Struggling financially and getting frustrated? | Page 2 | GTAMotorcycle.com

Struggling financially and getting frustrated?

blackcamaro

Well-known member
Why is a 40 year old guy with limited savings financing a new sea doo? The truck is one thing but the sea doo has to go asap. The truck should be gone as well but baby steps I guess.

Before even considering a home he needs to get rid of all debt and have a 6 month emergency fund sitting in a HISA. At that point he can evaluate if he wants to start working towards a down payment on a property or just investing for retirement. No sense worrying about a house at this point when he needs to fix the underlying issues.

Payments are the devil. Until he gets rid of the monthly payments he is likely to feel like he is financial struggling. The good news is at 40 he still has time but he is behind so it's time to step on the gas and get the finances in order. A fee based financial advisor would likely be a good place to start but he needs to outline some goals first. Most of the bank financial advisors are sales people that just want to push customers into that banks mutual funds.

Hope it works out for him. Feeling constantly behind is the worst.
 

sburns

Well-known member
Ok this could get long winded.
A guy I know is struggling financially in his mind. Can’t seem to let go of the home ownership expectations.
Has saved very little if anything.
Drives new truck making payment
Has new Sea-doo making payment
Buys every tool he could ever need for any trade. I mean everything.
But complains he’s broke and needs to do something different.
But he has in my opinion missed the boat when it comes to owning a home.
How could anyone get into the housing market on a single income of around $60,000yr is it possible?
Is income the problem here?
Working in Toronto could expect $10hr more money but can’t buy there.
Moving away from Durham region can reduce housing costs but also income potential
Commuting comes with its own expenses

I bought a fixer upper in 1999 that I almost tripled my money on In 9 years.
I was 21 years old and bought with my now wife. $57,000 😂
Then into my current home that I paid $280,000. Probably over $700,000 now If we were to sell.
So on the out side to him I live in a $700,000 house and I’m telling him he can’t do it on almost the same income with no kids or wife to support.
If it weren’t for that early start I don’t think I’d be in any different spot. I’ve never made great money just got lucky I guess.
These threads seems to pop up now and then, so I was curious and ran some rough numbers for you.

Again rough numbers, I didn't include the seedoo at all, but leaving things as is and guessing this is what I came up with. Now I would say it's is just barely possible. But again I don't know how much that tool fetish is costing them, but they are not far off from being broke each month. Rate from Ratehub (pickering area), 5% down, not great.

$60,000 after taxes = $45,501

$3792 monthly

-- Basic living Expenses p/m --
$1200 Rent
$65 Mobile
$60 internet
$300 groceries

$1625 total


-- Vehicle Expenses --
New truck $25,000 - $5000 down payment
$20,000 over 48 months 0% = $417

Insurance $1700 / 12 = $141

Gas yearly $2500 / 12 = $208

$766 Total

-- Disposable income ---
$1401

-- House --
$450,000 / 0.05% = 22500 / 1401 = 16 months

Mortgage 444,600 @25y rate 1.89% = $1859 payment

$1859 is higher then disposable but since we are not paying rent (+1200).

$2601 - $1859 = $742 left

If he get's his expenses in order, and disciplines his spending habits it might be possible for them to purchase a home. A side hustle would be helpful. But as you can see there is very little left for any kinda of savings or life enjoyment.

If my numbers are out of wack please just correct them.
 

GreyGhost

Well-known member
Site Supporter
If the kid wants to make this work they need to think outside the box. Ditch the jetski is an easy first step. Lots of other good ideas above.

I would also add that he probably needs more help than just a basement tenant. My first choice would be a joint purchase with one or two friends in a similar situation. Spend some money on the lawyer up front. Basically they all throw in 30 to 50 so it opens up housing options. At a pre-agreed time (5 or 10 years) they sell it and split the proceeds. That should leave each person with 100 to 150 to put down on their next house. I know some people that went this route and it worked out. If he decides to try and buy something by himself, I would live in the basement and rent the big nice part of the house. The extra 500-1000 a month from that play adds up quick.
 

GreyGhost

Well-known member
Site Supporter
These threads seems to pop up now and then, so I was curious and ran some rough numbers for you.

Again rough numbers, I didn't include the seedoo at all, but leaving things as is and guessing this is what I came up with. Now I would say it's is just barely possible. But again I don't know how much that tool fetish is costing them, but they are not far off from being broke each month. Rate from Ratehub (pickering area), 5% down, not great.

$60,000 after taxes = $45,501

$3792 monthly

-- Basic living Expenses p/m --
$1200 Rent
$65 Mobile
$60 internet
$300 groceries

$1625 total


-- Vehicle Expenses --
New truck $25,000 - $5000 down payment
$20,000 over 48 months 0% = $417

Insurance $1700 / 12 = $141

Gas yearly $2500 / 12 = $208

$766 Total

-- Disposable income ---
$1401

-- House --
$450,000 / 0.05% = 22500 / 1401 = 16 months

Mortgage 444,600 @25y rate 1.89% = $1859 payment

$1859 is higher then disposable but since we are not paying rent (+1200).

