Things You Can't Afford
By MJM

Starting wealth just isn't enough to get what an average person has in a modern day world. The 2 main items needed being a house and a vehicle. Sure you can rent an apartment and buy a used economy car, but what about those people who want a little more out of life?

A small 3 bedroom house costs about $60 000 (all prices US dollars). A medium one will easily run to $80 000. A house for $100 000 will be nice and usually have a garage, but it is hardly fancy. Once you pass the $150 000 range you start to get to the good 4 bedroom houses. Keep in mind that these prices do not take into account the location of the house, and assume average sized plots of land.

Houses in any "prime area" (down town, fancy neighborhood, next to river or lake or park, anywhere with a good view, next to the university or a major institution) will be 20-30% more expensive. The same rule applies to rent for apartments.

Now here are some sample prices for common used vehicles; (all 1994 models)

  Acura Integra 4 door         $ 13,500
  Ford Arostar 4 door minivan  $ 15,800
  Ford Mustang 2 door          $ 20,000
  GM Blazer 4x4 4 door         $ 18,700
  GM Saturn 4 door             $ 10,200
  Pontiac Firefly 2 door       $  5,200
  Honda Civic 4 door           $ 11,600
  Jeep Cherokee 4 door         $ 16,400
  Mazda Miata 2 door           $ 14,600
  Lincoln Continental 4 door   $ 21,700
  Nissan Sentra 4 door         $ 11,000
  Porsche 911 2 door           $ 58,000
  Toyota Corolla 4 door        $ 10,000
  Suzuki GEO 2 door jeep       $  9,400
  
Even with a reasonably good deal you can still expect a car to cost most of your starting money.

To solve this problem you can do what real people do all the time, get the bank to finance it! Typically a down payment of 10 % is required. Then you have to pay it off with interest.
Now lets discuss how to handle loan payments...

copyright © 1999 MJM