Okay, so there is one really poor person buying a model S.

[v12 to 12v]

The insurance costs I'm getting quoted is between 125-215 a month for full coverage depending on deductible. I pay. 07 a kwh in Seattle. Service is 50 a month if I don't prepay. I can definitely afford it. Hell, I could make that selling joy rides and plasma and live in the car if things got really rough.

I have always thought that only rich people could live in Seattle...including those that live in their cars when considering the parking rates and parking enforcement.
At least the heater works on the Tesla when the engine is off.

Maybe instead of poor, a better definition is that you just recently turned cash flow positive? College educated, a tech job, a wife in college, medical insurance and no heavy debt burden makes you sound pretty freakin' rich! :wink:

 

[digitaltim]

Yes they are, but the bigger issue is having the ability to rollover some $$ from a 401-k while still working for the same employer - it is very plan specific on whether they allow that or not. At our work place, you can't rollover any 401-k $$ (Roth or not) until after you turn 50 or after you end your employment.

Spot on - it is definitely a plan-by-plan feature...my prior employer allowed you to pull 50% of "mature" funds which was a rather interesting formula. I never did that because income limitations have been a barrier for us since Roth's came into existence.

 

[josh_b]

Although my mind tells me this isn't a smart move by the OP, my gut tells me to tell him to go for it. If you have to make sacrafices for the next 6 year, and if you don't end up homeless, go for it.

Find a way to make an extra $500-700 a month. There are tons of ways to do so. Get a side job, solicit your skills on a site like onforce.com, become a little entrepreneur.

15 years ago, when we were renting a condo after getting married. I started buying, upgrading and selling laptops on ebay, and was making some pretty good money on the side. After 2 years, we had a pretty healthy down payment (in terms of CA real estate) for our first house. Sure, I was spending 20-30 hours a week on top of my 45-50 hour a week job, but I was working towards something that was very important to my wife and I, and I could do it at my own pace during evenings and weekend, from home.

You only live once...

Agreed. I worked as a super at my building and earned enough on the side to make a 25% down payment on my first home. (The worst time of my life was the day the sewer backed up in the building and I had to clean a huge mess in the laundry room, if you know what I mean. A shovel, a mop and several bottles of bleach were the order of the day...) Thankfully we're now on our way to fully owning this house and we're further along than most of our friends. (Who incidentally are 5 yrs older than us and had their parents pay a good portion of their mortgage!) Good on everyone who has worked their a5535 off to get ahead. I say buy the car as long as you can comfortably afford to pay whatever you are borrowing to pay the difference.

 

[dsmith2189]

That's why I don't think of it as a financial decision, and just think of it as the last dumb decisions I make before I have to buck up and be an adult.

Don't sell yourself short. I'm sure you'll make plenty of other dumb decisions. :wink:

- - - Updated - - -

I couldn't do that, my company matches 100%. Not going to throw away free money! Would defeat the purpose.

switch to a ROTH 401K that way your company will still be matching and you will have more tax liability.

 

[kinddog]

Hey I mostly lurk these forums for information, but now I need some help!

I am about to reserve my Model S (want to take delivery around/after next Christmas). I am a 24 year old just recently graduated student that makes about 33,000 a year. I'm going to pay 90-100% cash for my Model S. However, I am one of the few people that isn't going to have 7500 dollars in tax liability no matter what.

Beyond maxing out my deductions and selling all my Tesla stock I bought at the IPO (at hopefully a profit) and that being taxed, is there anything else I can do that will benefit me and raise my tax liability?

Believe it or not, if you Google "how to raise your tax liability" there's not a lot of articles I am married, but my wife is an engineering student that won't really be making money (she is on full ride scholarship+financial aid).

Any ideas for me to research?

P.s. I saved the money by riding my stupid bicycle up the hills of Seattle my entire college life, and not blowing it on booze. Cheap to the extreme. I don't want to buy a stupid house, because I prefer living in a small apartment and not hog natural resources (and a house doesn't go 0-60 in 4.4 seconds.

You will financially cripple yourself (and your wife) if you follow thru with buying this car. The effects of which you will never be able to recover.

Be smart. Buy a Civic.

The flip side is that investing that $80k at your age will give you incredible options in 30 years.

Dont throw your life away over a car.

 

[bonnie]

I still say GO FOR IT! Reminder to the rest of you ... the OP saved up the money by watching every penny, riding his bike, etc. He's clearly not irresponsible. Most people would not have managed to save up that money at his age. You only get to spend it once. He is choosing to spend it on a Model S (Woot!!) instead of all the other stuff college students and young adults spend money on. He clearly has learned the whole 'long term gratification' lesson.

Why else do we work and save if not to live our lives the way we want to live?

 

[Vger]

I think it is incredibly presumptuous for many here to predict total doom for this enterprising young man, while they sit cozily in their Model S or await its immanent arrival. This thread is an amazing document to the generational changes occurring in the world, and how differently the "Millennial" generation thinks compared to us Baby Boomers. When I was this guys age, I blew my whole savings on a one karat diamond engagement ring for my wife to be. Twenty-plus years later we are happy, retired early, and very comfortable. Do I resent this person for following his dreams and getting his Model S a quarter century earlier in life than me? NO!

