A finance situation coming from a subscriber who has $100k Salary, $20k Savings, no debt, and looking to buy a home.
How’s it going everybody this is me the bush today i’m gonna go over another financial situation that a subscriber posted a comment on my previous videos before i begin you might notice there might be some machine noise right it’s because of a 3d printer it’s like located about 5 foot over there it takes forever to print things so basically it needs to be on like
24/7 in order to print anything so it’s gonna make a little bit of small amount of noise over there anyway let me go over what this ella yum says could you offer your input on my situation and you know you’re pretty brave ella for just you know putting your salary out there a lot of people don’t want to reveal their salary i have to say that sometimes it’s good
Sometimes it’s not depending on if the people that you know has a similar amount of salary if perhaps the people you hang out with they earn a little bit less all of sudden they might go oh you’re really rich you earn so much more and then sometimes it happens where they might expect you to pay more often or a bigger share of the check or something like that so
There’s like some issues with that but i mean i guess you revealed it in this comment anyway you said 100k salary 20k savings so far no debt so it almost sounds like you just started working maybe the first year even because you have 100k salary or maybe you have no debt because you paid off a lot of it that’s why savings is relatively low monthly rent 1450 sigh
All other monthly expenses roughly $300 a month which is crazy i mean you don’t have a car or something because $300 is usually just food and maybe a cell phone bill and that’s basically $300 a month so you’re not buying anything else you’re not like buying clothes you’re not paying for utilities you don’t have to pay for car insurance or like car gas i guess maybe
You’re just living in a very dense city you still have to pay for public transportation so i feel like this number might it sounds artificially low you might not have added everything that you actually pay i don’t i don’t know i just started my job out of school a few months ago okay that’s why you only have 20 k and you know debt oh i guess you know scholarships
Or parents paid for it it or something so i don’t know how soon it’s too soon to buy an apartment how soon is too soon i think it’s too soon if you buy and then it goes down and then you go oh i bought it too early right in terms of market pricing i mean all i know is that once this year is over is good riddance to high rent payment and living with a dirty person
So it sounds like you’re paying high rent living with someone else and you’re still paying one thousand four hundred fifty dollars in high cost of living area i’ll move into a relative’s house for a year if necessary but i would strongly prefer my own one-bedroom apartment to own so sounds like you have a relative that you could move into with and maybe you still
Need to pay rent a little bit maybe less than 1450 i live in a high cost of living town one-bedroom one-bathroom are commonly 400k yeah okay so i have a good idea of your situation because around here one-bedroom one-bathroom is also 400 k so coastal areas right either east coast west coast or something there there around there i am expecting a large bonus early
Next year should i put it all on a down payment and see for financial freedom but i don’t want to jump the gun you know i want to see something about buying a place because in my situation okay i saved up for a really long time in order to save up a giant downpayment at the time when i thought about buying it i actually could not afford to buy any big place because
My down payment was not enough and i don’t think i can even afford the mortgage payments because before the housing crash the housing prices was so high like it is right now that i felt like if i try to buy into something really really expensive i cannot afford it but it looks like you are aiming for something a bit lower so one bedroom one bathroom at the interest
Rate it is right now which is three and a half percent my easy mental calculation is every two hundred thousand dollars worth of mortgage that you’re taking on it’s gonna cost you about $1,000 in mortgage payments if you do a 30-year fixed-rate loan of three and a half percent so if you borrow of all four hundred k it’s gonna be a payment of two thousand dollars
But you’re probably gonna have a down payment hopefully you have $80,000 by then 20% i know you don’t absolutely need 20% you can pay less pay pmi or whatever but i think the recommended time frame is you know hold off until you get your 20% so it sounds like there’s some urgency that you want to move out within two months or so so even if you cannot afford a
Place which sounds like you can’t so on a 100 thousand dollar salary you’re getting about eight thousand dollars before tax after taxes six thousand dollars subtract your living costs so you save about four thousand i submit every single month though by the end of this year you’re gonna have about thirty thousand dollars which isn’t enough for a down payment for
A one-bedroom one-bathroom so logically it sounds like you could just go ahead and live with your relatives you know have assets payment you know however much they want to charge you save a little bit there while you’re living with them and then next year you’re gonna have enough to buy a place at the end you asked about full financial freedom but when you get a
Mortgage is not actually financial freedom here because once you get that you are locked in into paying the mortgage payment you cannot get away from it until you pay the whole thing off although if you are like super on top of it me you might be able to pay it off pretty early i’d say maybe seven eight years if you’re like really on top of it so i think you did not
Mean financial freedom i think you meant like being more independent as in like you’re living on your own you don’t have a roommate more freedom rather than financial freedom when you say financial freedom i think more of financial independence where you’re not actually dependent on the job for your salary you’re expecting a large bonus should i put it all towards
A down payment so even if you get a large bonus okay let’s say you get $10,000 which might be reasonable a reasonable amount if you’re making a hundred k it’s like ten ten percent 10,000 15,000 okay should you put it all towards a down payment so assuming you have twenty eight thousand and then you have another bonus of ten thousand let’s call it fifteen thousand
