Honestly, home buying is not for everyone

The housing crisis occurred because we thought that we should make it that way. It costs more to own a home than to rent. given how much home prices have dropped in the last several years, I’d be better off if I had chosen to just rent. Even if I were to sell right now, I’d be in the hole by at least 100 thousand dollars.

But, remember that the average person out there is not spending money wisely or budgeting and that is why they cannot get ahead. I look at how my dad came from a poor family and managed to work his way through college and his doctoral degree without any help at all from the government or anyone else. The last few years, he was even supporting a wife and two kids. Then, when he was finally making a good salary, he put much of that money into savings and investing so that when he was laid off in his 60s, they were fine.

He did finance to buy the house, but he paid it off early. He never once financed to buy a car. Although he could have afforded it, he never once bought a car new. Usually, he never even bought a gently used car. Granted, he knew how to fix cars and so he’d just fix them when they broke down, but I vividly remember how excited my mom was when he purchase a car for 1000 dollars. He had never spent that much. In today’s dollars, it would probaby be more like 3 to 5 thousand, but my point is simply that people do well financially because of the choices that they make. The current American mindset does not fit with this old fashioned style of dealing with money.; If it did, all of us never would have been in the condition that we are in.

I’ll admit that I do not follow DR to the letter, but if I could do it again, I certainly would regarding buying a house. Except in cases of disability etc., there is always a way out. A person just needs to get creative and be super frugal. For example, there is absolutely nothing wrong with having multiple generations living together when possible. I am truly hoping that my kids choose to stay at home for college to save in the cost of living. If my parents needed it, we’d find a way to have them live here with us.

Also, there is always a choice for where to live. I am from the San Jose area so I know how expensive housing is there. I currently live in Maryland and it is pretty expensive here as well. We chose a neighborhood that is not high class, but more lower middle class. Our educational level is more upper middle class (two parents with doctoral degrees), but we will probably always stay here. If we chose to live elsewhere, we’d really be in trouble in terms of our house value. If we had chosen to wait a few years before buying, we could have had our 20 percent down payment and financed a 15 year mortgage. Paying cash for the house would have probably taken many more years, but DR does mention that it is okay to do the 15 year mortgage if needed.

DR certainly is a way of life and a different mindset. I know several people who say that they are “doing DR kind of” I am not sure what that means. I am not perfect with it either in the sense that I am paying off my credit cards in a slightly different order, but I am hoping to never have to take out another loan for anything.

But, if you want to finance a car, that is up to you. I just don’t think that you can expect this list to tell you that it is an okay thing to do. DR would say no.


The house part of Salivan I don’t quite follow. I understand not overbuying more than you can handle or need. For people without big income or businesses it would take a very long time to save the price of a house, especially if you are paying rent or high expenses for living somewhere while you are trying to save the full amount for the house. My granddaughters mom is employed full time, lives in a two bedroom upstairs apt. Rent takes half her paycheck, two teenage daughters, no car. There are lots of things I would like to see her change money-wise but truly can’t see her saving enough to pay full price for a home without a mortgage. Kids will be grown and gone before that would happen.


it is not possible to buy a home in the San Francisco Bay Area and pay cash as it is one of the most expensive regions to live in in the country. I could live somewhere less expensive but I would likely be very unhappy and with the work I’d do, I doubt I would even make a quarter of my income.

But money isn’t the problem..

It’s the manifestation of a spending addiction, or lack of knowledge in budgeting or any other number of root causes we all suffer from. The amount doesn’t matter, it’s about changing a mind set which is the key to debt freedom.

Mark has never given specific investment advice since that is not in his wheelhouse. He keeps it very generic. I don’t agree with him on his stance on ETFs. He think you will trade more with them vs mutual funds and I think he is just plain wrong. I think the reason high income people don’t call in, and there have been a few, is that they might not think they have problems or are too busy or might think lower income people don’t want to hear their problems. Who wants to hear about someone making $600K and being 1.2M in debt?

It’s not about the sale price, it’s about the insurance

Find out what you can insure that new car for, in case of theft. What happens if you borrow $25,000 to buy a new car and that car is stolen tomorrow, or totalled? What will your insurance pay? They will only pay the replacement value for a *used* 2013 car, so you might get $20,000 back and be sitting there with $5,000 remaining on the loan and no car. Here – GshLoans.com you can get payday loans and solve all problems.