Prudent advice is one thing, and a very good thing. But insulting judgement is quite another. "Let he who is without sin cast the first stone."

 

[Alexander]

Until you i thought i was the poor man on the totum pole! If i can make it work, i know you'll make it work. Im 28 and in a slightly beter situation then you, but i think you can make it happen. I met a Ferrari owenr two years ago that made 60k year. His story sort of inspired me and keeps me going. He said "anyone can afford one of these cars, you dont have to be a millionaire, you just have to save."

 

[setritt]

it's all about what you want to spend your money on. i know people worth 40 million that drive a 45k car and ones that are worth less than a hundred grand that drive a 911 S.

 

[v12 to 12v]

Until you i thought i was the poor man on the totum pole! If i can make it work, i know you'll make it work. Im 28 and in a slightly beter situation then you, but i think you can make it happen. I met a Ferrari owenr two years ago that made 60k year. His story sort of inspired me and keeps me going. He said "anyone can afford one of these cars, you dont have to be a millionaire, you just have to save."

Isn't that the truth. Some people I used to work with when I was starting out would come to work and then go out for a latte and muffin at break, go to nice restaurants for lunch and later talk about the ball game they went to last night over beers and cigarettes after work. Then in the next breath they would wonder out loud how I could afford such a nice car.

There are times when we are at the marina on our boat and and look up at the fine restaurant on shore that has a sweeping view of the city at the head of the dock and we wonder how many of the patrons there are wishing that they could afford a a boat. In the meantime, after a long boating trip, we occasionally have a fleeting wish that we could go have some expensive cocktails and a fine dinner at the restaurant. Instead, we hose down the boat and then settle for what is in our stocked bar and some crab we caught & clams we dug ourselves or grill some burgers in the cockpit.

It is all about having a vision, long range plans, back up plans and prioritization.

 

[pilotSteve]

Isn't that the truth. Some people I used to work with when I was starting out would come to work and then go out for a latte and muffin at break, go to nice restaurants for lunch and later talk about the ball game they went to last night over beers and cigarettes after work. Then in the next breath they would wonder out loud how I could afford such a nice car.

There are times when we are at the marina on our boat and and look up at the fine restaurant on shore that has a sweeping view of the city at the head of the dock and we wonder how many of the patrons there are wishing that they could afford a a boat. In the meantime, after a long boating trip, we occasionally have a fleeting wish that we could go have some expensive cocktails and a fine dinner at the restaurant. Instead, we hose down the boat and then settle for what is in our stocked bar and some crab we caught & clams we dug ourselves or grill some burgers in the cockpit.

It is all about having a vision, long range plans, back up plans and prioritization.

+++ V12 to 12V and Alexander! You guys have it right.... its all about what you think, dream and the choices you make. Thats how I fly a jet for a living and drive a Tesla (well, will be driving in mere days) !

 

[Majerus]

I think it is awesome yourself and many young individuals are striving to purchase a vehicle from tesla. However I think it should be repeated that a car is not an asset even if the car is unbelievable. You mentioned wanting to go to medical school, with that said I feel it would be intellegent to keep as much of your financial freedom during that time as possible. It sounds like you have your head on strait so I am sure what ever you decide it will work out fine.

 

[jchangyy]

At the risk of repeating what many others have already posted, I would like to contribute my perspective. This is not a judgement--since we've all made mistakes--but more of an advice from someone who's lived a bit longer with bit more life experience. In the end, only you can choose to do what you want to do, but it's nice to advice/shared experience of others to help you make decisions. and here's my story:

I grew up poor, but my parents were able to put me through college--with some scholarships. Then, I worked for 4 years before going to Medical School. I had to take out a loan ($200,000) to attend 4 years and worked another 6 years following for residency and fellowship. I did make some money during the last 6 years as a resident and fellow, but not that much. ($30,000 on average). I married 5 years ago and now have a little girl. Just bought a house in Northern California 2 years ago. Now, I just put down my deposit for a Model S.

I do applaud you for having saved that much money at your age. I wish I had. Having said that, if I were in your shoes and knowing what I know now, I would invest (safely) that money for the future--as others have mentioned in this forum. It has the potential to grow considerably when you are ready to retire, given your age.

Once you start medical school/PA school, you won't have income. also, if you decide to do residency or other further training, your income will not be very high, until your training is complete and make partners. also, if you have to pay for your own school, don't forget that you have to pay your loans. (mine is $2000/month for the next 10 years).

My wife and I are comfortable now, only because we saved up during our residency (my wife more than me--she's Dutch) and only just bought our house recently with large down payment.

We don't live a fancy life, clipping coupons, use restaurants.com for going out, etc. But, we still have a lot of expenses such as mortgage, taxes, childcare, travels--families all over the country. My point is this: you should take into consideration all the advices you see here and make a decision that you think would work best for you and your wife, especially thinking about the future.

My current partner at work tells me I'm making a big mistake, buying a Tesla. He's getting ready to retire. It's kinda funny, and ironic that I'm giving you the same advice that I'm getting. At some point, you have to live your life and enjoy it with whatever toys you like.

Good luck and if you choose to buy the Tesla, have fun. I'm looking forward to mine.