Author Topic: My class mate and the waste of money  (Read 9257 times)

Bearded Man

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My class mate and the waste of money
« on: November 12, 2015, 03:12:17 PM »
She is about to finish her Masters Degree in Finance. She rents. She bought an SUV and financed it over 3 years, to the tune of $1,500 a month payments.

She has all kinds of expensive tastes. But is absolutely clueless about money. Somehow she actually works in finance (as a loan officer...). She doesn't have money to blow, she only makes about 60K a year.

No Name Guy

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Re: My class mate and the waste of money
« Reply #1 on: November 13, 2015, 01:01:26 AM »
3 years at 1,500 / month is....54,000 in payments.  That is either one pricey SUV or she's getting bent over on the interest rate or some combination thereof.  WTF Batman?!?!? 

MrMoogle

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Re: My class mate and the waste of money
« Reply #2 on: November 13, 2015, 07:09:02 AM »
Well ya, as a loan officer, her job is to get people to take out loans for things people don't really need.  She needs to lead by example.

JordanOfGilead

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Re: My class mate and the waste of money
« Reply #3 on: November 13, 2015, 07:56:45 AM »
3 years at 1,500 / month is....54,000 in payments.  That is either one pricey SUV or she's getting bent over on the interest rate or some combination thereof.  WTF Batman?!?!?
54k is about right for a large SUV like a Yukon or Suburban.

vivophoenix

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Re: My class mate and the waste of money
« Reply #4 on: November 13, 2015, 08:09:27 AM »
She is about to finish her Masters Degree in Finance. She rents. She bought an SUV and financed it over 3 years, to the tune of $1,500 a month payments.

She has all kinds of expensive tastes. But is absolutely clueless about money. Somehow she actually works in finance (as a loan officer...). She doesn't have money to blow, she only makes about 60K a year.

not making her car payment okay.

but i would kill to have made $60k out of school. thats a huge step up in income from broke grad student. she was probably used to he being a broke student and now having 60k to play with is a huge jump in spending power. it sounds like she needs to be reminded that $60k doesnt last forever.

also if she is still in school, and took out any loans, she hasnt had to make payments yet. shes kinda living in a dream world at the moment.

Fishindude

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Re: My class mate and the waste of money
« Reply #5 on: November 13, 2015, 08:32:37 AM »
Yeah, I was killing time and looking at new Ford pickups last weekend.
Nice four door F-150's run anywhere from high 40's to about $64,000, so that price isn't hard to imagine.

She won't be handling my finances.
My neighbors wife isn't a CPA but does bookwork and accounting for several small business.  They went bankrupt a couple years ago and owed over $275,000 on a home that sold for $60,000.   Same deal; new vehicles, expensive trips, entertainment, remodeling, campers, toys, etc. all on credit.
Scary thing is a few people still use her for their bookwork?

vivophoenix

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Re: My class mate and the waste of money
« Reply #6 on: November 13, 2015, 08:37:32 AM »
Yeah, I was killing time and looking at new Ford pickups last weekend.
Nice four door F-150's run anywhere from high 40's to about $64,000, so that price isn't hard to imagine.

She won't be handling my finances.
My neighbors wife isn't a CPA but does bookwork and accounting for several small business.  They went bankrupt a couple years ago and owed over $275,000 on a home that sold for $60,000.   Same deal; new vehicles, expensive trips, entertainment, remodeling, campers, toys, etc. all on credit.
Scary thing is a few people still use her for their bookwork?

Why is it scary?

can she no longer read or add?

she isnt their financial/life guru, she is the person they pay to tally things

Fishindude

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Re: My class mate and the waste of money
« Reply #7 on: November 13, 2015, 08:49:22 AM »
Why is it scary?

can she no longer read or add?

she isnt their financial/life guru, she is the person they pay to tally things



General rule of thumb is someone that can't look after their own finances, probably isn't going to do a very good job looking after yours.

vivophoenix

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Re: My class mate and the waste of money
« Reply #8 on: November 13, 2015, 08:53:01 AM »
Why is it scary?

can she no longer read or add?

she isnt their financial/life guru, she is the person they pay to tally things



General rule of thumb is someone that can't look after their own finances, probably isn't going to do a very good job looking after yours.

shrug, if her job is just to add everything up, and present me a receipt i dont see it as a big deal.

there are tons of people, who handle money every day, that are terrible with their own personal financials.

using that rule of thumb, there would be a lot of jobless people.

