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Always pay cash 😁

bonesfab

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I guess I’m trying to figure out where the idea of financing something means “you can’t afford it” came from.

Don’t get me wrong I respect and enjoy being able throwing down cash.

Perfect example. I bought our dump trailer for 10ish OTD cut one check for it. Today that trailer is running 13-14k. Not to mention its made us double that in billables. Large regret on my part but goddamit dad said pay cash when I was 10 so I better do it lol. And when my dad was running the shop he’d probably finance it.

Just funny how you get programmed one way and then have to take a step back once in a while.
In my world, i would have leased it through the business and write it off. Save the cash for stupid shit ?
 

hallett21

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In my world, i would have leased it through the business and write it off. Save the cash for stupid shit ?
Totally should have. Lol what’s the payment on 10k for 60 months? Even at 5%?

Live and learn. I didn’t pay any interest, but I tied up money I didn’t have to.

Flip side is United wants $1,500 a month today. Back then it was $1,000. Either way it paid off way too fast to pay cash.


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Melloyellovector

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For me toys are paid cash.
Houses and primary vehicles finance
I don’t like owing anyone anything.
I do like people owing me. (well when they owe and pay ) lol

If a toy is financed and it’s with in your means then so be it. Some of my guys have financed rzrs, boat loans, etc... Couple could easily pay off in full but they like to see money in their accounts versus a pink slip. I think they feel if shit hit the fan they could sell toys and at min walk from loan. Or let them get repo and they still have their cash. Idk
 

RiverDave

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For me toys are paid cash.
Houses and primary vehicles finance
I don’t like owing anyone anything.
I do like people owing me. (well when they owe and pay ) lol

If a toy is financed and it’s with in your means then so be it. Some of my guys have financed rzrs, boat loans, etc... Couple could easily pay off in full but they like to see money in their accounts versus a pink slip. I think they feel if shit hit the fan they could sell toys and at min walk from loan. Or let them get repo and they still have their cash. Idk
Payments are a tax write off depending on the item etc
 

Melloyellovector

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Payments are a tax write off depending on the item etc
Well ya when you own a toon that you need to take customers out on to show properties or sell the havasu life style. Lol
Its crazy how many pool contracts want to meet in havasu and go on boat and get to know me, before they’ll sign. Like every other trip. 😂
 

2FORCEFULL

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Well ya when you own a toon that you need to take customers out on to show properties or sell the havasu life style. Lol
Its crazy how many pool contracts want to meet in havasu and go on boat and get to know me, before they’ll sign. Like every other trip. 😂
you do pools in havasu?
 

2FORCEFULL

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For me toys are paid cash.
Houses and primary vehicles finance
I don’t like owing anyone anything.
I do like people owing me. (well when they owe and pay ) lol

If a toy is financed and it’s with in your means then so be it. Some of my guys have financed rzrs, boat loans, etc... Couple could easily pay off in full but they like to see money in their accounts versus a pink slip. I think they feel if shit hit the fan they could sell toys and at min walk from loan. Or let them get repo and they still have their cash. Idk
for me,.... I loose interest in stuff way before they quit charging me interest.....LOL
 

2FORCEFULL

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my son took money out of his savings to buy a rv,... first he was going to finance it and payment was around 800,.. he said they could make it no sweat.... to me it was a no brainer... the interst they were charging was around 5 %, bank was giving .05% on the saving... I said pay for it, and make the payment back to the savings, and don't buy nothing else till you pay back the savings account........so far , thats what he has been doing,.. we'll see....
 

J&k x-flight

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We finance when it makes sense..
Paying interest does not bother us. It's part of the deal.
If your not comfortable financing them don't do it..
We say you can't take it with when you die.. so spend and enjoy it now..
 

clarence

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You ever notice that people are perfectly fine talking about different forms of debt, but strangely uncomfortable talking about money and what to do with it?
To combine the two: how many have both debt/mortgage and a bond allocation?
 

ArizonaKevin

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You ever notice that people are perfectly fine talking about different forms of debt, but strangely uncomfortable talking about money and what to do with it?
I'll raise my hand and say I have no clue what to do with my money. In the last 18 months the joint household income has more than doubled, and we are pacing to double again in the next 12.

