People with unrealistic expectations

[MoKelly]

You need to sit him down with pencil and paper and do the math. Maybe he needs to actually see the budget.

$25k per year income equates to about $12/hr. Probably about right for a job at a parts store. His wife's day care job probably pays about the same. All of this BEFORE TAXES!

Do the math, create a budget, and show him a realistic path to his goal.

I agree with this idea. All the talk in the world isn't as clear as showing the actual money he will have to spend.

For 2014/2015 the poverty level for a family of 4 is $23,850.

MoKelly

 

[Paddy]

bdog,

Sounds like he needs a wake up conversation to get back to reality. He's only in his mid twenties, just a kid. But most important he has most of his adult like ahead of him. Not uncommon for youngsters to have their heads in the clouds.

I think he just has his cart before his horse. He needs a real job/trade. When I was his age, I had 3 kids and was working as a carpenter building a small house without running water or electricity! I woke up after child 3 and went back to school to get my engineering degree. Let me tell you, that solved all the problems. In short order I was making 3 times what I was previously. With in 5 years I had 5 parcels of land. Within 10 years, my wife could quite her job.
I can't stress enough how important getting a good job/trade is to have a life where your wants and needs can be achieved.

A bit of wisdom from my wife's grandmother; " If it's worth having, it's worth working for it". During the depression she walked in to a law office and said she'd work for free for 6 months so she could learn a skill. They gladly accepted. When the six months came up, they offered her the paying job. In short order she started her own biz and employed family and friends for several decades

 

[MinnesotaEric]

Another thing you may want to do is get him a copy of


The Richest Man in Babylon which is a book of parables that teach in a narrative form how to build and manage wealth.
and, That Thing Rich People Do: Required Reading for Investors, a really well-writen, easy to read primer on investing and what to avoid.

Get him thinking strategically about money so that he can begin down the path of getting his money to work for him instead of working for his money.

 

[s219]

Well, if he's a young kid with pie in the sky visions or looking for shortcuts, sometimes you have to let folks like that make mistakes and figure it out on their own. If they waste time/effort doing so, that's on them.

I know sometimes I try explaining stuff to a couple young friends, and I can see the advice fly right past their ears as they continue on their way to dream land with a faraway look in their eyes. I am talking about basic stuff like "if you screw into that board at the end grain it's going to tear out", and of course they do it anyway, and of course it falls apart. If they are of the right mind it's a learning experience. If not, they are just idiots and they'll make similar mistakes over and over.

One thing I rarely do is follow up with an "I told you so", since it's not the way I was taught. My parents gave advice and let me make my own mistakes if I didn't follow their advice. It was a learning experience and I realized it was a "they told me so" moment all by myself. At work, when mentoring young engineers, I do sometimes have to follow up with feedback/critique, as it's our policy, but it's always constructive.

 

[sseelhoff]

Thanks for the replies and they are spot on. I have known this guy and his wife since they were in high school and they are in their mid twenties now. He works at an auto parts store and she works part time at a day care. I am pretty sure the 25k is close and I know their whole family and am pretty sure there is nothing else. They are hard working good people and are doing as good or better than I was at that age but I worry that they are fixing to make a big screw up.

I try telling him stuff but he doesn't really listen and it is almost like he thinks I am trying to keep him down or something. I have all the things he wants and me telling him not to do it doesn't go over good but I try to explain I am nearly twice his age and it took a long time to get where I am.

He finds all these properties and is excited and wants me to go look at them with him and I would love to offer advice on the properties but I think the whole idea is a bad idea given his circumstances.

I don't if you guys know about Dave Ramsey or not but I loosely follow his principles and it has served me well. I listen to his radio show sometimes and all the people calling in with the problems they are having seems like right where my friend is heading.

I was thinking about introducing him to Dave Ramsey before I got to your last paragraph. He needs to read some of Ramsey's stuff or attend Financial Peace University to comprehend where he is about to go off course.

Maybe introduce him to the Every Dollar app that Ramsey just rolled out? It's an online budgeting tool. It might help for your friend to see on paper what a $100K mortgage will do to his take home pay.

 

[pokerboy57]

25K a year with a wife and 2 kids is below the poverty level......
Heck 25K a year living at home with Mom and Dad is tight.

 

[MacLawn]

Well, at least the boy has dreams! That's good. He just needs to NOT allow his dream to turn into a nightmare. No way would I buy land in a restricted area like that; have to build a certain size house in a certain time frame. Right before I left for Vietnam, I could have bought a lot near a huge Georgia reservoir, not water front, for $500.00. But they told me you had to build within five years. Then when I returned, I learned that the five year time had been cancelled! I could have bought the place! Didn't know it then though.

Anyway, I hope he can someday get his land, but tell him to go outside of town, not nary restricted place.

 

[Jstpssng]

Are you sure that they WANT your help? As somebody said, sometimes people need to make their own mistakes. If they truly need advice, you need to know more than you do now to help them... Although referring them to pros
would be the best thing which they can do.

 

[SPIKER]

I'm with a few here.

1 Set them/him (best if BOTH of them are there) and get them a quick budget planned out.
2. Make sure they (again BOTH of them) are aware of ALL of the costs, in building on vacant land. (Well Septic and Drive can be 25K easy without hookup costs) permit costs can also add 10's of thousands of bucks to building costs on vacant land. Look at local well logs and see where water levels run might have to drill 100's of feet into rock for any water. Make sure wife knows might be poor water quality & require rationing and lots of work to do laundry or take showers etc..
3. Have him contact a couple local builders and get Cost Estimates to build something that meets the restrictions placed on the lands.
4. Add in costs for new appliances, furniture and utilities & $ to live in 2 places for 6 months as that has to be paid for while place is being built.
5. Make sure that he/they are aware living in country means not having high speed access to internet, grocery store shopping takes half a day and commuting to work adds 20 or 30 min drive to EVERYTHING so gas and food costs go up. Not to mention less access to fast food etc. which for family of 4 is a big killer expense. Not to mention all the driving takes toll on car/truck and gas budgets. Then driving kids everyplace they need to be school, games, sitters or even off to friends places.


Now the loan on bare land like most places& people have said have to have 20~30% $ down plus $ for home up front to start building or pulling even permits. Tell them point blank that while you want best for them that they need to understand that if they can't SAVE at least 20% a year NOW that building out away & thinking they can maintain their existence living paycheck to paycheck is not going to work and they will loose most everything they are working for & everything they put into it.

Mark