SwordGuy

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Re: My class mate and the waste of money
« Reply #9 on: November 13, 2015, 09:02:48 AM »
Why is it scary?  Because people who owe shitloads of money are a security risk, that's why.

You don't want people handling your money if they either:

1) owe lots of money they can't pay back, or
2) have lifestyle choices that they are afraid of others finding out about.

That's also true for government security clearances, and for good reason.

Fishindude

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Re: My class mate and the waste of money
« Reply #10 on: November 13, 2015, 09:03:16 AM »
She does small business accounting; payables, receivables, payroll, etc. for small businesses.
Not talking about a cashier at Macdonalds.

Papa bear

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Re: My class mate and the waste of money
« Reply #11 on: November 13, 2015, 09:03:54 AM »

Why is it scary?

can she no longer read or add?

she isnt their financial/life guru, she is the person they pay to tally things



General rule of thumb is someone that can't look after their own finances, probably isn't going to do a very good job looking after yours.

shrug, if her job is just to add everything up, and present me a receipt i dont see it as a big deal.

there are tons of people, who handle money every day, that are terrible with their own personal financials.

using that rule of thumb, there would be a lot of jobless people.

Agree.  A bookkeeper doesn't handle your funds.  They write it down.  They really aren't there to make recommendations.

Also, loan officer does not equal a finance job.  A loan officer is a salesman, nothing more.

But yes.  People buy stupid things.  Even when they have been trained to know better.  Economists make the mistake that humans are rational with their spending.  Clearly they are not!


Sent from my iPhone using Tapatalk

Fishindude

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Re: My class mate and the waste of money
« Reply #12 on: November 13, 2015, 09:27:10 AM »
Also, loan officer does not equal a finance job.  A loan officer is a salesman, nothing more.

I've got to disagree with this.
Most loan officers I am familiar with are also required to do extensive underwriting to determine if the borrower has the ability to repay the loan, adequate collateral, etc.   They also have to get involved in collection and foreclosure on loans that go bad.

I think what you are describing is the "mortgage broker" types who don't even retain or service the loan at their place of business.
Most of these guys are snake oil salesmen.

vivophoenix

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Re: My class mate and the waste of money
« Reply #13 on: November 13, 2015, 09:37:13 AM »
She is about to finish her Masters Degree in Finance. She rents. She bought an SUV and financed it over 3 years, to the tune of $1,500 a month payments.

She has all kinds of expensive tastes. But is absolutely clueless about money. Somehow she actually works in finance (as a loan officer...). She doesn't have money to blow, she only makes about 60K a year.

man could you at least whisper the idea of buying a house her ear?

irishbear99

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Re: My class mate and the waste of money
« Reply #14 on: November 13, 2015, 10:34:48 AM »
$54k for a vehicle on a $60k salary is insane...definitely facepunch worthy. On the  bright side, at least she only financed it over a 3 year period rather than the 8 (!) years that is becoming standard for vehicle loans.

She is about to finish her Masters Degree in Finance. She rents. She bought an SUV and financed it over 3 years, to the tune of $1,500 a month payments.

She has all kinds of expensive tastes. But is absolutely clueless about money. Somehow she actually works in finance (as a loan officer...). She doesn't have money to blow, she only makes about 60K a year.

man could you at least whisper the idea of buying a house her ear?

Why are we assuming that buying is better than renting in the coworker's case?

Mr Money Mutton Chops

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Re: My class mate and the waste of money
« Reply #15 on: November 13, 2015, 10:38:45 AM »
She is about to finish her Masters Degree in Finance. She rents. She bought an SUV and financed it over 3 years, to the tune of $1,500 a month payments.

She has all kinds of expensive tastes. But is absolutely clueless about money. Somehow she actually works in finance (as a loan officer...). She doesn't have money to blow, she only makes about 60K a year.

man could you at least whisper the idea of buying a house her ear?