(in the state that was once #1 in the country for auto theft ,but not any more)

Everyone I ask keeps using this argument of

new cars losing value so quickly but it really isn;t true. What I am thinking of doing is waiting until like January and getting a 2013 leftover. And if I can find it, and I will look until I do, even if I have to go to another city, is get one that only has automatic transmission and air conditioning because I really do not need anything else. When you compare the prices of a basic 2013 model with only those few features, compared to the same car that is 2-3 years old and LOADED with options, which most of them are, the price of that used car is WAY higher. I bought several new cars when I was younger and this was always the case, the brand new leftover model with the few features I needed and wanted was way cheaper than the used model with more options.

So I figure, why not start out with zero miles and a full warranty and get it for less.

I know a girl who within the last few days, got a brand new Nissan Versa with only automatic transmission, for $13,000. This car didn’t even have power locks and windows but she didn’t need all of that and neither do I. I guarantee you if she looked at used ones, they would have had tons of options and would have costed her more.

We’ve got a close friend who has no objections whatsoever to

financing anything (he’s not a LS fan and I’ve written about our, ahem, differences of opinion before). He just went through an interesting car-buying experience that you might find helpful. He commutes about an hour to work every day, and he wanted to replace his aging Toyota Corolla. It’s been very reliable but in his eye it was getting a tad old. Even though he has no philosophical objections to financing, he did NOT like the idea of buying a new car because of the issue with loss of value as soon as the car is driven off the showroom floor. So in that, we were/are in complete agreement. So he’s been shopping for some “gently used” vehicles, and was very close to buying a 2012 Ford Fusion. Yet he announced yesterday that he is the new owner of a brand new Hyundai Sonata. The reason? Their new price was actually better than most of the used car prices he’s been seeing.

So without getting into the topic of whether or not you should finance, just be aware that apparently Hyundai Sonatas are being marketed right now for relatively low prices. And apparently their mileage is at least as good as his trusty old Corolla. Not sure if that’s what you had in mind, but that was his shopping experience within the last 24 hrs.

I think these aren’t the only two options

I am against buying a new car even when people can afford it, because a new car drops a huge chunk of value the minute you drive it off the lot . FOr example, if you buy a $20,000 new 2013 car, you can only *insure* it as a *used* 2013 car. So if it’s stolen tomorrow, you are out of luck.

There are a lot of nearly-new cars coming off-lease, and now that dealers offer free maintenance, these cars can be better than new. You can buy a 2- or 3-year old Toyota or Honda and get all the reliability without the added sticker shock of brand-new, and you’ll even have some warranty left.

My current car is a 2005 Toyota Camry which I inherited from my father with very low miles. He bought it new, and it’s still having ZERO mechanical problems. I’ve replaced the tires and the battery and the windshield wipers. If it had been sold it would have been just as great at 3/4 the new cost.

My previous car was a 1991 Camry which I bought in 2004 for an above-book $8k, with 75k miles on it. I drove that car until 2009! In eight years I had to replace the power window motors and some parts of the suspension and exhaust. In 2009, a whole lot of stuff broke at once, just one week before I was due to pick up my dad’s car. Donated it and it sold at auction for $550.

Unless something drastic happens, my next car will be a used Toyota, no matter what I have in the bank.

Need a car

I live in a major city and currently do not have a car and don’t really need one. However, I am going to be moving out of the city into a more suburban area where I will be buying a house and definitely will need a car to commute to the city. Please don’t suggest that I buy in the city so I don’t have to spend money on a car because it is WAY too expensive to buy here. I have been mostly out of debt for 5 years except for a tiny student loan and a very low interest rate and have an emergency fund.

The last 3 used cars I had were TOTAL lemons and costed me HUNDREDS in repairs and things got so bad that I would have had to have spent even more if I kept any of them. So I feel really jaded about buying a used car and have had an extreme amount of bad luck.

What I really want is to have a super reliable car that will last a really long time. One of my friends has a Honda Accord that she has had since brand new and it is now 25 years old, she has had very little problems and it still runs great. This is what I am thinking I want, a brand new Honda Accord or a Honda Fit that is completely reliable, under warranty, that will last for 20-25 years.

Because I am saving to buy a house, I can’t also save to buy a new car and pay cash for it. Do you think that given my debt free situation, that it would be bad for me to buy a brand new car and finance it? I would have enough monthly income to pay extra and pay it off sooner. I know Dave is against buying new cars, but since I am planning to keep it for 20+ years, and am debt free, it seems like it would be okay. And like I said, I have had sooooo much bad luck with used cars, I just don’t want to go there again. Please let me know what you all think.