Engagement vs. Down Payment?

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Engagement vs. Down Payment?

Devin JamesPro Member
Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes

Hello all! I am in a dillema and that is whether I should purchase an engagement ring or use the money to put down on my first house. Here is some info about me:

My girlfriend and I have been dating for 6 years (since 8th grade) and I have no doubt in my mind that she is the one I want to marry. Since December 2018 I have been a member of bigger pockets, studying and reading as much as I can about real estate. I plan to attend law school in the fall of 2020, and I want to buy my first property in lawschool with an FHA loan ( law school is 3 years long). I have been saving up money from my part time job since December 2018 and I have a goal of $10,000 by the end of the year. I am 19 years old and I will be graduating undergrad in the spring of 2020. My girlfriend is 20 and she graduates in the fall of 2019 but uncertain on if she will go to grad school or not.

Any advice is appreciated!

- also, I will graduate undergrad with no student loans due to an athletic scholorship and I plan on going to a law school that offers me the most money.

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Chris MasonPro Member
Moderator
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
7y

This is more relationship advice than real estate, but talk to her best friend about rock size & timeline expectations. A lot of young ladies these days don't expect a giant massive rock and aren't in a super duper rush to get hitched.

Other than that, I'd point out to you that a diamond big enough to keep her dry when it rains will likely cost a lot more than roof big enough to keep her dry when it rains...

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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    7y

    This is more relationship advice than real estate, but talk to her best friend about rock size & timeline expectations. A lot of young ladies these days don't expect a giant massive rock and aren't in a super duper rush to get hitched.

    Other than that, I'd point out to you that a diamond big enough to keep her dry when it rains will likely cost a lot more than roof big enough to keep her dry when it rains...

    25Reply
  • Devin JamesPro Member
    OP
    Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes
    7y

    @Chris Mason Thank you for your response!

    [email protected]
    2Reply
  • Scott TrenchPro Member
    Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
    7y

    Whoa this is awesome! Congrats - Football scholarship, planning on graduating at 20-21 years old, (it appears graduating early!), long-term relationship with what sounds like a wonderful woman, you are crushing it at 19 years old sir. 

    Have you politely inquired about what her ideal ring looks like? Like @Chris Mason mentions, her best friend might know exactly what she wants (hint) and help steer you clear of making the wrong purchase. Or she might just tell you directly. With that knowledge in mind, you'll have more information about whether it's within your means to get her what she wants in the near future. It's possible that what she wants is priced such that you can get something nice AND not significantly delay your first or next house hack. 

    That aside, I'd say picking your life partner and making sure they are happy is orders of magnitude more important than investing in your first property.

    Podcast Guest on Show #223
    BiggerPockets
    16Reply
  • Devin JamesPro Member
    OP
    Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes
    7y

    @Scott Trench Thank you so much! and the ring she wants costs roughly $5,000. I am speaking with her best friend right now. Also, I am a HUGE fan of yours, I just finished Set For Life and I loved it! It added a huge amount of value to me!

    [email protected]
    9Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y

    @Devin James alright so the good news is you’re killing it in several ways, as others have said:

    1. Good relationship

    2. No student debt

    3. Graduating early (wish I’d have done that, and I was 21! (Almost 22).

    Here’s the things I’d advise doing differently/not doing right now:

    1. I wouldn’t househack during law school. Focus on school, not real estate. Real estate will be there when you’re done.

    2. If you pay 5k for a diamond ring, make sure it’s cash, not financed. I understand the obvious importance of this ring, and the act of buying it. That being said, diamond rings are some of the most overpriced things a consumer buys. Believe it or not, diamonds are not rare. The supply is artificially shortened by the one company that controls most of the worlds diamond supply. I would recommend buying an economical ring and consider non-diamonds. The minute you pay 5k for a ring, it’ll immediately be worth a small fraction of that.

    PS diamond rings have only been a thing since the 1930s. Before that, it wasn’t a thing. One of the 20th centuries greatest marketing ploys.

    Good luck, and keep killing it!!