And then watch her go bankrupt? I think that's a bad idea. Remember, a big part of the economy relies on people like this actually paying back their loans.

vivophoenix

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Re: My class mate and the waste of money
« Reply #16 on: November 13, 2015, 12:18:12 PM »
$54k for a vehicle on a $60k salary is insane...definitely facepunch worthy. On the  bright side, at least she only financed it over a 3 year period rather than the 8 (!) years that is becoming standard for vehicle loans.

She is about to finish her Masters Degree in Finance. She rents. She bought an SUV and financed it over 3 years, to the tune of $1,500 a month payments.

She has all kinds of expensive tastes. But is absolutely clueless about money. Somehow she actually works in finance (as a loan officer...). She doesn't have money to blow, she only makes about 60K a year.

man could you at least whisper the idea of buying a house her ear?

Why are we assuming that buying is better than renting in the coworker's case?

because she could either buy herself a house or an investment property instead of an SUV which is losing value.

it is low hanging fruit and something many people can decide upon easily and will easily be a better decision than a car.

anything is better than her choice of SUV.

did you have anything helpful to chime in ?

irishbear99

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Re: My class mate and the waste of money
« Reply #17 on: November 13, 2015, 12:44:51 PM »
$54k for a vehicle on a $60k salary is insane...definitely facepunch worthy. On the  bright side, at least she only financed it over a 3 year period rather than the 8 (!) years that is becoming standard for vehicle loans.

She is about to finish her Masters Degree in Finance. She rents. She bought an SUV and financed it over 3 years, to the tune of $1,500 a month payments.

She has all kinds of expensive tastes. But is absolutely clueless about money. Somehow she actually works in finance (as a loan officer...). She doesn't have money to blow, she only makes about 60K a year.

man could you at least whisper the idea of buying a house her ear?

Why are we assuming that buying is better than renting in the coworker's case?

because she could either buy herself a house or an investment property instead of an SUV which is losing value.

it is low hanging fruit and something many people can decide upon easily and will easily be a better decision than a car.

anything is better than her choice of SUV.

did you have anything helpful to chime in ?

You're making an assumption above that houses always increase in value, when we know that's not true. Also, we know nothing about the coworker, to include whether she plans to stay in the area for a long enough period of time to make purchasing a house a smart financial decision.

The very first sentence in my response was agreeing that a $54k vehicle on a $60k/yr salary was insane. Whether she rents or owns a house has no impact on the insanity level of the car purchase decision.

BTW, there's no need to be rude. If you find nothing "helpful" (or your version of helpful) in my posts, feel free to just skip over them.

elaine amj

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Re: My class mate and the waste of money
« Reply #18 on: November 13, 2015, 01:23:07 PM »
A close friend owns a collections agency. He has racked up a fair bit of debt and is struggling to stay afloat despite making decent money. *sigh*

Working in finance doesn't always equal thinking about money the Mustachian way. My friend's excuse is that "I make good money/I deserve it/of course I can afford to treat myself".

Scandium

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Re: My class mate and the waste of money
« Reply #19 on: November 13, 2015, 01:56:38 PM »
She is about to finish her Masters Degree in Finance. She rents. She bought an SUV and financed it over 3 years, to the tune of $1,500 a month payments.

She has all kinds of expensive tastes. But is absolutely clueless about money. Somehow she actually works in finance (as a loan officer...). She doesn't have money to blow, she only makes about 60K a year.

not making her car payment okay.

but i would kill to have made $60k out of school. thats a huge step up in income from broke grad student. she was probably used to he being a broke student and now having 60k to play with is a huge jump in spending power. it sounds like she needs to be reminded that $60k doesnt last forever.

also if she is still in school, and took out any loans, she hasnt had to make payments yet. shes kinda living in a dream world at the moment.

This person was in finance? I thought they made more. $60k isn't that much. I got $68k starting salary 5+ years ago, and I'm an underpaid engineer! I didn't buy an SUV though

Bearded Man

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Re: My class mate and the waste of money
« Reply #20 on: November 13, 2015, 02:40:17 PM »
3 years at 1,500 / month is....54,000 in payments.  That is either one pricey SUV or she's getting bent over on the interest rate or some combination thereof.  WTF Batman?!?!?
54k is about right for a large SUV like a Yukon or Suburban.

