So I have a friend… He is very intelligent and works as a software engineer. In the last 12 months he relocated to Seattle from Dallas to accept a job with a similar salary to the one here but much higher expenses.

1. Rent – Dallas it was around $1200/mo for a nice 2 bedroom place. Seattle in a neighborhood he considers a huge downgrade, the rent is $2400/mo. He wants to upgrade to a $3k/mo apartment.
2. Salary – I don’t know the exact number, I’m guessing it’s around $80k/year.
3. Insurance – He has multiple accidents on his record. His Hyundai coupe was financed for around $35k and he had negative equity on the car that he traded in and needed some major repair work on before. He had an umbrella policy but recently his provide dropped him because they deemed him too high risk.
4. Total debt – His number was around $80k and a big chunk of that is medical debt, credit card debt and I’m sure some of his rent that he put on the card to get points. My friend is a good person but also likes to live a fancy lifestyle. In April he sounded serious about getting the total amount down. He considered bankruptcy at one point before some other friends put together a financial budget for him. Say $80k at 20%/yr. Not factoring in principal payments that is $16k in interest.
5. Retirement – He’s taken out 401k loans / stopped contributing to pay off debts. I’m going to go out on a limb and say that in his late 20s, there is close to $0 in retirement.
6. Auto debt – So his Genesis coupe needed new shocks, he couldn’t get the factory ones for his car. Those would probably run around $800 with parts and labor included. He needed to get some expensive racing ones that wound be a total installed cost of about $2k. Due to his poor credit / high interest rate, negative equity and extremely high mileage, he was upside down about $6k on his car. He took it in for service and discovered his transmission was cracked. Cracked means it’s only a matter of time before there is some type of catastrophic failure. With the accidents and 72k on the powertrain I’m pretty sure a warranty would not cover it… The trim pieces have also been flying off the car probably because of the automatic car washes he was taking it to at least once a week… So what does he do?He leased a car with a base price of $55k, a 5.0L Hyundai Genesis v8 sedan. Sure the thing is a beast but his payment is $900. Over 36 months he pays $32,400. That is factoring in $8k he got for the trade-in, tax and maintenance. Suddenly the $541 / $32,460 after 60 months for a car I get to keep doesn’t seem nearly as bad.  I want to slap my head sometimes. My friends don’t know about this blog, nor do they ask for my feedback on anything related to money. I’m not perfect but I have a few accomplishments under my belt.

Looks can be deceiving…

I’m a millennial and I never had avocado toast nor do I drink $4 coffees. However I urge you to read the blog post by Ramit Sethi – LOL at this avocado toast advice from a millionaire.

Original: Millionaire to Millennials: Stop Buying Avocado Toast If You Want to Buy a Home http://time.com/money/4778942/avocados-millennials-home-buying/

Freely spending on avocados — the pricey, popular superfruit beloved by young people — may be one of the reasons why some young people can’t afford a house, according to Australian millionaire and property mogul Tim Gurner.

“When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each,” Gurner told the Australian news show 60 Minutes.

I’m lacking the mental focus / time / energy to write a well thought out post so happy reading. 😛

https://soundcloud.com/beyonddebtfreeg/debtfree-32-episode-1

My rambling about money and life. 😛 Episode 0 got 14 listens lol…. 😛

I’ve been in my apartment complex since December 2014. My neighbors are friendly, the grounds are well-kept, maintenance is fairly receptive, and the location is great for my job / social circle.

Currently my rent is about $843/mo. I consider this on the lower end of the spectrum for what passes as safe and livable.

Just because someone lives in a fancier apartment is no guarantee of increased safety. or higher living standards. The below image was posted to Facebook by a friend and happened just last week in Plano. In the comments a guy said his bike was stolen out of his garage of another place, when his rent was the highest of his entire life. In the “ghetto” he never had such problems. Bad things can happen anywhere.

Let’s say a starter home here in the North Dallas area goes for $150k.

20% Down: $30k
10% Closing costs: $15k
Taxes per year 3%: $4500
Fixed Mortgage Rate: 3.5% 15yr mtg = $858/mo * 12=$10,296
Fixed Mortgage Rate: 4.2% 30yr mtg = 590/mo * 12=$7,080
So for the first year costs would be approximately $60k and about $15k per year after that assuming no maintenance costs. Some say put 2% aside for maintenance. That adds an additional $3k/yr. Also say $200/mo for HOA. That’s about $20k/yr for a house. For a 30 yr mortgage: about $58k the first year and $14k/yr after that.

Long story short unless my income hits $100k+ I probably won’t be buying a house anytime soon. At 33 I think it would be more of a burden than anything else. Aggressive ramp-up of my retirement in these coming years. Soon as the credit card is gone I think I can comfortably set aside over $1000-1500 more a month toward it than I do today. Bedtime… zzzz