    7Reply
  • Robert C.
    Investor · San Francisco, CA · Member since 2016 · 338 posts · 444 votes
    7y

    @Devin James, I've got no real input on the engagement ring, cause I think that's a super personal decision. I mean, how do we know what your future wife will think if the internet convinces you to tell her "hey I was gonna get you this perfect ring, but I thought saving for an investment property would be better...". There's no way for anyone in these forums to know how that will go over!

    I will say, I think you should keep doing what your doing as far as minimizing (or eliminating) any law school debt. Lawyers are part of a troubled industry right now, so you have to be a top notch graduate to make any debt worthwhile. You're young, so whether you buy your first investment property during law school, or a couple years after when your earnings have increased, I doubt it will make much difference. Anyone who starts investing wisely in their 20's or even early 30's will be way ahead of the game compared to most folks. 

    2Reply
  • Devin JamesPro Member
    OP
    Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes
    7y

    @Caleb Heimsoth @Caleb Heimsoth Thank you for your input! I just feel like I have to jump in as soon as I can. But your right that real estate will always be here, I will definitely take that into consideration

    [email protected]
    1Reply
  • Devin JamesPro Member
    OP
    Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes
    7y

    @Robert C. @Robert C. Thank you! I will focus on keeping my debt as low as I can! I understand that as long as I start early in my 20’s that it wouldn’t make much difference. Great advice!

    [email protected]
    0Reply
  • Anthony Wick
    Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
    7y

    @Devin James

    I honestly can’t think of a bigger waste of $5k than a ring. Picking your life partner is the single biggest decision you can make. If your goals are not the same, it will either fail or you will be miserable.

    I have 3 daughters. They have been told do not expect your partner to buy you a big ring, or to support you financially.

    100% you buy that investment property, after a long talk with your gf about what you both want out of life. That being said, a modest ring that you both agree to and both agree on the expense is good. But hey, you’re 19. Finances, careers, kids. All need to be talked about prior to marriage. Take your time on this huge life decision.

    17Reply
  • Devin JamesPro Member
    OP
    Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes
    7y

    @Anthony Wick Thank you! Definitely something that we will talk about!

    [email protected]
    0Reply
  • Storm S.
    Real Estate Agent · Santa Barbara, CA · Member since 2016 · 518 posts · 283 votes
    7y

    @Devin James get the house, you can always buy the ring later.

    3Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    7y

    Forget the house, forget the ring, get some strange. Good God, even the Amish get Rumspringa.

    5Reply
  • Frank Jiang
    Investor · San Diego, CA · Member since 2014 · 592 posts · 765 votes
    7y

    Forget the ring.  Buy the house, put her on the deed so that she gets an appreciating asset.  You can even get one of those lab-made diamonds with the deed to the house engraved into it.  That's romance right there.

    7Reply
  • Devin JamesPro Member
    OP
    Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes
    7y

    @Frank Jiang Clever, I like it lol

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    0Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    7y

    @Devin James granted I’m only a few years older than you, and I definitely don’t know it all, but here are 3 pieces of life advice from a very successful investor I know.

    If you want to become well-off In life financially, do 3 things:

    1. If you get married, stay married.

    2. Stay out of prison

    3. Invest early and often. Compounding interest is the 8th wonder of the world.

    1 and 2 are pretty easy, but you want to be smart about it! Good luck

    3Reply
  • Devin JamesPro Member
    OP
    Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes
    7y

    @Caleb Heimsoth Thank you!

    [email protected]
    1Reply
  • Natalie Schanne
    Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    @Devin James - my husband bought me a $6000 ring from bluenile. I got to pick the diamond, setting, etc. and it was my dream ring. After one year and one kid, it’s sitting in the dresser drawer unworn because platinum is harder than gold to resize and I didn’t want to mess up the ring. I bought a $30 sterling silver and cubic zirconia ring off AliExpress (they make them in “2 carat” sizes, etc.) I can’t tell the difference. Maybe it’s a little less sparkly but most of the sparkle comes from multidirectional lighting like they have in jewelry cases. Also think about if she does stuff with her hands, the ring snagged clothing while I was working in my store, so I stopped wearing it. I wear my wedding band every day though. Obviously she’ll want a nice looking ring - real diamond or “fake diamond”. It’s amazing how much status women give each other for their rings.

