Mid 20s Guy - How Should I Pay for My Investment Vehicle (Loan Vs Savings)

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    Save Medicare on 09/04/2018 - 21:44

    +1

    Motorcycles are cool but it'd be really embarrassing to end up ventilated in my ICU on my way to work, especially if all of my colleagues found out that I'm not actually an organ donor.

    What car do you drive and what PGY? What did you drive as an intern?

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      Tally-Anne OConnor on 09/04/2018 - 21:49

      Lets just say it has been long enough. If the majority of consultants drive practical econoboxes, it isn't really a bad idea to follow suit, unless you would want to drive a nicer car than your boss.

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  Zonty on 09/04/2018 - 22:05

  start work at uber or uber eat lol. Is it worth to work ass off for your expensive car?

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  CocaKoala on 09/04/2018 - 22:55

  Do let me know what an "investment vehicle" means, and how does an mx5 qualify as one. As to your original query, just buy a cheap, used, and reliable car that will get you from A to B.

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  Oneforall on 10/04/2018 - 00:22

  With that kind of money I'd invest it in a unit in the Parramatta region.

  If you were to be an owner occupier you would save on stamp duty + 1st home buyer's grant $10,000 (if you buy brand new) + save on LMI duty. You also will not be paying rent and all your repayments will have a contribution to your principal (or if Interest only loan it will be eventually).

  If you don't forsee yourself getting a whole heap of savings for a while then LMI is the way to go.

  As long as you predict the capital growth to be greater than the cost of LMI. Another point to consider is you are building your wealth. If you opt for a P+I loan, you are building equity rather than paying rent to a landlord.

  Wait it out for another 4-5 yrs and then consider that purchase if you like.

  I would look at an upgrade to a newer second hand vehicle. A camry 2005 is around 3-4K (I have one).

  I'm considering to upgrade to a Jeep Patriot 2013 model next year which you can get for $10K (didnt want to spend a lot on a car atm - 2012 model is currently attainable for $10K). However, parts and servicing (could be double a camry) are more expensive (some parts are double).

  Invest now for the future. Once you are married and having a family. Taking that step will get you one step closer to financial freedom.

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  jerjergege on 10/04/2018 - 07:48

  Literally near to none investment vehicles, unless you're talking about display only vintage cars, and even then if you're asking here, you won't have the money for them.

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  CabbageKok on 10/04/2018 - 08:04

  an "investment vehicle" are normally cars that are cheap initially, require restoration and then storage costs.
  buy a corolla, save your money and move on.

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  godofpizza on 10/04/2018 - 09:21

  when I turn 25 so insurance won't be so expensive.

  have you actually tried to get a quote to prove this? there's alot of factor that will determine the final cost of your insurance. Age is just one of them. how much difference is the insurance on a 20 year old camry for a 20 yo vs a MX-5.

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    Save Medicare on 10/04/2018 - 18:04

    This is only through online quotes but it looks like premiums for comprehensive suddenly drop $500-$1000 if i move the date of birth to 24 or 25 with all other things equal

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  h0mbre on 10/04/2018 - 09:29

  Buy a second hand VW Golf GTI/R32/R.
  Make sure its out of warranty because those examples are much cheaper.
  Very reliable car and good resale value and it will help you build your mid 20's, grad job, high flying baller image.

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    martz201 on 11/04/2018 - 12:57

    Ahh the medical intern Golf, I have observed this anecdotally, a handful of interns in my year bought Golf's, solid choice as like you said reliable and also comes in at an intern price point. Also comes with that 'euro' badge. My partner as an intern is actually driving an older model Golf.

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  holdfestron on 10/04/2018 - 09:42

  I think we might need to find out how much you will need to spend per month to live comfortably, assuming that you are definitely getting the car.
  If $900 per month is not sufficient, will $1200 be more realistic as monthly living budget? that will mean that your investment in ETF or whichever asset class has to generate 30% of return in 9 months. Although it is possible, I think that might be quite difficult to achieve without taking significant risk.

  yes, i believe you could try getting a loan with low interest rate through family. Assuming that you only need the extra $300 per month to live, just borrow $300*9=$2700 from your family and pay it back by end of next year.

  having said all that, I think the most sensible thing to do is to only purchase if you feel you are financially comfortable with it. You could also try doing Uber or other odd job to generate some income to help you pay off the purchase ahead of schedule.

  ps. I haven't read all the previous comments so there might be some duplication in advise there.

  all the best mate.