Dollars and have to lop off of a whole bunch of taxes then you get $10,000 and i think if you somehow wedge yourself in there and you are able to buy a place even with only 10% down you also have to add in a little bit more on top of that for all the closing costs and stuff it’s not just the 10% all the closing costs will add a few percent on top of whatever
Downpayment that you put historically it’s if you plan to keep it for a really long time then that’s a good time to buy but for some reason i got lucky because when i wanted to buy i actually could not afford it so i’m like looking around and you know i didn’t want to buy a small little apartment because when you do that when the market swings up you are sort of
Left out a little bit on the appreciation of the cost of the place dyanne alone homes appreciate the most townhouses appreciate a little bit less condos get a little bit less apartments even less than that so let’s say the whole housing market appreciated by 50% your condo might have only increased by let’s say 35 40 % so know that when you buy into something that
Is cheaper your chance of increasing your net worth i guess will be sort of leverage in a lesser extent i know this might be an option that you don’t even have access to because even if you want to buy someplace that is a real house rather than an apartment you don’t have a choice because you just don’t have that much income or you don’t have that much down payment
I just wanted to point that out because it could be an option because you could say ok i don’t have enough down payment to buy an apartment i’m just gonna save for a few more years until you do or maybe get your salary up higher so that you can buy a regular you know a real house i actually think you might actually be jumping the gun a little bit here because if
You only work for one year and you’re like oh i want to buy a house already for me i worked a few years before i actually could even afford it you can go and see if you can get pre-approved you know that’s a fun thing to do go to the bank and go oh how much you are you gonna lend me just scope out which houses that you want how much is it actually gonna cost how
Much you gonna loan now you say 400 k right so you know just ask for 400 k ask for 500 k and see if they approve you on this when you talk about living with a relative it sounds like that is the only other option you have you do have other options such as finding a new roommate maybe you can find one that is cleaner maybe you can find one that you can get along
With i totally get about this dirty roommate thing i don’t even want to live with roommates myself so you know i can’t say anything about that but if you’re willing to live with another roommate again this might be something you can do so let me go back to the thing where you say you’re only spending only $300 a month on your first year here it sounds like you are
Pushing it really hard there’s this whole polarizing thing like you’re somehow spending a crazy amount of rent fourteen hundred and fifty dollars and then you’re spending this tiny amount on everything else so it almost seems like you’re depriving yourself of a lot of joys even all your money is going into rent and then you’re like oh my gosh i’m spending a lot on
Rent i’m gonna skimp on everything else so i want to ask you if you feel like you’re skipping out on everything else are you like no i’m not gonna go eat out anywhere maybe your co-workers want to eat out and then you’re like no i want to save money that’s why you’re spending only $300 you’re bringing lunch all the time i want to advise that if this is something
That you’re doing because your budget sounds like it is i want to advise that maybe you should change your socializing habits with your co-workers even if they go all we’re gonna waste some money going to eat out at lunch or something i want to advocate going out one time a week just just allocate money for that right you’re gonna spend maybe $15 every single lunch
So you’re gonna spend another $60 about $300 that you’re spending but you have to know that there is some good to it okay when you socialize you increase your network right sometimes later on when you change jobs this is your first job right later on you might have good relationship with these persons that you went on lunch with and then you’re gonna know them
You might possibly know them that they move to other companies and then they’re go yeah you know ella is like a really great person you know i think they’re really cool and you know when you ask them about something you’re like oh i’m looking for a job this is a we for you to get another job later on so this is kind of like kind of like networking right but this
Is a little bit more natural because these are the people that you work with to socialize and get to know people as a real person you know so then they would actually recommend you later on i know a lot of the jobs that i got i actually knew people that knew someone else so then knowing people at your lunch table is actually a very positive thing so that’s it for
My recommendations um a lot of you guys are posting comments saying oh this is how much i earn this is my situation i’m wondering if this is getting boring for you guys because at some point i feel like it might get kind of redundant i’m like oh should you buy a house how do you buy a house you know what should you do with it personally i thought i covered almost
Every permutation already because i went with like 35,000 salary $50,000 salary $100,000 salary of $120,000 so i thought like four levels is enough but then i guess everybody has a different situation when you add in the permutations of how much savings you have like what year it is did you just graduate i guess you know if you guys like this i can just keep on
You know making new videos i always have a separate kind of opinion for each situation right a different kind of like experience type of thing because i think i’m i am definitely older than someone that just graduated and worked for only one year and you know i bought a house and then i can you know share my experience with this thanks for watching everybody i hope
That printer didn’t make too much noise it was like it just finished right there by the way should i show you guys what i’m printing hold on a second so over here are just finished printing a rubber band gun this is really cool because i can just put a rubber band on here like this and then and then i printed a vice it’s like multi piece right i think each one of
These like took like 12 hours to print and something else just finished printing it was supposed to be this slider thing that goes here this is a little vise thing so thanks for watching don’t forget to give me a like on this video and as always don’t forget to push the subscribe button and ring that bell icon thanks for watching
Transcribed from video
$100k Salary and Just Graduated By BeatTheBush