$2601 - $1859 = $742 left

If he get's his expenses in order, and disciplines his spending habits it might be possible for them to purchase a home. A side hustle would be helpful. But as you can see there is very little left for any kinda of savings or life enjoyment.

If my numbers are out of wack please just correct them.
A decent shot at it. Missing property tax, home insurance, maintenance etc after the purchase.
 

GreyGhost

Well-known member
Site Supporter
My brother has some more time but is not that far off you buddy. He is 30 something and has always rented. Often making strange choices like tenting an hour away from work which eliminates a major upside of rental. His personal image requires him to have a truck and a boat (no payments on either right now but operating costs add up). Suggesting that those are easy avenues for saving makes him grumpy. His wife is bat **** crazy worried about the kid falling out of the current boat to the point of forbidding him to take the kid in the boat so he is going to sell it and get a new one built (probably needs to add 20 or 30K). Frig me. The kid is in a life jacket, just pluck him out and save the money. A typical year has them breaking even with current expenses and income. My wife and I bought a small house a decade ago and have been able to accumulate real-estate equity. My brother gets discouraged when he sees our house compared to his crappy rental and my mortgage payment is the same as his rent. They just arent willing to make sacrifices to get on the ladder.
 

Mad Mike

Well-known member
These threads seems to pop up now and then, so I was curious and ran some rough numbers for you.

Again rough numbers, I didn't include the seedoo at all, but leaving things as is and guessing this is what I came up with. Now I would say it's is just barely possible. But again I don't know how much that tool fetish is costing them, but they are not far off from being broke each month. Rate from Ratehub (pickering area), 5% down, not great.

$60,000 after taxes = $45,501

$3792 monthly

-- Basic living Expenses p/m --
$1200 Rent
$65 Mobile
$60 internet
$300 groceries

$1625 total


-- Vehicle Expenses --
New truck $25,000 - $5000 down payment
$20,000 over 48 months 0% = $417

Insurance $1700 / 12 = $141

Gas yearly $2500 / 12 = $208

$766 Total

-- Disposable income ---
$1401

-- House --
$450,000 / 0.05% = 22500 / 1401 = 16 months

Mortgage 444,600 @25y rate 1.89% = $1859 payment

$1859 is higher then disposable but since we are not paying rent (+1200).

$2601 - $1859 = $742 left

If he get's his expenses in order, and disciplines his spending habits it might be possible for them to purchase a home. A side hustle would be helpful. But as you can see there is very little left for any kinda of savings or life enjoyment.

If my numbers are out of wack please just correct them.
2 things that I would adjust.

1) On a $60K gross income with no debt and no equity it would be difficult to get more than a $285K mortgage. Riskier lenders might go to $350K but you're probably looking at >4% interest.
2) Savings rate would be more like $800/mo as it would be wise to use first time buyer option on an RSP. $800 * 16 mo + $6K tax rebate = $18,800, which is 5% down on the max he could mortgage.
 

sburns

Well-known member
A decent shot at it. Missing property tax, home insurance, maintenance etc after the purchase.
Yes I wasn't factoring just was curious if they could get to the "door", pun intended. But yes it would be hard or impossible to continue after purchase.
 

Mad Mike

Well-known member
My middle kid just bought his first house, it closes on Monday. He's a 1995 millennial, been working and living on his own since finishing university 5 years ago. He managed to save $50k in that period by putting aside $175 each week - he took the simple advice I mentioned above and now he's in the game.

He's always had roommates and kept his rent/utilities under $900/mo and bought a modest Jeep Patriot when he graduated.

It can be done, it just takes discipline.
 
a little off topic but this whole pandemic sure has confirmed my suspicions how little savings the average person or couple has these days. Living one payment to the next. Can't even go a month or two without having to defer mortgage payments or crying for some sort of government assistance. Pretty crazy to me how many people don't have at least 10-20 grand set aside incase they lost their job for 6 months.
 

GreyGhost

Well-known member
Site Supporter
a little off topic but this whole pandemic sure has confirmed my suspicions how little savings the average person or couple has these days. Living one payment to the next. Can't even go a month or two without having to defer mortgage payments or crying for some sort of government assistance. Pretty crazy to me how many people don't have at least 10-20 grand set aside incase they lost their job for 6 months.
Unless people can punt their mortgage, 10 to 20K doesnt last long. I dont know if 10K could last any normal family 6 months.
 

Jayv

Well-known member
Site Supporter
a little off topic but this whole pandemic sure has confirmed my suspicions how little savings the average person or couple has these days. Living one payment to the next. Can't even go a month or two without having to defer mortgage payments or crying for some sort of government assistance. Pretty crazy to me how many people don't have at least 10-20 grand set aside incase they lost their job for 6 months.
My feeling is if a wave 2 comes, there will be lots of folks hurting. The bail out money won't be there this time. Meanwhile at my work we are selling cars like hot cakes-probably most of them financed. I dunno, ppl see the world differently than i do i'm guessing.
 

jc100

Well-known member
My feeling is if a wave 2 comes, there will be lots of folks hurting. The bail out money won't be there this time. Meanwhile at my work we are selling cars like hot cakes-probably most of them financed. I dunno, ppl see the world differently than i do i'm guessing.
dammit....I was hoping to pick up a COVID used car deal ....that’s not good news for me. I can be patient though....I was expecting some people in over their heads to start returning cars.
 