As of right now we have a solid chunk in the bank (some say too much) that we don't know what to do with. Own both cars and the XX free and clear, put 30k down on the 50k motorhome that is now worth 60ish, and have a mortgage on the house.

Everyone says the smart move is to role that money we have into investments of some sorts. I don't doubt that's the smart thing to do, but those of us enamored by toys aren't always known for making the smart decisions.

In the near future I'd like to get a boat of my own (currently borrow my dad's or father in law's) and a lake house with a garage to store it. Also will need to get a new car for my wife soon as we are planning on starting a family in 2022.

I think @hallett21 and I are similar in age, and this is definitely not the shit they taught us in school.
 

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I'll raise my hand and say I have no clue what to do with my money. In the last 18 months the joint household income has more than doubled, and we are pacing to double again in the next 12.

As of right now we have a solid chunk in the bank (some say too much) that we don't know what to do with. Own both cars and the XX free and clear, put 30k down on the 50k motorhome that is now worth 60ish, and have a mortgage on the house.

Everyone says the smart move is to role that money we have into investments of some sorts. I don't doubt that's the smart thing to do, but those of us enamored by toys aren't always known for making the smart decisions.

In the near future I'd like to get a boat of my own (currently borrow my dad's or father in law's) and a lake house with a garage to store it. Also will need to get a new car for my wife soon as we are planning on starting a family in 2022.

I think @hallett21 and I are similar in age, and this is definitely not the shit they taught us in school.
I'm probably close in age to you guys. Born in 89. I'm trying to figure out how to get a cheap house in a nice neighborhood and turn my current house into a rental. Even though I did buy a boat in December for a decent price I usually buy toys when they are on sale... During a slow economy or when someone just needs to move something and the price is low.
I do agree with you on the school stuff. It would've been nice if they set us up better for being an adult.
 
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2FORCEFULL

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here's a life lesson I got taught... I was working constuction,.. had to go in for surgery.. still pretty young in my thirty's, construction was all I knew,.. union carpenter... in the recovery room the surgen came in to see me... he through a news paper on the bed,.. and said this, " look in there and try to find some thing new to do, you are permanent parcel disabled and will never return to the construction job.... fuc, what do I do now....wife worked and we had 2 kids...every thing but the home was paid for...and no credit card debt... but what a shocker.... thought I was good to go the full mile...I made it,.. we survived...God opened doors for me that I never would have even tried to open.. being strapped with payment would have really sucked... probley would have been talking to repo guys... something like sorry, something happen out of my controll so I won't be paying.... ah,... but you were in full control when you signed to buy all this stuff?
 

2FORCEFULL

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I'll raise my hand and say I have no clue what to do with my money. In the last 18 months the joint household income has more than doubled, and we are pacing to double again in the next 12.

As of right now we have a solid chunk in the bank (some say too much) that we don't know what to do with. Own both cars and the XX free and clear, put 30k down on the 50k motorhome that is now worth 60ish, and have a mortgage on the house.

Everyone says the smart move is to role that money we have into investments of some sorts. I don't doubt that's the smart thing to do, but those of us enamored by toys aren't always known for making the smart decisions.

In the near future I'd like to get a boat of my own (currently borrow my dad's or father in law's) and a lake house with a garage to store it. Also will need to get a new car for my wife soon as we are planning on starting a family in 2022.

I think @hallett21 and I are similar in age, and this is definitely not the shit they taught us in school.
what to do with money right now is a real head scratcher.. lets say you have a mil... most say buy RE... but lets say you don't and sit on it... this could happen... RE continues to go up ... now it cost you a mil.3 to buy the same property, so inflation ate 30%

but.... this could also happen.... lets say the RE market takes a dump..... now your mil will buy the same property for only 700k , so a 30% increase in dollar value... same with the stock market...... the people who already have the stocks are making out right now,... that and the savy investers..... personally,.. I have no clue,.. but don't think it's good to buy any thing right now.......so what to do.... I'll be bald by june from the head scratching....
 

