#1
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Poor Relatives receive 50k inheritance; plan to buy BMW
Not actually relatives, but my serious girlfriend's sister/husband.
They are receiving 50k in $400/mo increments, and they plan to save up for a really nice BMW. However, as it is, they are renting an apt, have a 3 yr old, struggling to pay all the bills, in debt to their parents about $3500, and I think their annual salary is around 20k? (one is in school still). Possible pertinent info: their family is all bad with money, and they view me as some financial wiz I think; the sister/husband are planning on seeking my advice as to where to invest the $400/mo until they can afford the BMW. *Is there any tactful way to say that buying a BMW is the worst possible idea in the world? |
#2
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Re: Poor Relatives receive 50k inheritance; plan to buy BMW
I would just show them alternatives, and the power of investing and compound interest.
Honestly, throw it into an ING or Emigrant account for them if all else fails. Them buying a BMW is about the stupidest thing I have ever heard. |
#3
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Re: Poor Relatives receive 50k inheritance; plan to buy BMW
Yeah
basically state everything you just stated to them in a nice, non-condescending way and be done with it. As far as the money goes, how about a college fund for their 3yr old..after they pay off the $3500 they owe their parents plus any other debt they have? |
#4
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Re: Poor Relatives receive 50k inheritance; plan to buy BMW
Some people are poor for a reason.
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#5
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Re: Poor Relatives receive 50k inheritance; plan to buy BMW
saying, "if I were in your position, an expensive car would be the last thing id buy. here are better options..."
if they need/want a car show them a more reasonable amount to budget and where they can funnel the rest of the money. |
#6
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Re: Poor Relatives receive 50k inheritance; plan to buy BMW
You could work up some type of spreadsheet or something that explains what that $50K would earn in interest over 20-30 years. In fact, you could even use current bank CD rates if they are the type of folks who might find other types of investments too confusing. Then, show then the Kelly Blue Book value of a 20 year old BMW.
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#7
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Re: Poor Relatives receive 50k inheritance; plan to buy BMW
Great advice for them; Live in the most expensive house you can afford, drive the cheapest car you can settle for.
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#8
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Re: Poor Relatives receive 50k inheritance; plan to buy BMW
Just point them towards a Lexus. Similar performance, much better resale!
Swede |
#9
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Re: Poor Relatives receive 50k inheritance; plan to buy BMW
This is pretty simple economics. If you give poor people money (often example is a tax break of $X) they will most likely spend it, and a lot of times on 'luxury' goods.
You give a rich person the same tax break and it's another $X in savings. A good friend of mine in highschool came to me crying one day about how her parents might not be able to pay for her to go to college. The next week her parents bough a 30k car and some ridiculous piece of jewelry (it was christmas time). I told her that her parents were idiots. |
#10
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Re: Poor Relatives receive 50k inheritance; plan to buy BMW
if they are as poor as you say and only getting the money in 400$ increments i wouldnt worry. i seriously doubt that they will have the willpower to save 400 a month for a beemer. and if they do save for years and get one i would think that that proves how bad they want it.
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