It's a Tahoe.

Bearded Man

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Re: My class mate and the waste of money
« Reply #21 on: November 13, 2015, 02:46:34 PM »
Yeah, I was killing time and looking at new Ford pickups last weekend.
Nice four door F-150's run anywhere from high 40's to about $64,000, so that price isn't hard to imagine.

She won't be handling my finances.
My neighbors wife isn't a CPA but does bookwork and accounting for several small business.  They went bankrupt a couple years ago and owed over $275,000 on a home that sold for $60,000.   Same deal; new vehicles, expensive trips, entertainment, remodeling, campers, toys, etc. all on credit.
Scary thing is a few people still use her for their bookwork?

Why is it scary?

can she no longer read or add?

she isnt their financial/life guru, she is the person they pay to tally things

While I agree, it's basic data entry work, I have a friend who I'm slowly cutting out of my life (if you scratch with the Turkeys...), that does  bookkeeping work, and has for about 9 years. He doesn't really move up. He is middle aged, and has been pursuing a Masters degree so he can sit for the CPA exam. School is a for profit school with a poor reputation. This has been going on for almost a decade now...His dad is paying for it, his wedding, everything.

I'm not sure how he thinks he is going to run the financials of a major corporation when he can't stand on his own two feet with all the help in the world. I wouldn't let this person do even something as simple as make a deposit. Yeah, very nice...not too bright. I've seen over the years that it IS him, not his circumstances, that is the reason he is failing.


Bearded Man

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Re: My class mate and the waste of money
« Reply #22 on: November 13, 2015, 02:53:46 PM »
She is about to finish her Masters Degree in Finance. She rents. She bought an SUV and financed it over 3 years, to the tune of $1,500 a month payments.

She has all kinds of expensive tastes. But is absolutely clueless about money. Somehow she actually works in finance (as a loan officer...). She doesn't have money to blow, she only makes about 60K a year.

man could you at least whisper the idea of buying a house her ear?

I did. I suggested she own instead of rent, and made some remarks about her car. Ditzy 24 year old kid. Also getting married to a man with kids, when she hates kids. Just the other day while working on an assignment she mentioned she thinks her relationship is over, the kid is coming between them.

I remember all the people who told me to get married when I was younger, do this, that and the other. I've slowly been running into them over the years. One works at a phone kiosk at the mall. Another is in prison for life. The rest are largely divorced and broke, living check to check, with kids they can't afford without tax payer handouts.

I decided not to get married or have kids. Instead went to college, lived below my means, saved, invested, grew my career, etc. But I'm still not sure who is better off, them or me. Ignorant people seem to be oblivious to their own stupidity or the problems around them. I on the other hand, am usually one of the few who pays extra taxes to bail these morons out or feeds their kids, put a roof over their head.
« Last Edit: November 13, 2015, 03:37:05 PM by Bearded Man »

No Name Guy

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Re: My class mate and the waste of money
« Reply #23 on: November 13, 2015, 06:05:59 PM »
Tahoe huh.

 So tell me how this friend of your has to drive off road all the time, through 2 feet of snow, while towing a 5,000 lb trailer of tools and supplies with a 4 person crew.  Oh yeah.....doesn't.....ever. 

What a clown car choice for her.

TheGrimSqueaker

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Re: My class mate and the waste of money
« Reply #24 on: November 13, 2015, 06:15:37 PM »
A close friend owns a collections agency. He has racked up a fair bit of debt and is struggling to stay afloat despite making decent money. *sigh*

Working in finance doesn't always equal thinking about money the Mustachian way. My friend's excuse is that "I make good money/I deserve it/of course I can afford to treat myself".

Wouldn't it be ironic if one of his creditors hired his agency to collect from him?

I'm reminded of the situation in "The Mikado" where the executioner is ordered to execute himself.

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Re: My class mate and the waste of money
« Reply #25 on: November 13, 2015, 07:53:16 PM »
Tahoe huh.

