do you determine or estimate depreciation yourself? Do you use a schedule?

I'm a controller by trade so I do accounting and financial reporting for my company. I just recently made my personal 2013 budget and a 5 year savings plan. At least in theory, I plan on saving 6% of monthly income for maintenance, 6% for vacation/discretionary impulse spending, and 30% towards long-term savings (saving up for a house and/or other investments). This doesnt' count the very small amount ($50) I'm contributing pre-tax to a 401K each month. Now, I don't make a ton of money (above average), but I'm single, never married, no kids and have no debt (got through college on a football scholarship), which is why I'm able to save.

The one thing I can't get a good hold on is how to determine car depreciation. It's nothing like fixed assets, building improvements and other things. Any ideas?

I am not 100% sure, but I think he means how much you expect the car to depreciate in actual value. Probably not the depreciation an accountant would use for tax purposes. More like looking at the resale values in 1, 2, 3, ... years to determine how much money would be forfeit by reselling.

Side note, if you are forgoing any matching to your 401k, you should rethink the 30% allocation and put some towards your 401k to get the matching. If you don't get matching, some may suggest still upping your 401k portion unless you are saving all out for a house.

Originally Posted by jokergerm

Well with 3% intrest spending cash if stupid in my book. But thats just me

+1... if you have the $XXk cash to lay down on an M5, you can probably get a great interest rate on a loan, maybe <2% right now. A fairly safe bond fund from someone like PIMCO could probably safely get you 5%+ per year over 4 or 5 years (barring a monetary meltdown).

** I'm not an expert, so take it for what it's worth.

[kfriceman]

Originally Posted by jokergerm

Well with 3% intrest spending cash if stupid in my book. But thats just me

Here is how I buy cars. I know at some time I will need to replace a car for at least utilitarian purposes or because it is something I just want. This is premised on a 5-7 year occurrence.

I have a continual car payment to "me", that way I don't pay interest, I accrue it. When the timing is right, I source the car and pay in full and then the cycle continues for the next purchase.

-Kevin