Motor Boater

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I'll raise my hand and say I have no clue what to do with my money. In the last 18 months the joint household income has more than doubled, and we are pacing to double again in the next 12.

As of right now we have a solid chunk in the bank (some say too much) that we don't know what to do with. Own both cars and the XX free and clear, put 30k down on the 50k motorhome that is now worth 60ish, and have a mortgage on the house.

Everyone says the smart move is to role that money we have into investments of some sorts. I don't doubt that's the smart thing to do, but those of us enamored by toys aren't always known for making the smart decisions.

In the near future I'd like to get a boat of my own (currently borrow my dad's or father in law's) and a lake house with a garage to store it. Also will need to get a new car for my wife soon as we are planning on starting a family in 2022.

I think @hallett21 and I are similar in age, and this is definitely not the shit they taught us in school.
Start making extra payments in your house and work towards paying it off. Go on you tube and listen to Dave Ramsey.
 

ArizonaKevin

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Start making extra payments in your house and work towards paying it off. Go on you tube and listen to Dave Ramsey.
Ehh, I don't fully drink his coolaid. If I liquidated everything and had his recommended $1,000 emergency fund I could pay off the house, but I would be terrified that something more than a 1k problem would come up.

I think there's a happy medium that could be had between his rigorousness and being reckless (buying a boat with HELOC for example)

I fully accept that I won't be able to retire as quickly as someone who was more rigorous, but that's a price I'm willing to pay to make memories with my family. You never know when your number is going to get called.
 

RCDave

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Ehh, I don't fully drink his coolaid. If I liquidated everything and had his recommended $1,000 emergency fund I could pay off the house, but I would be terrified that something more than a 1k problem would come up.

I think there's a happy medium that could be had between his rigorousness and being reckless (buying a boat with HELOC for example)

I fully accept that I won't be able to retire as quickly as someone who was more rigorous, but that's a price I'm willing to pay to make memories with my family. You never know when your number is going to get called.
He doesnt advocate that. From what debt perspective he just advises to only finance a house and at a conservative loan to income percentage and over 15 years.
 

ArizonaKevin

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He doesnt advocate that. From what debt perspective he just advises to only finance a house and at a conservative loan to income percentage and over 15 years.
So he is firmly in the always pay cash crowd.

At this point in my life, I think a happy medium is to have the savings to be able to pay cash for something before buying it, but don't be afraid of debt if it makes sense for the situation.

I could easily pay off the RV right now, but can comfortably make the payment, have a reasonable rate, and would rather have that money to do other things with.

Again, from a purely financial perspective, this is probably a bad decision. But life is about more than purely financial decisions. After all, none of us here drive Nissan versas.
 

nowski

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here's a life lesson I got taught... I was working constuction,.. had to go in for surgery.. still pretty young in my thirty's, construction was all I knew,.. union carpenter... in the recovery room the surgen came in to see me... he through a news paper on the bed,.. and said this, " look in there and try to find some thing new to do, you are permanent parcel disabled and will never return to the construction job.... fuc, what do I do now....wife worked and we had 2 kids...every thing but the home was paid for...and no credit card debt... but what a shocker.... thought I was good to go the full mile...I made it,.. we survived...God opened doors for me that I never would have even tried to open.. being strapped with payment would have really sucked... probley would have been talking to repo guys... something like sorry, something happen out of my controll so I won't be paying.... ah,... but you were in full control when you signed to buy all this stuff?
Great bit of advice!!!

One thing that people don't understand is rainy days can show up our your doorstep at anyplace, anytime and in many forms. How one reacts to life's curveballs defines who you are being prepared for the unknown is paramount...
 

WYRD

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Ehh, I don't fully drink his coolaid. If I liquidated everything and had his recommended $1,000 emergency fund I could pay off the house, but I would be terrified that something more than a 1k problem would come up.