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  Deridas on 10/04/2018 - 10:33

  From your posts, my guess is you're currently working as an intern at Nepean Hospital, probably driving a significant amount to get there everyday. If my wild guess is correct, your might be justified about getting a car that's currently beyond your means. Your income will go up a reasonable amount eventually, and you'll be driving enough every workday to enjoy it.

  Think about novated lease through salary packaging.

  Addit: I just realised everything I've said has already been said by others earlier

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  placard on 10/04/2018 - 10:58

  +2

  A car is never an investment. I don't agree with this Asian culture of appearances by your possessions. Most down-to-earth Aussies couldn't give a rats what car you drive and much more prefer your personality and character. Wealth is not something to appreciate someone by - I'd much rather have friends who were poor or middle class but are much more wholesome genuine people, than wannabe rich people that are arrogant, show off and shallow. Each to their own.

  There's nothing wrong with a 98 Camry if it still runs. A car is always a liability, it will always go down in value. Fair enough upgrade if you want safety, but at the end of the day, all the safety features can only do so much - you need to drive to avoid situations in the first place so these safety items are not needed. The amount of complacency I see these days from people relaxing thinking the safety features will get them out of trouble is frightening - ie raining day and people still flying along at 100km/h.

  I'm only slightly older than the OP but a fair while ago came to terms that I didn't care what people thought of me - if they judged me based on the car I drove, then they are not the type of person I will value the opinion of. So don't be pressured into buying flashy toys to impress others - it's a never ending spiral. You'll always be feeling outdone by peers and have to constantly get more and more in debt to 'look good'. Next will be the flashy house and on and on it goes.

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  TimApple on 10/04/2018 - 12:26

  Why do people really like nice cars? I take trains 5 out of 7 days. I just need to run very small errands occasionally and literally any cars can do that job. When I was your age I bought a beat up $6,000 car and used it until it broke.

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    Save Medicare on 10/04/2018 - 19:33

    +1

    Trains are a good option if you work in the city where parking is more expensive, but less so for those who work in the suburbs, especially if there are multiple transfers between trains and buses to take. Ultimately you need to factor in your travel time when you consider how much you are getting paid. If you make $30/hr and work for 8 hours but need to spend an hour each way for public transport, you're really only making $24/hr.

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      idonotknowwhy on 22/04/2018 - 08:13

      Yep. I did a similar calculation on my 90 minute each way commute and decided to move into a small flat right next to work during my first job. Best decision ever.
      And the free time saved let me cook, study, do bitcoin mining, etc, so these the opportunity cost to consider.

      P.s. I love the investment vehicle references throughout the OP

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    OzzyOzbourne on 11/04/2018 - 20:44

    How does your train usage and errands determine what car someone else should buy?

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  Avacardooo Rayy Mee on 10/04/2018 - 13:45

  There are a few rules i live by.
  1. Do you need it? or do you want it? because if you want it, you don't need it.
  2. Work smarter not harder.

  Look into something your good at, and try and turn that into a small business.

  I think you need to re-evaluate what you spend daily, personally i have a excel spreadsheet which tells me how much money i have spare every week/month i can spend without going backwards.

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  Masterpupil on 10/04/2018 - 15:30

  It would not be a good financial decision, but as a person who owned a 2009 MX-5 in the past, I can say that it was one of the best times I ever had.

  I had to sell it when I had a child and 4 years later, I think about that car at least once per week, and at times several times a week.

  I can confirm that the car was quite reliable and cheap to run and service, as it did not have outrageous tyres and used very little fuel even when driven like stolen. It was cheap to insure (in regional victoria at least) it was something like $600-700 full-comp. They are generally well-kept too, so a second hand one is not a risky (most owned by older men/women).

  It was also a very good social tool, as there are a number of local clubs, who broadly are inhabited by friendly, well-educated types who enjoy twisty roads.

  Having said all of that, it would be better to hold on to the money and invest in something sensible, unless you really need to upgrade your car, or you are flush.

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    Save Medicare on 11/04/2018 - 06:29

    I'm sorry to hear that you still miss your miata. Was it an impossible financial situation at the time to have kept it and bought a practical car as well? How practical is it for only one of you and your wife to have a practical car?

