Tag Archives: Range Rover

Automobiles, Bankruptcy, Financial Independence, Retirement, Saving

Range Rovers And Foreclosures

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Range Rover, Car, Truck, Range, Rover

Here I am back again talking all things on four wheels. I’m talking about cars of course!

So I will say to you what they always like to say in Welcome Back Kotter’s theme song, “Welcome back!”

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Image result for welcome back gif

And less like Agent Smith in The Matrix saying Welcome back.

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However, we did miss you.

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After my last post on on the price of luxury cars, it is time to bring you the sequel! Just like The Matrix Reloaded. This posts sequel is all about cars so Buckle Up!!!

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See my post Beamers, Benz, and Bentleys Or A GMC Truck

Why another post about cars you ask? Because apparently folks out here are still lining up at the dealership every summer ready to take on these 5, 6, 7, now 8 year car loans!

You read that right. Lenders are now allowing borrowers to repay car loans for 8 friggin’ years!

That is enough time to do the following:

1. Graduate from college twice, including graduate school

2. Get married

3. Watch all 14 seasons of Supernatural on Netflix

4. Have the President of the United States finish two-terms

5. Write the next great American novel (hey it’s possible as it took J.R.R. Tolkien 12 years to pen The Lord of the Rings) 😉

I am here to remind folks that cars will not make you look, feel, or be rich.

Hey, don’t get mad a t me. I am just the messenger. Like Loreali Gilmore, I am A Messenger, Nothing More. Please just take the letter Dean or in this case, just read this post. 😁🙏

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MAKE PEACE NOT CAR PAYMENTS You must make peace with your finances. It is the only way to come to terms with reality and set your sights on the bigger picture. You must choose a path. Rich or Broke. Never poor because poor is eternal.

All things are temporary. However, life is not short, it is long. And like Chris Rock said, “life is long especially, if you make the wrong decisions.”

Image result for chris rock life is long

Therefore, I want you to make good financial decisions from the starting gate. Paying 8 year car payments is like going to war with your bank account. And you know here at Greenbacks Magnet, we are all about the love. So make peace not war. So I am here to tell you: BACK AWAY FROM THE CAR PAYMENTS SLOWLY, TURN AROUND, AND RUN AWAY!!! You need to stand on firm financial ground. Your financial footing has to be so good that not even the Big Bad Wolf could huff and puff and blow your finances over!

When you constantly have to worry about how to make the mortgage payments or paying for the Range, then you have a serious problem. No car is worth going into foreclosure over. Should the home get foreclosed are you prepared to live in that Range Rover? A car that luxurious should be parked in a driveway and not on a freeway off ramp. Paying a $700 car note is outrageous. Then again, so is paying a $6,000 mortgage. Both of these high fixed expenses could leave you in the poor house.

Tons of bankruptcy filings include not only credit card debt, but high mortgage payments and out-of-control luxury car notes! People, people please don’t forget what Ferris Bueller said about priorities!

A man with priorities so far out of whack doesn't deserve such a fine automobile.

RANGE ROVERS ARE OVER RED ROVER Why discuss and name my post about Range Rovers? Let me tell you a story and paint this picture for you. In the illustrious words of Sophia from Golden Girls, “picture this.” đŸ€Ł

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I have heard several separate stories about Range Rovers and the cost of ownership.

In one story, the owner had the car in the shop for an entire year because he could not pay the repair bill. That’s right. A car that you are still paying the payment for, including auto insurance is sitting in a repair shop.

Now how are you gonna be a number one stunna, if you can’t ride around in your car to impress all the people out there, while only having $100 in the bank? It’s like Birdaman said, “Ride Bentley’s ’round the city on buttons.” “I’m the # 1 stunna!”

Oh and why only $100 in the bank? because it took almost every dollar in your paycheck just to keep the car on the road. And speaking of keeping the car on the road…let’s talk about maintenance and repairs on a Range Rover.

If you didn’t already know, then let me be the first to tell you. Luxury cars are more expensive to repair. Why you ask? It’s simple. Luxury comes at a premium. You have to pay the cost to be the boss.

