Hey guys, I'm in a little bit of a dilemma here. I'm currently 20 years old and I've been saving my money for a very long time. I've never had a "formal" job, and I've never paid taxes. I have about $8k in my bank account, $7k in the stock market, and about another $30k in cash. I've been very successful with an eBay business and craigslist hustling, but I seriously don't know what to do. I'm worried that if I put the money in my bank account it'll look fishy considering I've never had a job on paper. I don't want the government thinking I'm a drug dealer or something! I'm also hoping to buy a house within the next year, but I don't know how I'm going to do that, yet. Can someone please give me some pointers?
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Try a No Doc loan, or a Niva loan. (No Income, Verified Assets) If you can put 20% down, you'll be in good shape. The banks like seasoned money, so if it is cold hard cash, you might want to park it somewhere.. If you haven't paid taxes, once you own property, the IRS may redflag you, and you may get audited, just a word of warning.. You might get a tax lien slapped on there! There are plenty of lenders out there, and you could always get a hard money loan. You should check out alot of lenders and see who will give you the best deal. Beware of the bait & switch dudes, they'll quote you a low rate, then when you get to closing, you'll get raped, and risk losing your earnest money if you walk!
1) Get a job; have your pay direct deposited; live off your cash.
2) Start depositing small amounts of your cash into your savings account (like $200/week).
Seriously, you know what the problem is, and there are only a few good solutions. If you don't have a job, you don't have tax-advantaged retirement savings. Get a job. You don't have to worry about this job supporting you if you can make the money you need to make. Plus, maybe you can get some health insurance, which is nice. In any event, get a job, of some sort. This may mean formalizing what you are already do so you end up paying taxes. I know taxes are a drag, but not paying taxes has the potential of making you look like a drug dealer and/or getting you in trouble for tax evasion.
If you don't formalize what you are doing, look for something that would be fun. Try working at least part time. Do something that will yield a nice employee discount on something you already need (food, clothes, etc). Make sure you participate in any eligible employer sponsored plan, and start a Roth IRA. Save some more money, because they won't want to see money that hasn't been in the bank for at least six months, in many cases.
he has a job hussling eBay and CL. let him be on that. people can make alot.
But yeah, you need to have a real business license, pay taxes, etc. The IRS isn't too keen on folks with no documented income (at irs) buying houses, unless you want to be audited or visited by the DEA.
So you have a business, you are an employee of your business. Nuff said. I would goto creditboards.com and build up business credit (doesn't show on your CR) after you get the house and use that for your business if necessary.
With a good 700+ score you can get a decent no doc loan for sure. Just follow the rules. There's alot of people in the mortgage forum on creditboards that are brokers, who can help you (and they can even handle your home purchase). Those guys are motivated work-at-home brokers who make alot of their money off net-business since the overhead is pretty low. They are lean , which means they won't waste your time or theirs if things are not going to go down.
Check out DCU credit union too, they are local here in atlanta, and it seems every broker quotes their rates.
What happens is you pay the broker some fees and they make sure all your ducks are lined up so they get paid when the loan closes. IMO this small fee (well not small, sometimes alot) is worth it. Because my last closing was hand over the required docs, house inspection, wait 2 weeks no word, go to closing sign docs, get keys. no surprises nada, actually almost scared me they didn't say a peep until we arrived at the lawyers office to sign the docs. You'd think they'd email you like every day saying "it's still 100% and 3 days to go" lol. BTW they did do IRS W-2 verification, took my PDF bank statements, and never called my work to verify income lol.
creditboards mortgage forum, golden for advice. If you are in atlanta i can give you a guy thats done several mortgages for alot of my close friends. He's probably not the cheapest but he's never screwed over anyone, and word of mouth referal is good stuff. I also know a good inspection company, dude tore up my new house finding little little things i'd have never considered.
My pointer is that it is not safe to leave $30K in cash laying around the house - I would invest some in a too large to carry High Quality safe that is fire proof.
notanormalgent said:Hey guys, I'm in a little bit of a dilemma here. I'm currently 20 years old and I've been saving my money for a very long time. I've never had a "formal" job, and I've never paid taxes. I have about $8k in my bank account, $7k in the stock market, and about another $30k in cash. I've been very successful with an eBay business and craigslist hustling, but I seriously don't know what to do. I'm worried that if I put the money in my bank account it'll look fishy considering I've never had a job on paper. I don't want the government thinking I'm a drug dealer or something! I'm also hoping to buy a house within the next year, but I don't know how I'm going to do that, yet. Can someone please give me some pointers?
notanormalgent said:I've been very successful with an eBay business and craigslist hustling, and I've never paid taxes.Great! Could you please post a little bit more information about yourself? I need just a little bit more to finish filling out my report. You could save me some time by filling in the blanks here.
you do realize that eBay and paypal can give your info to the irs and address match. it could be 10 years from now and you'd be liable for state and federal taxes and penalties and interest.
think about where our nation is going with data aggregation..
Your overarching problem is that you have no verifiable income. You don't have a W-2 or a tax return. You need to get one or the other or both. Whether that entails getting hired by someone else or just paying taxes on the things you do now, you won't easily be able to play ball with banks to get loans unless you do.
mespin said:Your overarching problem is that you have no verifiable income. His overarching problem is that he is going to prison for not paying taxes.
notanormalgent said:Hey guys, I'm in a little bit of a dilemma here. I'm currently 20 years old and I've been saving my money for a very long time. I've never had a "formal" job, and I've never paid taxes. I have about $8k in my bank account, $7k in the stock market, and about another $30k in cash. I've been very successful with an eBay business and craigslist hustling, but I seriously don't know what to do. I'm worried that if I put the money in my bank account it'll look fishy considering I've never had a job on paper. I don't want the government thinking I'm a drug dealer or something! I'm also hoping to buy a house within the next year, but I don't know how I'm going to do that, yet. Can someone please give me some pointers?
go get a 5% down or 0% down mortgage, you could buy at least a million dollar McMansion, we talk from there
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