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It's a lot better to get rid of it. Then you're not paying interest on the loan and also riding the depreciation curve on the asset value. You'll have more money in the end if you do it that way than paying for a car you aren't using. But yeah, if you can't find enough to cover the difference via a reasonable interest loan then you have no choice.

This is a housekeeper that comes to the house 3 times a week

If you borrow $10k at 10% and paid $1k/year, 100% of your payment would be going towards interest. That would be an interest only loan.

Because you don't want to pay this forever, you ask for a constant yearly payment which will eventually get rid of the loan. Now you pay ~$1,175, but since the interest cost ($1k/$1175=85%) stays the same, that means $175 is going towards principal. Next year, you only owe 10% interest on $10k-$175=$9,825*10%=$983. So this time, $1175-$983=$192 is going towards principal. And repeat for 20 years and then the loan is paid off. It goes to show how powerful compound interest is, both positively and negatively.

BTW, if you wanted the interest specific part of your payment to be 5.5% of the overall payment, you would need to pay ~$950 next month. Then the following month, about $850

>Am I essentially paying for expected full-term interest (if I were to make 0 additional payments above minimum monthly payment)?

You need to clarify this portion of your statement: "My monthly payments are "ahead of schedule" by 91 days."

Are you paying future months, or are you applying your extra payments towards principal?

Is it otherwise healthy? I've repaired my VW 3 times when the repair has exceeded the value, 2 deer, 1 curb. The first two times insurance cheerfully fixed it. The 3rd time they wanted to total it and actually offered me 1,500 more than the repair would have cost, but I told her it was in stellar condition and asked that it not be totaled. She pushed back and said she'd do what she could but even if it gets totaled, I always had the option of buying it back dirt cheap and fixing it myself. I probably would have come out slightly ahead. But as it turned out they fixed it with a clear title. The carfax must look terrifying though.

If you like it, fix it. If you don't then let them total it and keep it. I don't think it's much more complicated.

Thank you. I does make me feel better to have 1 fund where someone is minding the store. I hear you on keeping it a small part of my portfolio.

Yea, the expense ratio is high.

I wouldn’t change anything for the “possibility” of a $20k raise. Also, is the 5 days a week plus 1 Saturday a month equal in hours to the 40 hours you are currently doing? Or will you essentially be working more hours with only a possibility of more money

Not very many managed funds beat indexes over a long period of time especially when you consider expense ratios. In addition, actively managed funds tend to have larger capital gains distributions (meaning you get to pay your taxes annually instead of years or decades later).

Note that I didn't say there are none.

If you're talking about a contractor (e.g plumber, carpenter, etc.), it largely falls on them to report income.

If you're talking about a caregiver, cook, cleaning staff, etc, then you need to start withholding Medicare and social security if they make more than $2,100/year.

Studies have shown that most active managers underperform their targets (net of fees) over the long term.

If it’s a small percentage of your overall assets and if it makes you feel better, go ahead. But I wouldn’t put more than 5-10% of my long term assets in actively managed funds.

>My managed fund does a bit better than the index funds,

How much are you paying for that "bit"?

I did this a few years ago in the summer in NYC because competition was high, we were three grad students, two of us had out of the country guarantors, and we needed to move in in less than a week. I would absolutely not do this now, I see zero reason unless you really think you're not going to get approved (i.e. no income, low credit score, an apartment above 40x your rent, etc.)

>Isn't it more on the worker as an independent contractor?

Only if they meet the IRS criteria for self-employment. OP has implied they don't (such as a regular nanny).

do managed funds do better net expenses?

And, depending on one’s ambition, a background check or reporter finding out that you employed someone under the table is not a good look. (Doing it the right way is the right thing to do, whether you get caught or not.)

You are what? 23? Relax. Start saving SOME money, but you are in your twenties once. Travel, have fun. Start thinking about what you want from your life so you can live with intent and not just let the world happen around you. Yes, you can set a solid footing by saving now, but do that by passing up on luxury, not by feeling shame and guilt.

Travel, hang with your friends, make new friends, get laid, watch the sunset then party until it comes up. You have the rest of your life to worry about the small stuff, you have the small window of freedom and enough money to enjoy it.

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Payroll taxes are who to worry about, that involves not just the IRS but the state DOR as well. The state DOR is what you want to really worry about, they're a lot more hungry than the IRS and have more time on their hands.

What kind of work are you having done? Why aren't these just contractors? Is this like a babysitter or housekeeper?

Appreciate your concern, kind redditor!

Actually, as opposed to most of the postshere on this sub, I’m currently in the most stable and lucrative financial situation I’ve ever found myself in. My long time girlfriend and I both have stable good paying jobs and we’re home owners. I’m just trying to maximize my resources, if you will, and make the best long term decision as far as the vehicle goes given the current price of cars. Reddit generally has some pretty smart people lurking beneath the surface!

It’s not even about the interest, worse case is he loses it or disputes you gave it to him

Do it right. I just worked for this dude and he claimed he was “holding my overtime” time rolled around and the season slowed down and asked for it back and got every excuse in the world other than the truth. I thought I was helping him by him not needing to pay me the OT and figured he would get it back around tax time with the way his “business” runs. Thankfully I got my dad on also and he witnessed this dude feed me this utter line of BS.

Morality of it avoid ANY complications with ANYONE and just do it by the book.

The repercussions will cost far more than that 15%.

Ask Joseph, he’s doing prison time soon. ❤️

She's probably right about the risk of an audit. But all it takes is one disgruntled employee to ask here and get full instructions on how to report their employer.

If you're compensating your employees enough that they're all happy as Scandinavians, then you can afford the payroll taxes. If you're not compensating your employees enough then you can't afford not to pay the payroll taxes.

I am in the military, doesn't give you any credit. For the most part the credit agencies have no idea what your profession is, nor do they care. When you request to get a loan they ask how much you make and that, along with your credit, is how they determine how much additional obligation against your credit they can take and give to you.

There are multiple factors to your credit, and one is a history of paying your on your credits. Starting that early is a good thing, although the car payment is probably not the best way to do so.

Isn't it more on the worker as an independent contractor? They are responsible for paying their own income tax.