I think there's a happy medium that could be had between his rigorousness and being reckless (buying a boat with HELOC for example)

I fully accept that I won't be able to retire as quickly as someone who was more rigorous, but that's a price I'm willing to pay to make memories with my family. You never know when your number is going to get called.
I'm not a Ramsey fanboy but he does have some good teachings for those that are straddled with debt. For your situation if you don't have any debt other than the house the plan would be to keep 6-12 months expenses in a easily accessible account like savings, money market, treasury, cd, Etc then put 15% of your income into retirement Investments and another 5% towards kids college fund. If there's any money left after that then start hitting the house payment hard. We're pushing like hell on that last step and I hope to accomplish it sometime next year. Again, I don't Preach or follow his teachings verbatim just try to be a good steward with our family finances and not get caught with our pants down if and when the tide goes out.
 

Ace in the Hole

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In today’s climate if you were going to buy a 100k boat/toy/whatever in cash. It seems to me you would be better financially to finance it.
I may get a little off topic but its relative to the discussion...

Last year when oil dropped, I saw A LOT of roll bar boats pop up here in texas...people owed more than they were worth..asking payoff, payment takeovers etc. We're talking 100-125k balances with payments $1-2k a month that were upside down. Guys who were making 150-300 and were spending every cent hit a brick wall. The boat market here in TX is nowhere near as hot as it is in AZ/CA. The problem many people have is they will finance it thinking what you said, yet instead of keeping that money saved/invested they spend it on other things..campers, toys, vehicles or whatever. Self discipline when it comes to finances isn't always easy.. Boat/RV loans are more expensive interest wise than vehicle and home loans (yes I know some people refi their house to buy boats which I would never do).

I'm am just a few years older than you. Got into trouble once being over leveraged when business tanked and I've never wanted to be in that position again.. The only debts I have are a low interest student loan, our house in TX and my wife's car (we took the 1.9% interest to build her credit history). All of which could be paid off tomorrow if needed. Everything else is paid for...the boat, seadoo, the truck etc. I do not like carrying PERSONAL debt, nor the stress that comes with carrying a lot of it. BUSINESS debt is much different...I'd rather make money using other people's money.

I see a lot of credit reports in our field (essentially every customer that applies for credit through us crosses my desk). The debt loads on young people are ticking up quickly again... I really don't like to see DTI over certain amounts...but the lenders are buying it again and I see it going south at some point. I've seen some super leveraged people lately...with erratic payroll history due to the events of the last year and the assault on the oil industry by the mumbler in chief especially. TX is the only place I've ever seen people finance literally everything you can think of...mattresses, furniture, tires, lawnmowers you name it..its crazy to see all these small installment loans on people that add up really quickly on top of two 60k+ car loans, a boat loan, an camper loan, house etc etc. I was raised to pay cash, and only finance things that make you money and your house so this just baffles me.

I'm a firm believer in financing if you can make the cash work for you and get a better return...I'm also a firm believer in being able to cover yourself if the shit hits the fan. There is good debt...and there is bad debt...but not all debt is bad. Side note...Dave Ramsey is a dumbfuck, Grant Cardone has a much better outlook/lesson on money..

Another thing to consider is SALES TAX...if you are paying cash for certain things (vehicles/boats), you can avoid thousands of dollars in government extortion by using certain strategies that many of us use. Hard to do that when you have a bank involved. That 6-9% needs to factor into that decision.

 
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WYRD

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what to do with money right now is a real head scratcher.. lets say you have a mil... most say buy RE... but lets say you don't and sit on it... this could happen... RE continues to go up ... now it cost you a mil.3 to buy the same property, so inflation ate 30%

but.... this could also happen.... lets say the RE market takes a dump..... now your mil will buy the same property for only 700k , so a 30% increase in dollar value... same with the stock market...... the people who already have the stocks are making out right now,... that and the savy investers..... personally,.. I have no clue,.. but don't think it's good to buy any thing right now.......so what to do.... I'll be bald by june from the head scratching....
This is our situation as well have a very high quick ratio and not sure where to park investment funds🤷‍♂️
 

Flatsix66

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I'm impressed that at your age you both are doing so well and thinking about the future! I wish I was both in your position and as smart as you when I was your age. If you have some money laying around think of this. Invest $20k now in a low cost broad market index fund, at $10k per year - when you hit 60 you will have $15M (7% compounded for 33 years). Try to do this tax free, Roth IRA, Roth 401 or ..

