Thanks for the feedback, @Twoin18: I think this guy would most likely to sell the car for few years in use.
I don’t know if there’s any course in personal finance taught at Berkeley, the closest I could think of was Intro to Engineering Economics something related to the “application of economic principles and calculations to engineering projects.” I still remember the first chapter covered the importance of interest rate. Maybe UCB Extension or Haas does teach personal finance, I don’t know. (UCB does offer courses such as investment and corporate finance theory.) Conventionally, UCB does not have “practical” courses such as this taught on campus. This type of courses usually are self-paced learning. Stanford, on the other hand, has several similar courses offered in lower division lately:
-Intro to Financial Decision Making;
-Financial Wellness for a Healthy Long Life;
-Personal Finance for Engineers
"Many of the people who live in SF but do not work in SF prefer to commute by other than driving (train, ...)" You're right but I have never seen those commuters with happy faces when taking CalTrain in the early morning. :smile:
Exactly, it's not how much you EARN, but rather how much you SAVE in the end of the day with a rather good quality of life. I was surprised to learn that:
“the typical American household has an average of $8,863 in an account at a bank or credit union, according to a recent report from Bankrate that analyzed inflation-adjusted data from the Federal Reserve. That’s purely in liquid savings, so it doesn’t include retirement funds or other investments.”
And further studies shows that “how much money Americans at every age have socked away.” :
Age 34 and younger
Singles with children: $1,350
Singles with no children: $2,729
Couples with children: $3,682
Couples with no children: $4,727
Ages 35 to 44
Singles with children: $2,422
Singles with no children: $3,693
Couples with children: $10,399
Couples with no children: $5,306
Ages 45 to 54
Singles with children: $4,163
Singles with no children: $5,763
Couples with children: $15,589
Couples with no children: $11,483
Ages 55 to 64
Singles with children: $6,911
Singles with no children: $6,786
Couples with children: $17,587
Couples with no children: $15,722
Ages 65 to 74
Singles with children: $6,652
Singles with no children: $7,292
Couples with children: $13,164
Couples with no children: $15,297
Age 75 or older
Singles with children: $6,909
Singles with no children: $9,981
Couples with children: $8,967
Couples with no children: $16,025
@firmament2x : Haha, I was actually going to use it as an example but later found out any of Tesla cars is way more expensive than Volvo XC40. And I was pretty sure ucbalumnus might not disagree with the item.
@firmament2x , @ucbalumnus : To rent or to buy a house, here is a nice quote i found on the web,
“If you’re moving every few years or you’re in a super expensive market (like San Francisco), renting is probably the cheaper option. But if you’re going to stay put for the long haul, you’ll likely make out better buying—especially when you pay off your home.”
Thomas Stanley did note that engineers tended to be more frugal than those in most professions, resulting in engineers being more likely to become “millionaires next door” (although above average pay levels certainly help). Perhaps that may be due to the mindset of engineering work, which is designing something that provides the desired function within various constraints, of which cost is commonly one of the biggest. Some engineers could be applying this mindset to their own personal finance habits.
Thanks, @ucbalumnus for the #44 Post. Obviously I’m not a qualified engineer… >< I really think such course should be a required “core” course for all undergraduates.
While Teslas are popular (and expensive, although “fuel” is typically cheap for them), they are much less common among recent college graduates, probably due to the same reasons that more expensive cars are generally less common among recent college graduates.
I’m pretty sure within 5-10 years or so, most of us (including those new graduates w/ down payment from parents), will be “driving” electric vehicles with level-5 autonomous technology.
@Twoin18: 1st, no comment on T company and any sort of investment advice. :neutral: My point was that, again in my humble opinion, the technology will be fully ready within 5-10 years, and innovators/early adopters like me, will definitely give it a try. That’s all.
I’m just thinking about prospective costs * and benefits*. In my example above, my two options were to commute from one’s parents’ home, or go in with housemates on a purchase, which doesn’t leave a lot of options elsewise, but I’m justt trying to make an impression, because I’m generally so opposed to renting.
For the latter scenario, I’m just thinking about the benefits even if it’s not a shorter-term loan with high up-front interest payments because these will still reduce tax liability on one’s tax return. Any renting scenario will not reap effectively any credits and lower tax liability, but it will of course be a lower cost/month. A purchase will also help the grad build credit.
Even if these grads’ jobs are short-term at their first jobs, and undoubtedly the FAANG companies must have a lot of turnover based on their hires – I cannot see anywhere near their expansion based on the pure number of these new hires per year – someone else in the four housemates scenario can assume the portion of the loan of the short-timer (or have someone, say, a parent, whomever oversee the entire loan and have all the occupants pay in; in which case it’d be easier to leave early).
I’m not a financial planner/counselor but if I get a chance, I’d like to go over your revenues and expenses and convert them into a monthly basis, because the new grad will be working for about half a year to the end of the year. I didn’t really get to see your initial list or your revised one in depth, but I don’t think we can expect these grads to give up their interests, which I’m guessing would be gaming.
Edit: Here’s an article on housing in the Bay that appeared today:
Sorry @ucbalumnus . . . per the third paragraph in your quote:
Can the SF Peninsula experience a bubble burst? I’m neither an economist but I wouldn’t think so based on the housing markets of the northeast, particularly Boston and NYC as the demand for housing there and the Bay would far exceed the supply. But if the techs start leaving for Texas for favorable business taxes and cheap land, I think there would be sufficient notice.
@Twoin18 , are you referring to purchasing stock on margin from Robinhood? Is that a real problem?
I live on/in the SF Peninsula/SV Valley Area. Have you seen the massive amount of commercial and residential building here?
Just a few examples, Redwood City planners have a done masterful job in redeveloping their downtown. Facebook has extended their campus(es) by an enormous amount. And Stanford, both the mall and the Medical Center, continue to expand their footprint.
To me, we’re in a sweet spot. Near the ocean/coast, weather is fantastic, lots of jobs, Tahoe skiing is about 4-5 hours away, Napa/Sonoma, Monterey Peninsula aren’t too far away, and your kids can attend the top rated UC System.
House prices did fall in past economic downturns (2001 and 2008). Homebuyers who happened to lose jobs during those times may have been trapped in negative equity situations but with no or much reduced income to keep their loan payments current, or pay off the negative equity when selling.
Our neighbors were forced to do a “short sale” (selling the house with negative equity and walking away from the balance) in 2008, after getting divorced and losing a high paid job. Definitely happens even in the best markets. Prices recovered after that and have doubled since, but it can get very ugly very quickly if you don’t have much equity in your house and the savings to ride out the storm.
The price decline in the 2008 recession was much less severe on the SF Peninsula than elsewhere in California (20%-30% compared to 50%-60% in the Central Valley) but was still a major problem in those places where people had overstretched themselves to buy a house and had no equity left.
I wonder what are the major factors or types of risk that may impact the real estate market in the SF Bay Area? Environmental risk such as the big one? According to an article (Oct. 2019), “there’s a 72 percent chance of a major Bay Area quake by 2043.” In my opinion, the COVID-19 pandemic may also play an important role for possible price/rent decline this year due to the facts that less foreign immigration, investment inflows and high unemployment rate.
Other economic factors include interest rate and inflation, liquidity risk and legislative risk such as federal tax reform and repealing Prop 13 in California.
“Housing price appreciation in the bay area has skewed the inflow of new residents towards higher income levels, while skewing the outflow towards those who earn comparatively less.” - This is a perfect example of “price-driven mechanism!”
Source: The Outflow of Bay Area Residents Spreads to Higher Income Levels