See my post Lipstick Confessions: Confessions Of A Teenage Waitress

Repairs will also cost you more for luxury models. The parts are more expensive and not easy to find and replace like American made cars, as repairs and upkeep are cheaper on these models. Why even buy a Range? That is because nobody wants to wear platinum Rolexes and canary diamonds while pushing a Honda!

However, if you drive that Honda for a decade and invest that $40,000 you spent on the Range, then you could have a million more in retirement in 35 years. That Range will be long gone by then. But you know what? If you have money to burn, then play on player or should I say drive on driver!

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In another story, I heard that a mechanic left a stable transit authority job with excellent benefits to go repair cars for the Range Rover dealership. When asked why he did it, he replied, “because I can make more money fixing Range Rovers because those cars are always in the shop.” What the F*ck!!! You spend enough to put a kid through college to get that car only to have it in the shop! Unbelievable. You would think with all the dough you had to drop to get that ride it would at least hold up better than a Rav-4 or Honda CRV.

SITTING PRETTY WITH MONEY IN THE BANK OR WITH YOUR CAR ON BRICKS I will end this post with some news I have heard from around the water-cooler and then some.

One lady told me that she didn’t know what her husband was going to do because his BMW was in the shop and he couldn’t afford the $8,000 to get it out! Holy crap! So you want luxury but you cannot actually afford luxury. Then it’s simple: Sell the car. Take the $15,000 check that Carmax will cut you for the trade-in, get you a Ford or Toyota for $6,000 and put the rest of that money to work in the stock market. That is how I turned my $450 car payment into over $100,000!

It is far more important to have money in the bank than a Range in the driveway or the repair shop. Put your money where your values are. Far more people are impressed by those than can afford to buy Range Rovers, but actually don’t. The most important thing you can do with your money after you earn it is to actually have and keep some of it in the bank.

Budgeting, Celebrities and Money, Real Estate, Saving, Wealth

Less Home, More Wealth

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You’ve got to work to succeed. – Owner of a Lonely Heart Song and Lyrics by Yes

If you crisscross the country, you will see home prices are highly inflated. Homes values have gone up, but so too have prices.

I look to my left and to my right, but I don’t really see any new starter homes being built.

How is a family just starting out supposed to find affordable housing without any affordable homes?

You need to keep your fixed expenses low, so that you can keep more of your money in your pocket.

Remember the future is more expensive. Things do not go down in price. Prices go up.

I urge you to reconsider purchasing anything that will mean paying a high fixed amount over a long period of time such as a mortgage.

High fixed expenses can cause folks to go bankrupt.

If you do an online search, you can lookup bankrupt celebrities and see my point.

When going through their financial records and bank statements you see the glaring red flags right off the bat.

Here is a typical list of items I see when high profile people file for bankruptcy:

  • The newest or latest Range Rover
  • Large wardrobes and expensive designer suits or furniture
  • Huge credit card bills
  • Expensive foreign car leases
  • Tax liens
  • Medical debt
  • Back mortgage payments
  • Multiple child support or alimony payments
  • Back taxes owed to Uncle Sam

There is one-line item I would like to pull out in particular and that is the mortgage payment.

Let’s say hypothetically speaking, one was to bring in $70,000 a year, but was once pulling in $520,000. That’s a pretty huge drop in income right there. Would signify some belt tightening needs to be done right?

Nope.

Instead folks were continuing to live in the same neighborhood and even in the same house. In addition, driving fancy cars, and pretty much were living as if there had been no drop in income.

That is no way to do your finances.

You have to respect money. You cannot spend before you earn. As the song goes in the lyrics stated above, you’ve got to work to succeed.

You can’t continue to have the trappings of success, if you truly can’t afford them.

So, let’s discuss buying less home in order to be wealthier.

HOME PRICES ARE THROUGH THE ROOF

According to Zillow.com, the median home price in Washington DC is $575, 800.

