‘What the hell!’ I’m 28, have no debt, a 401(k), Roth IRA and $45K in cash. Should I save for a house or buy a Tesla Model 3?

Dear Quentin,

I was switching between buying a new car or paying the down payment for my first home. Since my parents are very money conscious and (still) keep an eye on my finances, I got into a difficult situation.

The original plan was to save 20% to 30% on a down payment for a condo in the Los Angeles suburbs and get it to market within the two years or so, and right now I’m about 40% toward that goal .

With the Green Act possibly back in sight, the Model 3 has been a temptation, especially given all the additional bonus incentives my state offers, with a net end price of around $ 27,000. I don’t necessarily need a new car, but this seems like a great way to save money on a vehicle with smart features.

With the Green Act possibly back on the horizon, Model 3 was a temptation, especially with all of the added bonus incentives my state offers.

I am 28 years old and have been out of debt since January 2021. In terms of retirement, I am well on my way to maximizing 401 (k) contributions this year and I have already exhausted my Roth IRA contributions and if everything stays the same I will be around 60,000 by the end of the year Have retired dollars.

In terms of cash and investments, I’m currently sitting at around $ 45,000. I am currently saving and / or investing 50% to 60% of my salary to take away as I moved home with my parents after my layoff last year and started a new job remotely.

I don’t know whether to (a) buy the car outright and empty my savings, as I will likely have the time to save the money again before a possible apartment crash, (b) not buy the car and keep saving for the down payment (c) do both, or (d) put the money elsewhere.

As a financial conservative, my parents are strongly against buying the car because it is a depreciating asset and they believe entering the market should be my priority and they think I should keep the deposit waiting to jump into the market, a good deal whenever I see it.

I think I can buy the car and buckle up and save more aggressively to replenish the money. Any advice for me?

Pressured by parents

You can email The Moneyist with all financial and ethical issues related to coronavirus at [email protected]

Dear pressure,

What the hell! Give in to your impulse and splash on the Tesla
TSLA, -4.84%
Model 3. You are empowered by knowing that you are using your purchasing power to get America back on its feet while making a cool statement that you have finally arrived. Fully embrace the American dream of being in the middle of the eco-warrior, Tesla-driving, tech-savvy zeitgeist. All that each of us has is today, after all, in the end, global warming will come for all of us.

Drive through the neighborhoods where you’re looking to buy a home in your thirties, forties, or fifties (it all depends on how the property market goes by then) Take a close look at these houses, assuming they’re not covered by manicured hedges, and enjoy the view. Drive back to your parents’ house, honk the horn so they can marvel at Elon Musk’s bold vision for themselves, and then, only then, kindly ask them if they would make room for your Model 3 in their driveway.

I’m kidding, of course. You have done everything right so far. Buy the house first, and then buy the $ 27,000 electric car later. You already have a goal in mind. Don’t let a car stop you, no matter how cool it is for you to drive, to keep you from that destination. Listen to your parents. They saw more than you did. They are trying to get you on your way to financial freedom. And as beautiful as they are to drive and be seen, you don’t need a Tesla to achieve that.

The money is:“Warren Buffett and Harry Potter couldn’t retire these two early”: Our wasteful neighbors said our advisor was “lousy”. How is it that WE retire early?

Hello, MarketWatchers. Check the money is private Facebook
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Group in which we look for answers to life’s toughest money problems. The readers write to me with all kinds of dilemmas. Ask your questions, tell me what you want to know more about, or check out the latest Moneyist columns.

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