Jayv

Well-known member
Site Supporter
dammit....I was hoping to pick up a COVID used car deal ....that’s not good news for me. I can be patient though....I was expecting some people in over their heads to start returning cars.
Everyone who took transit before are now buying cars is my guess .
 

PrivatePilot

Ironus Butticus
Site Supporter
If he owns not only a vehicle he's making payments on but TOYS he's making payments on as well (and tools out the ass, etc etc etc), well, this is a situation where he's just making piss poor decisions.

When we bought our house we lived freakin' frugally. I actually ended up unemployed for the first 12 months (unexpected major medical issue) and we still managed. But we didn't have any toys. We had 2 old paid for cars in the driveway, neither of which cost more than $3000 when we bought them. We certainly didn't eat out much that year and I did all our own home repairs myself.

That aside, buying anything in the city on that sort of money isn't gonna happen unless he's willing to be creative and buy something with a rental basement that can pay 50% of his mortgage or something. But if the guy can't figure out that he's spending all his money and then acts surprised he doesn't have any money, CAN he think outside the box like that to begin with and make it actually work?
 

regder

Well-known member
Site Supporter
Stole this from Reddit, seems fitting

1596249628751.png
 

PrivatePilot

Ironus Butticus
Site Supporter
"Federal Truth In Lending" something or other on there above that box.

It's a great idea and I think a lot of credit cards even have that on their monthly mailings now, but people just F'ing ignore it because they want what they want. Who cares if that $50K pickup truck costs me $100K when it's a $2500 piece of rust in 10 years before I even finish paying for it - gotta have it.

This should be in big huge letters on the windshield of every single vehicle someone wants to finance. Toys, as well. It's too late putting it on the receipt once people have already signed on the dotted line, or are about to and have a huge boner about to get their keys to that new ride.
 

SVeezy

Well-known member
This should be in big huge letters on the windshield of every single vehicle someone wants to finance. Toys, as well. It's too late putting it on the receipt once people have already signed on the dotted line, or are about to and have a huge boner.
Wouldn’t make a difference unfortunately. They’ve already made their decision by that point. It’s like making 25% of a smoke pack a warning... then another 35% a horrible picture... and I may be wrong but aren’t they all one big warning pic now. I doubt it stopped many purchasers.

For the spenders it’s “what can I afford right now”. Been there, thankfully for myself I wanted more.


Sent from my iPhone using GTAMotorcycle.com mobile app
 

K20EF8

Well-known member
These threads seems to pop up now and then, so I was curious and ran some rough numbers for you.

Again rough numbers, I didn't include the seedoo at all, but leaving things as is and guessing this is what I came up with. Now I would say it's is just barely possible. But again I don't know how much that tool fetish is costing them, but they are not far off from being broke each month. Rate from Ratehub (pickering area), 5% down, not great.

$60,000 after taxes = $45,501

$3792 monthly

-- Basic living Expenses p/m --
$1200 Rent
$65 Mobile
$60 internet
$300 groceries

$1625 total


-- Vehicle Expenses --
New truck $25,000 - $5000 down payment
$20,000 over 48 months 0% = $417

Insurance $1700 / 12 = $141

Gas yearly $2500 / 12 = $208

$766 Total

-- Disposable income ---
$1401

-- House --
$450,000 / 0.05% = 22500 / 1401 = 16 months

Mortgage 444,600 @25y rate 1.89% = $1859 payment

$1859 is higher then disposable but since we are not paying rent (+1200).

$2601 - $1859 = $742 left

If he get's his expenses in order, and disciplines his spending habits it might be possible for them to purchase a home. A side hustle would be helpful. But as you can see there is very little left for any kinda of savings or life enjoyment.

If my numbers are out of wack please just correct them.
$300 per month is too low on groceries imo, at least for a man. Thats $10 a day, $3.33 per meal. Sure it can be done if your eating a lot of processed garbage.
What about clothes, shoes shavers, soap and all the little things every month that add up etc etc
What new truck are you buying that is $25K? Try $50K
$48 a week for gas for a truck? Maybe if you only drive 300km a week.
You forgot the CMHC scam mortgage "insurance", tack on another $20K to his mortgage.
Add in $500 a month for property tax, $300 a month for maintenance. Then heat, hydro, property insurance etc
What about vehicle maintenance? Another $500-$750 a year for a newish vehicle/truck.
No bank is going to give him a $450K mortgage with little down unless he is making well over $100K
 
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K20EF8

Well-known member
a little off topic but this whole pandemic sure has confirmed my suspicions how little savings the average person or couple has these days. Living one payment to the next. Can't even go a month or two without having to defer mortgage payments or crying for some sort of government assistance. Pretty crazy to me how many people don't have at least 10-20 grand set aside incase they lost their job for 6 months.
Tough to have money set aside when housing costs are out of control
 

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