    9Reply
  • Ronald UrrutiaPro Member
    Westford, MA · Member since 2017 · 1 post · 5 votes
    7y

    @Devin James I believe the best person to respond that, is you, according to your priorities, but I believe I liked more responses from Josh, Frank and Natalie (probably I'm more aligned with them on the romantic side of decisions).

    So, not giving advice, just sharing you my experience... When I was in that moment, I bought a $200 ring, and a condo for her (I mean, put the down payment and close the deal). We still own that condo rented, and no plans to sell it until our daughters go to college.

    Yes, I was crazy about her (and I still am), I bought the ring after our second date and we got married 2 weeks later.

    If I could return in time and make something different, the only single thing I would change, is instead of buying a condo, I would by a duplex or any other property I could house hack, other than that, I would do the same.

    Some years later I asked my wife if she wanted another ring to replace the one she has, and she told me "why don't we better invest that money?"

    5Reply
  • Devin JamesPro Member
    OP
    Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes
    7y

    @Natalie Schanne Interesting , Thank you for your input!

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    0Reply
  • Devin JamesPro Member
    OP
    Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes
    7y

    @Ronald Urrutia Your right! Im going to find a way to get both done, thank you!

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    0Reply
  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    7y

    Cubic zirconia is the way to go.

    Podcast Guest on Show #29
    2Reply
  • Jeremy Blevins
    Folsom, CA · Member since 2018 · 134 posts · 100 votes
    7y

    @Devin James it doesn’t sound like there is any rush to get married.. I’d talk to your partner about the fact that you’d like to purchase a house. If she is excited about that and on board then why not wait a year to get married, especially since it really doesn’t change much! My wife and I got a few thousand from her dad back when we were engaged to use for the wedding or whatever we chose. We talked amongst ourselves and to her dad and decided we would use the money to buy our first home because that was more important to us than getting married sooner. Because we used that money on a home Instead of rushing to get married we set ourselves up in life a little bit better. What if you buy a duplex or something you can house hack while in college therefore decreasing your living expenses and allowing you to save more for the ring? Not only that I’m

    a huge advocate of living with someone before your married! My advice, buy the house first! Good luck

    2Reply
  • Devin JamesPro Member
    OP
    Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes
    7y

    @Jeremy Blevins Thank you for the advice!

    [email protected]
    0Reply
  • Victor S.
    WorldWide · Member since 2016 · 1k+ posts · 1k+ votes
    7y

    19? marriage? wha? how about you both read a brief history of how diamonds have infiltrated the minds and the hearts of our populace instead:

    https://www.theatlantic.com/international/archive/...

    you might as well buy her a cz and if she does go to a jeweler, you can pull a "you've failed my trust test" line on her. you can always buy her a very expensive piece of glass later in life when you have all the fu money you need.

    1Reply
  • Mark SeverinoPro Member
    Rental Property Investor · Dallas, Texas (TX) · Member since 2014 · 79 posts · 25 votes
    7y

    Hey @Devin James congrats on all the success so far! You seem like a great guy and have your head on straight. Like others have said, this is more relationship advice vs REI advice but I'd like to present my 2 cents, please take with a grain of salt.

    I too was very much ready to marry the girl I was with when I was 19 years old. I was deeply in love and set on our future together. Long story short we were not compatible for the long term (despite 3+ years of trying). However, you could never have convinced me of that when I was younger. I didn't have experience in dating. I honestly didn't even know what I truly wanted/needed in a lifelong partner. 

    I'm in my early 30s now and when I look back at my decision I have regrets. My regret is not jumping into REI harder and faster, taking risks at an earlier age. I do NOT regret holding off on marriage.

    I have a very serious significant other now and we are putting off marriage to continue investing in real estate and secure our future. That is more important than anything. I dare say a strong financial foundation helps remove the money problem which is a huge relationship pot hole, best avoided. 

    I agree with @Jeremy Blevins. Marriage isn't going anywhere. You won't lose someone because you aren't getting married to them right now. If you really want to spend the rest of your lives together marriage can wait. I'd recommend you use your time now to invest in REI or yourself with school.

    Best of luck to you sir. Wishing you the best! Feel free to reach out. 

    2Reply
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