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Personal Finance Advice and Education! (10 Viewers)
- Thread starter No. 16
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Dentist
***Official FBG Dentist***
This. Except I think 20k is low, I'd never live with under 40k liquid savings and another 60 semi liquid.
What are you going to do when you need a new car, new furnace, meet your high deductible med insurance, cover a kidnapping ransom and then need to relax for a week in Barbados all at once? I prefer financial flexibility
skol asylum
Footballguy
Everyone prefers financial flexibility but unfortunately everyone doesn't get paid like a dentist and can afford that. IMO there ia nothing wrong with pulling money out of a retirement fund as a short term loan. Example: say you have $300k in your 401k. You pull out 10% in a 5 year $30k loan where you pay yourself back at 4.25%. Those funds could come from the conservative portion of your portfolio that was in bonds or cash anyways so it's not like you were planning on earning a ton from them anyways.
Dentist
***Official FBG Dentist***
Fair point but guys with 300k in a 401k don't need to borrow from it, it's guys with under 100k that shouldn't
Dentist
***Official FBG Dentist***
dino259
Footballguy
Doctor Detroit
Please remove your headgear
fred_1_15301
Footballguy
Yeah I think it's a good idea given your situation. I just got a 1 million policy for around 200.
hooter311
Footballguy
Dentist
***Official FBG Dentist***
ghostguy123
Footballguy
I have 25k liquid savings. Also a rental condo I could easily sell for 60k in a short time frame.
I was simply going for a discussion on whether or not it would make sense as opposed to a conventional loan based on interest rates. It apparently wouldn't. Point taken by everyone. Moving on.
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FUBAR
Footballguy
This is why it depends on your situation. Nobody really needs to buy a new car with little notice. The rest is circumstance dependent. If you have good medical insurance your deductible isn't that high.
What do you mean by liquid? Assume by semi liquid you're referring to stocks/bonds. There's no way I'd keep 40k in checking right now (in a few years perhaps) but if you're including funds easily sold (despite possible bad timing) then I'm on board.
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wilked
Footballguy
Good advice here. $1million is the least you can buy. As others noted it is cheap, and if sued they could go after future wages
The scenario you are worried about is driving home after dinner, something happens and you hit and kill a 30 year old doctor. That family will now sue you for his expected lifetime income, and will go after everything they can. Or a neighborhood kid is playing with your kids and a bad accident happens, etx
Dentist
***Official FBG Dentist***
1) people have to get a new car on short notice all the time when a wreck forces them to. My car is on liability only at this point. Also as someone who has to buy their healthy family insurance high deductible is the best choice for me. Everyone has a 5k deductible
2)semi liquid is my cash management account. In some stocks or income generating assets.
3) I firmly believe that the first 3 to 6 months of emergency money should have zero risk.
4) I'm definitely going to consider more umbrella money after reading some of those posts, thanks for those thoughts
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ghostguy123
Footballguy
The umbrella stuff is interesting and something I will consider down the line.............................pretty far down the line, maybe 15 years or so.
Question in relation to that. If you get sued can they come after your 401k/403b? Off hand I would think yes.
Question in relation to that. If you get sued can they come after your 401k/403b? Off hand I would think yes.
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FUBAR
Footballguy
1) no, you don't need to buy a new car - you might want a new car but repairs or buying used and inexpensive are options if that situation arises. Understand that high deductible might be the best choice. I misspoke, ours is only 1k for a year.
2) ok
3) I won't argue about that, just to say that everyone needs to assess their own needs. 6 months is a fine baseline for most people.
4) I haven't really thought about umbrella insurance recently, probably time to reassess.
It's interesting to see different perspectives on this stuff. For a guy like dentist, whose goal includes retiring as soon as possible, insuring as much as possible and being more conservative makes a lot of sense. For a guy like me, I'd guess our net worth is a quarter of what he has - but we are virtually assured of a nice pension and not looking to totally stop working in the next 25 years, more risk can be taken.