 So tell me how this friend of your has to drive off road all the time, through 2 feet of snow, while towing a 5,000 lb trailer of tools and supplies with a 4 person crew.  Oh yeah.....doesn't.....ever. 

What a clown car choice for her.

Eh, everybody has their faults. I ride to work most days, but I still have my paid off 01 BMW 530i. It is a boat, gets 24 MPG on a good day, but I bought it for 4K a few years back. I see no reason to get rid of it.

JordanOfGilead

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Re: My class mate and the waste of money
« Reply #26 on: November 16, 2015, 06:38:57 AM »
3 years at 1,500 / month is....54,000 in payments.  That is either one pricey SUV or she's getting bent over on the interest rate or some combination thereof.  WTF Batman?!?!?
54k is about right for a large SUV like a Yukon or Suburban.

It's a Tahoe.
Only a small step down from the Suburban. Still a pretty big SUV and with the right trim packages and "extended warranties" 54k is entirely believable. The thought of fuel costs for that thing make me shudder though ...

mizzourah2006

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Re: My class mate and the waste of money
« Reply #27 on: November 17, 2015, 02:33:25 PM »
3 years at 1,500 / month is....54,000 in payments.  That is either one pricey SUV or she's getting bent over on the interest rate or some combination thereof.  WTF Batman?!?!?
54k is about right for a large SUV like a Yukon or Suburban.

Actually if you are looking at mid-size SUVs with a decent amount of features on them they can approach 50k too. The MSRP on the GMC Acadia Denali is in the mid 50s. Similarly the mid-size SUVs that come from Mercedes, BMX, Lexus, Acura, Volvo, etc. are also in the mid to high 50s. A person with very expensive taste likely has one of these "luxury" SUVs.
« Last Edit: November 17, 2015, 02:35:09 PM by mizzourah2006 »

Jack

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Re: My class mate and the waste of money
« Reply #28 on: November 17, 2015, 03:52:37 PM »
A close friend owns a collections agency. He has racked up a fair bit of debt and is struggling to stay afloat despite making decent money. *sigh*

Working in finance doesn't always equal thinking about money the Mustachian way. My friend's excuse is that "I make good money/I deserve it/of course I can afford to treat myself".

Wouldn't it be ironic if one of his creditors hired his agency to collect from him?

I'm reminded of the situation in "The Mikado" where the executioner is ordered to execute himself.

I think that might fall somewhere between "nice job perk" and "fraud." The guy could have his company buy the debt from the creditor, and then simply fail to collect!

TheGrimSqueaker

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Re: My class mate and the waste of money
« Reply #29 on: November 18, 2015, 07:45:16 AM »
A close friend owns a collections agency. He has racked up a fair bit of debt and is struggling to stay afloat despite making decent money. *sigh*

Working in finance doesn't always equal thinking about money the Mustachian way. My friend's excuse is that "I make good money/I deserve it/of course I can afford to treat myself".

Wouldn't it be ironic if one of his creditors hired his agency to collect from him?

I'm reminded of the situation in "The Mikado" where the executioner is ordered to execute himself.

I think that might fall somewhere between "nice job perk" and "fraud." The guy could have his company buy the debt from the creditor, and then simply fail to collect!

Assuredly there's a conflict of interest, but if it's a sole proprietorship and he declares the written-off debt as income for tax purposes, I don't see exactly what law would be broken. The lender would sell the debt and get at least some money back... lender's satisfied and probably blissfully unaware because it's a normal business practice and the normal market rate would have been paid. The IRS would get its due. He'd still take the hit to his credit rating.

What would the charges be?

steviesterno

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Re: My class mate and the waste of money
« Reply #30 on: November 18, 2015, 08:28:22 AM »
My buddy and I were talking about cars this week, and he's got some fancy ones for sure. Imported a new speced out M5 from Germany. He used student loans to buy some race cars in college, typically gets underwater and rolls the loan into the next. He buys new and sells in about a year. Pretty much the worst list of things you can do. He's got kids and lives in a rental, and I think zero retirement but I'm not sure. with 107k sitting in the garage, that works out to $1800 a month, even at zero interest. CRAZY! All so he can go kinda faster than most people on his way back and forth to work.