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      Masterpupil on 14/04/2018 - 00:18

      Couldn't justify holding on to it. We also bought a bigger house around the same time.
      It never have gotten to drive it. Two kinds under 5 and you have very little time and you can't even put kids under 8 in the front passenger seat because of airbags.
      Apart from all of that, it's not really a good look for a person with young kids to have such an obviously selfish vehicle.

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  mavis30551 on 10/04/2018 - 16:51

  terrible advice but just get it on a 5 year loan.

  Should be about $300-ish per fortnight.
  A car should last you atleast 5 years anyway.

  Quick warning though, new cars lose there appeal quickly. you are kind of over years before its payed off.

  Edit: ignore my previous advice and spend 10K on a European Holiday. Dem European babes probably wont even notice your terrible personality and plain looks if you have a cute accent.

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  zzzsianzzz on 10/04/2018 - 21:07

  if you drive a lot or long distance, safety is more important than driving a old scrap metal that barely protects you and dropping pieces on the road that endangers others. i think buy one and dont sell it until it gets write off or fully serve its purpose. new or old is personal preference.

  your salary will increase after your internship, much faster than other public service jobs. it is a short worry unless you stuffed your intern badly.

  moonlighting needs to be declared though, fyi, it gets tricky if they find out and when your job performance is affected. i think it should be declared in all jobs including private companies. only public service requires that.

  there shouldnt be much monkey business under the table that hurts your organization directly or indirectly from your 2nd gig because they provide your primary income.

  good luck.

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  dufflover on 10/04/2018 - 22:52

  lol some people have too much time on their hands to go trolling OzBargain forums and be so persistent with it too for the time being :P

  Go waste your time looking up jacked up eBay prices instead of wasting forum space lol

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  Jaystea on 10/04/2018 - 23:45

  +1

  It is intriguing how everyone is commenting on the actual logistics of money earned/shifts picked up/overtime and the years studied etc. and how it's basically impossible or not feasible "not a white collar job" as rgr said. Or start being suspicious about OP's situation and how he isn't telling the whole truth.

  This sh!t isn't made it, it's medicine. Study for 6+ years (most universities moving over to the post graduate degree model), come out as a 24, 25 year old. Work overtime, continue to study, get paid peanuts. Rinse and repeat until you're about 30. Then maybe if you managed to study hard enough and did enough extracurricularly for the specialty of your choice, do you get paid a decent wage, but then there's the debt you accrued, and the ongoing costs of applying and sitting for exams, doing post graduate diplomas (as it's essential to some training programs), and other necessities. Before you know it, you're 35-40, finally in your specialty and earning a respectable wage, but you're on the bottom of the "consultant ladder". Idk about most of you, but this is the reality of this profession.

  tl;dr: Doctors earn peanuts until they get to about 30-35 due to many factors.

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  sheepdog on 11/04/2018 - 12:49

  +1

  A lot of people on here are going the poor man route and beating on the fact that you want to buy a cool car whilst you can't afford it. I don't think you're wrong to want to upgrade your car and I'm not going to lie, 20 year old cars on the road do give off a pretty bad impression. I know that sounds bad but its not uncommon to think to be extra weary of someone driving a shitbox on the road because they'll be less concerned with damaging their own vehicle, thus are less prone to drive and PARK carefully.

  The way I figure it, work out how much you can happily save in a year and thats your budget for a car - assuming you don't have other priorities like saving for a house. In my opinion, aim for the 5 year old/20 grand bracket. Also keep in mind that if you're not single, a fun car probably has more cons than benefits. You're not going to seem cooler to the girlfriend you already have and if you're making a home together, its a pain in the ass doing simple things like picking things up from bunnings, or going away on trips/to the airport due to the shitty boot space.

  Given the reasons above, consider getting a truck-style ute. Clean ones look fantastic, don't look cheap and you'll be less likely to be the victim of road rage or aggressive driving. Though will be crappier to park.

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  Schezwon on 11/04/2018 - 15:16

  I'd rather but a Toyota 86 second hand. Looks much better and just as much fun. Or maybe with in your budget range a Hyundai Veloster.

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  Tnetennba on 11/04/2018 - 18:28

  Man, people on here eat this shit up. You can use any old basic troll / bait from literally a 15-20 years ago on ye olde internet and probably still get a reaction out of OzBargain.

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