What always stops me from financing toys is looking at the total cost when interest is added in. $100k boat would be $165K boat at the end of the loan, and probably will depreciate by the end of the loan. Also finance payments eventually put pressure on your cash flow which prevents you from buying more shit, on the flip side if you pay cash with saved money your free to buy more shit as soon as you have more dough saved...a much more satisfying cycle in my mind.
 

WYRD

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I may get a little off topic but its relative to the discussion...

Last year when oil dropped, I saw A LOT of roll bar boats pop up here in texas...people owed more than they were worth..asking payoff, payment takeovers etc. We're talking 100-125k balances with payments $1-2k a month that were upside down. Guys who were making 150-300 and were spending every cent hit a brick wall. The boat market here in TX is nowhere near as hot as it is in AZ/CA. The problem many people have is they will finance it thinking what you said, yet instead of keeping that money saved/invested they spend it on other things..campers, toys, vehicles or whatever. Self discipline when it comes to finances isn't always easy.. Boat/RV loans are more expensive interest wise than vehicle and home loans (yes I know some people refi their house to buy boats which I would never do).

I'm am just a few years older than you. Got into trouble once being over leveraged when business tanked and I've never wanted to be in that position again.. The only debts I have are a low interest student loan, our house in TX and my wife's car (we took the 1.9% interest to build her credit history). All of which could be paid off tomorrow if needed. Everything else is paid for...the boat, seadoo, the truck etc. I do not like carrying PERSONAL debt, nor the stress that comes with carrying a lot of it. BUSINESS debt is much different...I'd rather make money using other people's money.

I see a lot of credit reports in our field (essentially every customer that applies for credit through us crosses my desk). The debt loads on young people are ticking up quickly again... I really don't like to see DTI over certain amounts...but the lenders are buying it again and I see it going south at some point. I've seen some super leveraged people lately...with erratic payroll history due to the events of the last year and the assault on the oil industry by the mumbler in chief especially. TX is the only place I've ever seen people finance literally everything you can think of...mattresses, furniture, tires, lawnmowers you name it..its crazy to see all these small installment loans on people that add up really quickly on top of two 60k+ car loans, a boat loan, an camper loan, house etc etc. I was raised to pay cash, and only finance things that make you money and your house so this just baffles me.

I'm a firm believer in financing if you can make the cash work for you and get a better return...I'm also a firm believer in being able to cover yourself if the shit hits the fan. There is good debt...and there is bad debt...but not all debt is bad. Side note...Dave Ramsey is a dumbfuck, Grant Cardone has a much better outlook/lesson on money..

Another thing to consider is SALES TAX...if you are paying cash for certain things (vehicles/boats), you can avoid thousands of dollars in government extortion by using certain strategies that many of us use. Hard to do that when you have a bank involved. That 6-9% needs to factor into that decision.

I watched the video and I think this guy is very interesting I will do some more research on him but I do think him and Ramsey are on two different wavelengths and dealing with completely different Target audiences. Ramsey teaches people how not to spend their money and go broke while it seems Cardone is teaching people to be investors once they've mastered the art of not spending their money to the point of being broke
 

HB2Havasu

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I try to live my financial life somewhat by the saying that Dave Ramsey uses often. “You can live fake rich now, and real poor later”

If your buying a depreciating asset and then paying somebody interest on top of that for said depreciating asset it might not be the greatest investment strategy! Sounds like a Bankruptcy Starter Kit to me, lol. Listen to what your Mom & Dad taught you. They may be right?
 

Waterjunky

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As some on here are talking about, I am a firm believer in the middle road. I am not at all stretched to pay for everything. I could pay off all the non-mortgage loans by tapping savings. On the other hand, my savings are making good money and the loan interest is cheap at about 1/3 of investment. I was very happy a year ago when I had no loan other than the house and duplex. I now have a truck payment and an RV payment. I don't owe anything on the MC's the other vehicles, the boat, and credit cards.

