Dear Quentin, I have been switching between buying a new car or down payment on my first home. With my parents very interested in money and carefully watching my finances (still), I am stuck in a difficult situation. The original plan was to save 20% to 30% for a down payment on a condo in suburban Los Angeles and buy on the market within two years or so, and now I’m close to 40% toward that goal .
“With the Green Law possibly on the horizon again, the Model 3 has been a temptation, especially with all the additional incentives my state offers. ”
I am 28 years old with zero debt in January 2021. As for retirement, I’m on my way to maxing out 401 (k) contributions this year, and I’ve already maxed out my Roth IRA contributions, and if everything stays the same, I’ll have around $ 60,000 retirement by the end of the year. In terms of liquid assets and investments, I have about $ 45,000 right now. I currently save and / or invest 50% to 60% of my take-home pay as I moved home with my parents after I was laid off last year and started a new job remotely. I don’t know if I should (a) buy the car outright and empty my savings as I will probably have time to save the money again before a possible home collapse, (b) not buy the car and keep saving for the down payment, (c) do both or (d) invest the money elsewhere. As financial conservatives, my parents are strongly against me buying the car because it is a depreciating asset, and they believe that entering the market should be my priority, so they believe that I should have the down payment waiting to hit the market every time you see a good deal. I think I can buy the car and buckle up and save more aggressively to replenish funds. Any advice for me? Pressured by Parents You can email The Moneyist with any financial and ethical questions related to coronavirus at firstname.lastname@example.org Dear Pressed, What the heck! Get carried away by your momentum, splash around with the Tesla TSLA, -8.55% Model 3. You’ll feel empowered knowing you’re using your purchasing power to get America back on its feet, while making a cool statement that it’s finally here. Fully embrace the American dream of being a hit-hit-hit amid the spirit of the age eco-warrior, Tesla driver, and tech-savvy. All we have is today, after all, and global warming will come for all of us in the end. Browse the neighborhoods where you would like to buy a home in your 30s, 40s or 50s (it will all depend on how the housing market fares between now and then). Take a good look at those houses, assuming they aren’t obscured by manicured hedges, and enjoy the view. Drive back to your parents’ house, honk so they can marvel at Elon Musk’s bold vision for themselves, and then, and only then, politely ask them if they would leave room in the driveway for your Model 3. You have done everything right so far. I bought the house first, then the $ 27,000 electric car. You already have a destination in mind. Don’t let a car, no matter how cool you think it would be to drive, deter you from that fate. Listen to your parents. They saw more than you. They are trying to steer you toward financial freedom. And as nice as they are to drive and be seen driving, you don’t need a Tesla to do it. The Moneyist: “Warren Buffett and Harry Potter couldn’t get those two to retire sooner”: Our wasteful neighbors said our advisor was “lousy.” So how come WE pull out early? Hello MarketWatchers. Take a look at Moneyist’s private FB Facebook group, -0.47%, where we search for answers to life’s thorniest money problems. Readers write to me with all kinds of dilemmas. Post your questions, tell me what you want to know more about, or rate the latest Moneyist columns.