If you have a 5% interest rate and a 30-year mortgage, that means you will owe $3,091 a month. And that’s just for the bricks! You have not paid property taxes, closing costs, home warranty, or utilities.

Adding in homeowner’s insurance and property tax, you are looking at $3,419 a month.

The Mortgage affordability rule states you should spend no more than 36 percent of your gross income on all your total debt, and this includes mortgages.

Based on the numbers, to purchase a home at this price point, you would need to bring in over $12k a month. That’s $150k a year. And this amount includes no down payment no debt except a mortgage.

Who doesn’t have a car payment these days? However, make anything less than that and its sorry game over.

Let’s not forget that this is for a property in Washington DC. There are tons of other metropolitan areas where to pay to play is even more egregious.

What a home in swanky parts of New York, California, Connecticut, Florida, Colorado, or Texas? Well, it’ll cost you.

Homes in gated communities can be well into the seven figure range.

If we take three times $575,800, that gives us $1,727,400. A $1.7M home will cost you approximately $10k per month, which is $120k a year and $10k of that goes just to property taxes.

In a decade you would have paid $120k for property taxes, just for you to sit on your couch in your living room .

That means a $3.5M home would cost the homeowner $250k over 10 years.

That’s right. A quarter of a mil. Just because the house is standing.

PROPERTY TAXES ARE FOREVER

Oh and by the way, did I mention that property taxes are forever?

You don’t ever stop paying it.

That means you will always have some cost associated with owning a home, even if everything inside of it and the dwelling itself is paid for.

Wishing you could buy a manse like Hova and Beyoncé. Well, be prepared to shell out big bucks cause the property bill alone is massive.

It was reported they bought an $88M mansion in California. A pricey piece of property indeed. A ritzy neighborhood for sure and a jaw-dropping beauty of a home.

In sunny California, the property tax rate is composed of three types of levies: general tax levy, voter approved bond indebtedness repayment, and special district assessments. The general tax levy was frozen by Proposition 13 at 1 percent of assessed property value.

According to Joel Fox of The Sacramento Bee, “Taxes haven’t exactly disappeared under Proposition 13. Property tax revenue is up 1,000% since 1978 and is growing faster than personal income. However, individual taxpayers are protected by Prop. 13, locking in property taxes when they buy their home and limiting future increases.

So, let’s get down to the bottom-line. Property taxes on an $88 million-dollar home at 1% is $880,000 dollars! That is for one year. I shudder to think about the cost of upkeep.

Although, this is obviously not what the average American homeowner is paying in property taxes, it does illustrate that paying these taxes can be mighty expensive. Especially, if you are living on a fixed income, which many Americans one day likely will be.

HOW MUCH CAN YOU SAVE

What can you do instead of buying a huge property?

Glad you asked.

You can buy less home and save money.

This will effectively allow you to increase the amount of money you save.

For example, just buying a property that is $100,000 cheaper could allow you to save $584 a month in mortgage payments and property taxes.

Investing that $584 over 30 years at an 8% rate of return could net you $877,423.

You would be giving up close to $900k in wealth to live in a neighborhood that ends in the name of Hills instead of Heights.

Basically, you could save a small fortune.

HOW MUCH GREENBACKS MAGNET SAVES

I decided to buy a smaller home than most friends and family members I know.

In one case, I paid $500k less than my peers or their families. In another, I paid less than $700k!

Just figured less home would mean less to do for maintenance, lower utilities, and more freedom because less time is needed to manage my household.

I was right.

It is way less stress to care for a smaller versus a larger home.

You have less stuff because you have less space.

Either you throw out and donate crap or get creative in storing it. I prefer to come up with less storage solutions and just stop buying stuff.

It has paid off handsomely.

I gave my savings amount in a post I did called How Millennial Money inspired me to save $13,333.06 a year. Well, now I’m giving you the visuals. I highlighted in red what I’m saving now.

GBM savings growth chart 

After, I started ramping up my savings it just took off. I am on track to save 1,000% more income than I did in 2015. Not too shabby.

I say buy less home, build more wealth.