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Random
Footballguy
You have rental properties, you need umbrella insurance. You need to fire whatever insurance agent you are working with immediately.
wilked
Footballguy
I was thinking the exact same thing. If ever a circumstance called for umbrella insurance, it is being a landlord
Had a plan to buy a new car at years end, but there's a slow leak in my AC line on the car I was going to trade in; which fixing it will cost about 25% of what the car is work....so now I have to buy a car within a month or so (depending on how slow the leak is - just topped the freon off)....sucks. Especially b/c we're looking at the brand new model pilots. I hate having to buy something that brand new....but the new model fits everything we're looking at.
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ghostguy123
Footballguy
Even with just one rental property worth maybe 65k?
I thought people were saying your net worth should be nearing 7 figures before considering umbrella? I am not close to that
Although what, 200 a year for up to a million? Sounds like a great deal actually.
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otello
Footballguy
interest rate is relevant.
ghostguy123
Footballguy
FUBAR
Footballguy
"As is"
personally I'd feel guilty selling it to a consumer. Not so much to a dealer who can fix it easily enough.
FUBAR
Footballguy
Doctor Detroit
Please remove your headgear
No, you seem to fit the bill with a rental. If you own a dog it's a slam dunk imo.
FUBAR
Footballguy
Steve Tasker
Footballguy
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Random
Footballguy
ghostguy123
Footballguy
So is the going rate on this umbrella insurance roughly 200 bucks a year for up to a million in coverage?
yeah, i'm not messing with selling it to a consumer. either trading it in to the dealership or carmax
ghostguy123
Footballguy
Man trading a car in to a dealership and buying a car at a dealership is a total double smack on the wallet.
Random
Footballguy
ghostguy123
Footballguy
Cool thanks. I will have to ask my insurance agent about that.
Seems like with rental property it's a good idea even with a much lower net worth just due to the increased risk of some jackwad tenant doing something stupid.
slackjawedyokel
Footballguy
Umbrella coverage varies but generally costs more based on number of properties and vehicles owned, as well as driving records. Remember, you can kill someone on your boat or motorcycle... Be sure they are endorsed on the umbrella policy.
Dentist
***Official FBG Dentist***
Sorry, by new I meant new to me. Meaning if your car is totaled you may need a car of some sort. Obviously you can get a car very inexpensively if needed. I guess I want to be prepared to buy the car that's going to work for me for the next 10 years if something happened to mine instead of needing an interim vehicle.
Pensions make for very interesting equations when it comes to figuring a retirement out. They sound great, yet at the same time I kind of like choosing my own adventure with my own investments. I agree that with a solid pension you could certainly take some gambles with your Roth IRA or other assets.
Go look at AcerFC's car buying thread. Makes the purchasing easy.
With respect to the trade in, it's just not worth my time to facilitate selling it by myself to make an extra grand or so.
Dentist
***Official FBG Dentist***
KC might think i'm worth more than I am, or he may be much older than I am, or may have very low retirement expectations
Random
Footballguy
You may be surprised with the amount you can make selling your car on your own. We recently bought a new car and considered three options with our old one.Go look at AcerFC's car buying thread. Makes the purchasing easy.
With respect to the trade in, it's just not worth my time to facilitate selling it by myself to make an extra grand or so.
1) We looked up what they we listed at on Ebay/Craigslist/Autotrader. About 10K.
2) Took it to Carmax. Offer was 4K.
3) Trade in on new car. Offer was 3K.
We listed it and sold it within a week for $9200.
lumpy19
Footballguy
Except it's ugly.
Seriously though, buying a brand new model adds some risk, there are always bugs to be worked out in something brand new
That seems like a pretty unusual spread. The two times I've done this Carmax ended up giving me very close to Bluebook and market value, and the dealership matched Carmax's offer.You may be surprised with the amount you can make selling your car on your own. We recently bought a new car and considered three options with our old one.Go look at AcerFC's car buying thread. Makes the purchasing easy.
With respect to the trade in, it's just not worth my time to facilitate selling it by myself to make an extra grand or so.
1) We looked up what they we listed at on Ebay/Craigslist/Autotrader. About 10K.
2) Took it to Carmax. Offer was 4K.
