by May 24th, 2010. Filed under: Renting & Real Estate.
Bryant asked:
for a single guy (no kids) with a yearly income $120,000 and only debt is student loans $65,000
1. Investing- would it be ok to max invest in a profit sharing retirement plan with a company that matches $3 for your $1? And also invest and max a Roth IRA plan?
2. Student Loans- after consolidation, would $1000/month be a good plan?
3. Buying a House- what price range would be the best for a first-timer with this status and income
4. Buying a Car- I like to drive nice cars and get a new one often at least every 2 years. I already have a car I own, so would leasing be a good choice?
I also have excellent credit score. Have never been late on any payment. The area that I’m moving to upon graduation in May is Florence, SC.
PharmD- Pharmacist
student loan consolidation
for a single guy (no kids) with a yearly income $120,000 and only debt is student loans $65,000
1. Investing- would it be ok to max invest in a profit sharing retirement plan with a company that matches $3 for your $1? And also invest and max a Roth IRA plan?
2. Student Loans- after consolidation, would $1000/month be a good plan?
3. Buying a House- what price range would be the best for a first-timer with this status and income
4. Buying a Car- I like to drive nice cars and get a new one often at least every 2 years. I already have a car I own, so would leasing be a good choice?
I also have excellent credit score. Have never been late on any payment. The area that I’m moving to upon graduation in May is Florence, SC.
PharmD- Pharmacist
student loan consolidation
Filed under: Renting & Real Estate
May 27th, 2010 at 4:13 pm
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1. Excellent to max your retirement savings for full matching. Maxing retirement in first 5 years of employment can set up a nice nest egg with lots of time to grow for your retirement. Doing both Roth IRA and tax deferred retirement savings is excellent.
2. Good to get these paid off while you can, while you have no other obligations. However, with a favorable interest rate, you don’t want to pay them off entirely. So it depends, but yes, $1000/mo sounds good start.
3. SAVE for down payment on house. No more 0% down, and they’re a BAD idea anyway. With FHA need 3.5-5% minimum down payment and 10% is better. With 20% down you avoid PMI, an extra cost. Not more than 1/4 of your income for housing. Avoid interest only and ARM schemes, get fixed rate with largest down payment you can manage. Means waiting a year, planning for this. Don’t overextend yourself, buying more home than you can afford or need–most common mistake of first time homeowners.
4. Waste of money. Hopefully it’s your only indulgence. With leasing, you’re paying a set monthly fee over the years. It’s really a money thing, not a car thing. Costs are generally not deductible. Cars do rapidly depreciate. Suggest waiting on car until you have saved up down payment on home.
May 30th, 2010 at 3:41 am
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1. Definitely invest in the profit sharing plan. I think you make too much to qualify for a roth IRA (limit is currently around 70K for a single person) but those limits drop off within the next couple of years. At that time, yes, definitely invest in a roth.
2. I generally say to take the lowest rate and lowest payment you can get for a reasonable interest rate… then pay double or triple the payments if you’re able to. I paid double on mine until I move out of my parents house
3. Assuming you have good credit, a house with your income of about 10K per month, assuming you have 1K school loans payment per month and 1K other (car, credit cards, etc)… you could look at a house up to about 400K to still live very comfortably. I would advise if you don’t need a house valued at 400K though, definitely go lower. I’m not sure where you live but I’m from PA and a house at 400K is 5 bathrooms, 3 bathrooms on 2 acres of land. Do not even start looking until you have at least a 10% down payment in the bank (so anywhere from 30K-40K). Nothing is worse than owing more than your house is worth if the value drops- making a nice down payment will help to cushion that from happening.
4. I see no point to getting a new car every few years since they’re the worst investment you will ever make, but in your case leasing is probably better. You have the money for the down payment and the extra charges they create when you take it back after your lease term is up.
That’s just my take, if you make that much it might be a good idea to find a financial advisor to work with to help you invest and save for the things you want.
May 31st, 2010 at 8:44 am
Create a video blog…instantly.
I am curious to know about your Job position and your Degree. Do you mind sharing that with us?
June 1st, 2010 at 4:59 am
Create a video blog…instantly.
Your plan looks good. House under $140,000 to start slowly. Maybe you can cool it on the “i like to drive nice cars” and go cheap..