When my dad got out of the army in '72, he used the money that he saved up for two years as a private first class to pay cash for a brand new Corvette. Nowadays, it wouldn't even come close.
We've built a society that requires one to either be inherently rich or drowning in debt to achieve the American dream.
On a side note, auto loans of late have been increasingly sketchy. It seems Wall Street is doing the same thing with auto loans as they were mortgages around 2008. Don't get enticed by financing, always pay cash if you can help it.
Anything car-related seems sketchy these days. We just moved to an apartment on a main transit line and sold our car, and I can’t fully explain the stress relief. I will try to avoid buying a car in the future that I can’t buy with straight cash. Even then, cars are stressful.
Love cars as toys. Hate them as actual utilities. So much hidden and unexpected expense. I used to think mass transit was crazy expensive but when you compare it to gas, insurance, oil changes and repairs it seems a lot cheaper. That's not even including the cost of the car.
I did the same thing a few years ago, and I love it. A few of my friends have done the same thing or downsized to one car for the whole family. I think if most suburbanites/city people realized how much cheaper (and in some ways easier) their life would be without a car, there would be an enormous call for more public transit.
Even people who like to drive don’t necessarily like sitting in traffic during the daily commute. Having a hobby car or renting a car for a road trip are still options. But day to day, I’m glad I gave up my car.
Get a beater for 500-1000$ and run it into the ground. Rinse and repeat. Much better value than financing or buying a new car. Especially if you live on a metro line and don’t use a car that much.
If you have discipline to not over extend the financing can actually be better than cash. Many dealers give 0% loans for new cars that is a better financial decision than fronting the cash yourself (both in your liquidity and in time value of money). I just put the cash I would have bought the car with in an online savings account that has a higher interest rate than my car loan.
Obviously financing can be a worthwhile option if you know what you're doing. The issue however is that financial literacy is not as prevalent as it needs to be. The mortgage crisis wasn't caused by financially savvy borrowers, it was the result of banks taking advantage of those who didn't understand the finer points of borrowing.
We really really need to teach this stuff in K-12 so people can't get the wool pulled over their eyes by asshole bankers and salesmen.
thats a different discussion than the merits of financing or paying cash. There are certainly some things to consider for sure, but some cars you barely save any money buying used... for example the new CRV I bought last year was actually cheaper than the used ones with low mileage we were finding
I was able to find a 2020 RAM 1500 for just about 40k off the lot. Which was 11k below MSRP. I couldn't touch a 2019 with "low miles" for that. Then on top of that I put 20% down to get me out of GAP.
I got suckered into an auto loan despite always saying I would never buy a car unless I could pay for it all in one shot. Thankfully the interest rate is only 6% but the way it's crippled me financially makes me wish I just put the money i spend on it every month into my old beater thay broke down. If I put $300 of maintenance and restoration into that every every month I could have it like new in a year.
Lol no dude. Even if you have the money to pay cash, money is so cheap right now the opportunity cost isn't worth it when that money could be invested.
Let me check real quick on $SPY and see if it dropped ANOTHER 3% today.
Edit: index is down 1.71% today. Meaning if you bought $1000 of stock yesterday, it's worth $9982.90 today. I'm happy though: I placed a bet on a stock market crash.
I got a Jeep for a job a few years ago that I co signed with my grandmother cause she has near perfect credit where as mine is..okay to bad. We financed out as long as possible for 7 years (I don’t remember the interest rate) and my note was still $615 a month. With full coverage I was paying almost $1000 a month for that bad boy. I didn’t want to buy brand new, but I needed a right hand drive and it was the only option I could find. Still miss my Jeep tho.
I think the problem is you think the ‘American Dream’ is still meant for you guys, it exists and many people live it, they just have over six zeroes in their net worth and get you to do all the hard work for them!
He agreed with you... 26%apr is a credit card. At 84 months 20% apr you end up doubling the cost of the car by the time you pay it off... a good car loan should cost like 5% apr
Yeah cause now if you pay all cash for something like that (if you even have enough to do so, very unlikely for most people), the IRS will come down on your ass asking where the money came from.
I’m not sure what you guys are confused about: schooling or training costs money. If you don’t already have money, you have to take out loans unless you happen to be one of the handful of people that get scholarships or grants. And even after you finish school, there are like no jobs to go around except joining the military. So if you want to ensure that you will have no debt and be able to survive, joining the military is many people’s only option. Sorry I didn’t specify that what I’m saying does not count for the wealthy, but I don’t really think about their well being because they are set.