I am a firm believer to pay your primary house off and don't mess with it. In my case, the duplex is a business and with cheap money running around....... My plan is to keep the toys reasonable and able to be paid off in a pinch. The other option is to carefully plan the toys to have a significant down so you can dump them if needed and they move in any market, good or bad. Again, middle road.
I am also a firm believer in not having to have the latest and greatest. I could easily finance a brand new 25' custom boat. I have almost as much fun as that person in my old dock banger that is paid for. is this a forever boat? NO! I am actually looking to sell it this spring because it is worth significantly more than I paid for it 5 years ago. I will be upgrading boats in the near future. Selling now with a high market and expecting the market to drop in the next year or so and planning a reentry then into a nicer, newer, faster boat.

Its about using credit responsibly and being well aware of how deep the pool gets. Too many people thing that if they can get the loan, it must be OK. Well, my dog could get a loan right now and there are people that have worse credit than him testing the depth of the pool. Use the pool, enjoy, just don't get in over your head.
 

hallett21

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I try to live my financial life somewhat by the saying that Dave Ramsey uses often. “You can live fake rich now, and real poor later”

If your buying a depreciating asset and then paying somebody interest on top of that for said depreciating asset it might not be the greatest investment strategy! Sounds like a Bankruptcy Starter Kit to me, lol. Listen to what your Mom & Dad taught you. They may be right?
I didn’t mean to come off as if I know better than anyone else. I was just curious if the sentiment of paying cash has changed with the way interest rates have.

My parents had a loan at something like 14% for a home in the 80s. That’s insane that I have better rates on a credit card than they did a mortgage lol.

I was thinking more along the lines if you already saved the 100k. Are you better off cutting one check? Or let the bank own the boat and you grow the 100k?

People who are leveraged with deprecating assets while paying interest are destined to fail. Living outside your means never works for long.





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BHC Vic

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Cash is great
In 2017, I bought a used Maserati, financed at 1.9%, at the time I didn’t know whether I’d be alive to pay it off due to health issues. I could have sold my Amazon stock and paid cash. With that same Amazon investment, I bought a place in Vegas in 2019, no mortgage, borrowed a portion from credit lines. That same Amazon stock today is worth more than I spent for both the car and the real estate and the improvements. So, I still owe some money, but the net is way higher. The stock was my fallback, but I never touched it.
They say this is the issue with crypto. Although places are starting to accept it as payment, why would you. Bitcoin and Tesla for example. Bitcoin will go up in value but the Tesla will go down in value. Why would you use Bitcoin which appreciates to buy a Tesla that depreciates. It’s something to think about. When I bought my volt it was 5k. I could have paid cash bu in instead I invested 5k and settled for a 100 dollar a month payment for a few years. If the 5k turns into 10k that’s a huge win
 

BHC Vic

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I'll raise my hand and say I have no clue what to do with my money. In the last 18 months the joint household income has more than doubled, and we are pacing to double again in the next 12.

As of right now we have a solid chunk in the bank (some say too much) that we don't know what to do with. Own both cars and the XX free and clear, put 30k down on the 50k motorhome that is now worth 60ish, and have a mortgage on the house.

Everyone says the smart move is to role that money we have into investments of some sorts. I don't doubt that's the smart thing to do, but those of us enamored by toys aren't always known for making the smart decisions.

In the near future I'd like to get a boat of my own (currently borrow my dad's or father in law's) and a lake house with a garage to store it. Also will need to get a new car for my wife soon as we are planning on starting a family in 2022.

I think @hallett21 and I are similar in age, and this is definitely not the shit they taught us in school.
There’s a lot to be learned here. I’m 33 and in a decent spot. Mostly due to advice I get here. Yes I have to filter through some bullshit but there’s some really smart people here who have really helped me and honestly want to see me be successful
 

WYRD

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They say this is the issue with crypto. Although places are starting to accept it as payment, why would you. Bitcoin and Tesla for example. Bitcoin will go up in value but the Tesla will go down in value. Why would you use Bitcoin which appreciates to buy a Tesla that depreciates. It’s something to think about. When I bought my volt it was 5k. I could have paid cash bu in instead I invested 5k and settled for a 100 dollar a month payment for a few years. If the 5k turns into 10k that’s a huge win
See this is where everybody keeps getting confused. Nobody's saying do one or the other you can do both if you can afford it. Then you could have taken that $5,000 and pay cash for the car and invested $100 a month into stocks for a few years and you would be ahead because you're buying an appreciating investment(hopefully) not financing a depreciating asset.
 