3) Trade in on new car. Offer was 3K.
We listed it and sold it within a week for $9200.
Random
Footballguy
Carmax told us it was considered "high mileage" and they would send it to auction. We had the dealer at their bottom dollar before we said anything about a trade in, so there were no games to be played there. This was an 08 CRV with 165,000 miles on it. Ebay still seems to be at 9-10K.That seems like a pretty unusual spread. The two times I've done this Carmax ended up giving me very close to Bluebook and market value, and the dealership matched Carmax's offer.You may be surprised with the amount you can make selling your car on your own. We recently bought a new car and considered three options with our old one.Go look at AcerFC's car buying thread. Makes the purchasing easy.
With respect to the trade in, it's just not worth my time to facilitate selling it by myself to make an extra grand or so.
1) We looked up what they we listed at on Ebay/Craigslist/Autotrader. About 10K.
2) Took it to Carmax. Offer was 4K.
3) Trade in on new car. Offer was 3K.
We listed it and sold it within a week for $9200.
dino259
Footballguy
I need to do this now. Didn't have the car we were trading in with us when we ended up buy our 2014 Pilot. I know you get more selling it yourself but it just isn't something I look forward too. Same with buying the car. Didn't really care that I got a lower price than everyone, just wanted a good price without getting bent over.Carmax told us it was considered "high mileage" and they would send it to auction. We had the dealer at their bottom dollar before we said anything about a trade in, so there were no games to be played there. This was an 08 CRV with 165,000 miles on it. Ebay still seems to be at 9-10K.That seems like a pretty unusual spread. The two times I've done this Carmax ended up giving me very close to Bluebook and market value, and the dealership matched Carmax's offer.You may be surprised with the amount you can make selling your car on your own. We recently bought a new car and considered three options with our old one.Go look at AcerFC's car buying thread. Makes the purchasing easy.
With respect to the trade in, it's just not worth my time to facilitate selling it by myself to make an extra grand or so.
1) We looked up what they we listed at on Ebay/Craigslist/Autotrader. About 10K.
2) Took it to Carmax. Offer was 4K.
3) Trade in on new car. Offer was 3K.
We listed it and sold it within a week for $9200.
I've got some contacts with a used car dealership and he says you should expect about $1-2k above KBB/auto trader. Not sure if yours was a one off or not, but my KBB is only $5500....and I've been checking craigslist for similar makes/models/mileage.You may be surprised with the amount you can make selling your car on your own. We recently bought a new car and considered three options with our old one.Go look at AcerFC's car buying thread. Makes the purchasing easy.
With respect to the trade in, it's just not worth my time to facilitate selling it by myself to make an extra grand or so.
1) We looked up what they we listed at on Ebay/Craigslist/Autotrader. About 10K.
2) Took it to Carmax. Offer was 4K.
3) Trade in on new car. Offer was 3K.
We listed it and sold it within a week for $9200.
ghostguy123
Footballguy
I used to use craigslist and it was great, but it has turned into a crapfest of crap people and I can never get anything done using it anymore.Go look at AcerFC's car buying thread. Makes the purchasing easy.
With respect to the trade in, it's just not worth my time to facilitate selling it by myself to make an extra grand or so.
I was directed towards a facebook classified group for my local area, as in within a 5-10 mile radius of where I live, and it has been fabulous. Not just for cars but anything really. Since people are so close it's much easier to get people to come see stuff, and also to go see stuff. Plus since people's names are attached to the stuff they have it makes scamming way harder.
I haven't sold a car yet, but I have sold like 5 other things all in less than 24 hours for each.
I will check out the car thread. I think I did read a little on it where he sent out a message to like 5 places just going with the best price someone would offer. Good idea.
Dealerships suck compared to private party cause of their awesome convenience of financing they are able to give people. My ex brother in law is a car salesman, and he is the absolute textbook definition of the dweeb you expect to come running out to you when you go look around and dont want to be bothered. If ya get him a little drunk on occasion he will tell ya how big of a ripoff it is to trade in a car, to buy a car from them, and how much of a jackpot it is for them when BOTH happen.
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