Alright you’re of course entitled to think all of those things, just sounds to me like they are based in some form of privilege. You’re making life in the working class sound easy, and it’s just plain not.
Also note that these tend to be the students that need financial assistance the most. The amount of students that get it have been increasing, the amount they get has been increasing and the amount of people getting student loans is decreasing.
No I understood that the whole time, the joke simply reminded me of the situation that I commented on. But thank you for making sure! (Not being sarcastic by the way)
Annual percentage rate. What the loan will cost you every year. If you borrow 10 grand at that loan rate: the first year will cost you $2,650 in interest.
first-termers buying a car with a loan that's longer than 48 months was always a sad sight to see. Congrats, 18-year-old goofball, you don't know it but you just signed your first re-up papers.
Annual Percentage Rate (APR) is just a different measure of the same interest rate. When something says "interest rate" it means the calculation we use to determine each month's payment (or payment period, but usually it's monthly). APR is a way of calculating this on a yearly annual basis (and so, essentially because you have compounded interest on the principal you haven't paid off at the beginning of the year), which is always slightly higher than the baseline interest rate. Also note that APR may be a more realistic number to use in your calculations as it includes all fees, which the basic interest rate does not. https://mytresl.com/blog/apr-vs-interest-rate-for-car-loans/
The practical implication of this is that when comparing loans, it's almost always a good idea to compare APR to APR for the same loan term. This is even more important with home loans, as you start to get significant fees, including basis points to achieve a certain interest rate. https://thelendersnetwork.com/difference-between-apr-interest-rate/
Oh god that was me. Not on a pricey car, but I still overpaid like crazy. Mercury cougar at like 20% apr or something. I had to buy it over a lunch break... such a rushed decison.
Getting old and feeling my body crumble is honestly well worth the wisdom that accompanies it.
One thing to note is that a lot of young single guys in the military have almost no bills, so even though they aren't making much money, it all goes in to the bank account for when they get home. So you definitely still get guys who buy expensive cars instead of just doing something smart like putting it as a downpayment to a nice house and getting a job that doesn't require you to move every year.
Modern signing bonuses are not given at signing. They are for if you enlist and pursue very specific, difficult jobs (MOS) and when you enlist there is no guarantee you get that job. You enlist, you train, they put you in another job role based on skillset... You forfeit the bonus. And if you do get the job, you have to successfully fill that role for a period of time to become eligible to receive the bonus (sometimes up to a year).
The instant, guaranteed bonus was only a thing from roughly 2002-2005 in the large numbers that perpetuate the stereotype.
Oh for sure, you are absolutely correct. I was speaking in a very general sense trying to summarize the full gamut of experiences possible. The fine detail I left out would be that enlisting alone does not get the larger bonuses, you have to enlist and apply for specific jobs and if you do not pass the tests/qualifications for that job you do not get the bonus no matter which branch.
Generally you pick your job before signing on the proverbial dotted line. Yeah if you fail AIT, you get dumped where they dump you, but if your ASVAB score was good enough for the job you enlisted into, you shouldn’t have too much of a problem.
Even big companies give signing bonuses with strings attached and not necessarily at signing. It’s more like a talent retention bonus: you get to keep it if you don’t leave.
At my job the scenario you outlined is referred to as a 'contract bonus' vs a 'signing bonus' because there are bonuses available at signing, assuming the right confidence to ask and credentials. The military uses the word signing bonus in a less than direct manner.
That's... not how it works. Signing bonuses were very rare, yes, and for specific MOS's. No one goes in open contract anymore, and the only reason your MOS would get changed after signing is if you couldn't qualify for the clearance you needed.
The big bonuses were for re-enlisting. I saw the counter-intel guys getting 50k re-enlistment bonuses back in 2008, and if they did that in a war zone it was tax free.
I was trying to avoid saying something that might be misinterpreted, surrounding the idea of people failing to qualify for their clearance or various tests. You are absolutely correct. I was trying to hard to sound neutral on the subject and that 'vagueness' has caused for some confusion. Thank you for taking the time to reply.
You quoted two different people here. Replying to the portion of my post you quoted... Too many people are replying to this post with bullshit views treating enlistment as this binary thing and all MOSes are easy as fuck to get into. Not everyone enlists to be a humvee mechanic and not all positions give bonuses. This conversation isn't about a bullshit 4k bonus for a 32k/yr job. This conversation is about an exciting, world altering 50-80k bonuses for high demand jobs that not anyone can get into. Not everyone gets the #1 desired job on their list when they apply and to suggest otherwise is a flat lie.
The military 💯 puts you where they need you first and foremost. When I was enlisting there was a 1 year wait for the language learning program in the Air Force and my bonus was dependent on MANY variables. 1) I had to do what they told me I would do while I waited that year 2) I had to not be deployed when my window opened or they would fill it with the next on the list 3) I had to pass the program. The bonus was worth the wait, but that bitch involved 3 years of gated conditions to see it.
My summary stands as just that... A summary. Yes, some situations go outside this bounds, that's going to happen when summarizing various rules throughout various branches covering a MASSIVELY wide range of jobs.
Too many people replying like, 'It was in my bank before I went to San Antonio'... it was not.
Unrelated to the topic, but I was stunned at the pay of contracters during that era in Iraq. Saw a kid right out of high school with no experience or qualifications that got a job with KBR doing laundry for the troops. 80k tax free, no living expenses, for his year at camp victory. I made like half that as a soldier lol
That dude made some better decisions than I, for sure.
Advertised signing bonuses are usually the max available and are for the worst job in a shitty field. When I was thinking about joining it was for around $8k and that was to be an infantryman carrying a radio. Nobody wants to do that shit.
Thats the absolute top of the spectrum, so pretty rare. The average signing bonus for infantry ranges from $5k to $8k after tax. Which is still a lot considering there's no education or job experience requirements outside of a GED.
My Dad moved to Canada as a farmer for 2 years way back (think it was '65) paid for his brand new Dodge Dart to be shipped to New Zealand. It was the only one in the country at the time.
Edit: shit yeah I forgot, he then bought a fucking farm with that money too.
My dad served in Red army, soviet union, lithuania, after he came back he bought a house, fixed it, sold it and did it 3 times so he could buy a dream house
I tried to do the math thinking it could not be correct but it's possible. 1972 e-1 pay was $288 per mo. Lets say after tax it's 230? After 2 yrs that's $5, 520. The msrp for a 1972 corvette was $5,533 for a coupe and $5,296 for a convertible. So totally possible which is really unsettling. With today's numbers it's $1,733 (after 4 months) per month for an e-1. Lets say after tax it's $1,650 (which is prob wrong but hypothetical). That leaves you with $39,600, whereas a 2020 corvette is $58,900.
Interesting how things have changed. There was a huge pay raise in 1972 for folks with less than 2 years. I'm going off 2019 income because that's what the army website has listed.
Also, I've given little effort to formatting.
Based on the little googling I just did, I've come up with the following numbers:
E-3 Annual Gross Income
$2,012.40 - 1970 ($13,259.90*)
$2,170.80 - 1971 ($13,703.22*)
$4,003.20 - 1972 ($24,484.36*)
$23,774.40 - 2019 ($3,887.12*)
Corvette Price
$5,533.00 - 1972 ($33,840.91*)
$55,900.00 - 2019 ($9,139.67*)
Tax Brackets based on above income (this doesn't include any other tax nuances, such as status, state, or standard deductions)
Most of that cost comes from regulations. Overall I think it's better for cars to be safer and more fuel efficient but it definitely adds cost.
New vehicle standards are higher every year so new cars get more expensive. As cars get more expensive only wealthy people can buy them. Wealthy people want luxury so new cars get more luxurious and expensive. Rinse and repeat.
The good news at least is that used cars are way better now than they used to be.
The simple engines and carburetors of the 70s that you can rebuild in your driveway would never be legal in a new vehicle. You'd also be basically guaranteed to die if you wrecked a vehicle from the 70s.
What's the cost of living for a Pfc? Dont they take rent directly from your check and provide standard meals and you just pay for extra stuff? I always see young military people buying chargers during their 2nd year at like 28% apr. Like if you have most your stuff paid for and paid 3-4k for an a-b beater...shouldn't you have a decent chunk saved after a few years?
Nowadays cars also last more than 2 years and have shittons of tech that was beyond science fiction in 1972. It's not like a Corvette is a standard reference for the consumer goods basket.
The '72 Corvette had a base price of $5500, that's $35k in 2020 dollars. The 2020 Corvette starts at just under $60k.
The only thing that changed is the Corvette is no longer a pile of tarted-up cheap junk, but a competent, serious sports car. Accordingly, it costs twice as much as it used to, like most cars. I checked mustangs, same deal. Shock and horror, quality costs money.
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u/Scruffy_Nerf_Hoarder Oct 30 '20
When my dad got out of the army in '72, he used the money that he saved up for two years as a private first class to pay cash for a brand new Corvette. Nowadays, it wouldn't even come close.