2FORCEFULL

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Financed my shockwave extremely high credit score low payment just sold it for $6000 more than I paid for it new. This is nine years of use.
thats like getting hit by lightning.... someting I would never invest in thinking that would happen.... the norm was you would loose 10k or more towing it off the lot.... but at the same time..... how much would it cost to replace the same boat new right now...
 

2FORCEFULL

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As some on here are talking about, I am a firm believer in the middle road. I am not at all stretched to pay for everything. I could pay off all the non-mortgage loans by tapping savings. On the other hand, my savings are making good money and the loan interest is cheap at about 1/3 of investment. I was very happy a year ago when I had no loan other than the house and duplex. I now have a truck payment and an RV payment. I don't owe anything on the MC's the other vehicles, the boat, and credit cards.

I am a firm believer to pay your primary house off and don't mess with it. In my case, the duplex is a business and with cheap money running around....... My plan is to keep the toys reasonable and able to be paid off in a pinch. The other option is to carefully plan the toys to have a significant down so you can dump them if needed and they move in any market, good or bad. Again, middle road.
I am also a firm believer in not having to have the latest and greatest. I could easily finance a brand new 25' custom boat. I have almost as much fun as that person in my old dock banger that is paid for. is this a forever boat? NO! I am actually looking to sell it this spring because it is worth significantly more than I paid for it 5 years ago. I will be upgrading boats in the near future. Selling now with a high market and expecting the market to drop in the next year or so and planning a reentry then into a nicer, newer, faster boat.

Its about using credit responsibly and being well aware of how deep the pool gets. Too many people thing that if they can get the loan, it must be OK. Well, my dog could get a loan right now and there are people that have worse credit than him testing the depth of the pool. Use the pool, enjoy, just don't get in over your head.
so,.......savings interest is at .05%....inflation lie is 7%.. real world it's more like 30% how much and where do you have savings???
 

CobraDave

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That is where it goes sideways for me personally.... I can live with the $50k boat I’m 85% happy with and will invest the other $50k to eventually get a return. Fast forward a few years and I am now 100% happy with the $50k boat because it is now a free boat.

And now you know the story of why I have a V8 powered RX7 instead of a Corvette and a 23’ Cobra instead of a deck boat :)
Gotta save for the 50k Speed Car!


Sent from my iPhone using Tapatalk
 

Christopher Lucero

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as far as ancient history...up until Reagan's reforms (1986), consumer interest like loans on cars and credit cards was deductible. eventually because of those reforms those deductions were phased out. not being negative about it, just stating the fact.

so it used to be that financing was a much wider pool because of public policy. rates were pretty high then, too. I think I was paying around 14% to Sears Consumer Finance.

in that same vein, many other forms of tax deductibility have been a target for reform, especially mortgage interest and state / local taxes.

BUT, the world changes, and we have been in a low interest, low inflation fiscal regime for around 20 years...the end result is as many have said...pay cash unless your cash is better invested elsewhere (i.e. arbitrage the debt).

@RiverDave did not point out the advantage of having a head and galley and sleep area on board to get it into second home qualification for IRS mortgage deductibility...not sure of that is where you (the OP, not @RiverDave ) are heading, just pointing out the fact.

in the end, as some have said, you will build memories upon the payments that cannot be replaced once the opportunity has passed, so think carefully about how many 'smiles per hour' your boat will deliver now, and whenever you recall fond memories built while on board

best regards.
 
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BHC Vic

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See this is where everybody keeps getting confused. Nobody's saying do one or the other you can do both if you can afford it. Then you could have taken that $5,000 and pay cash for the car and invested $100 a month into stocks for a few years and you would be ahead because you're buying an appreciating investment(hopefully) not financing a depreciating asset.
With a 100 dollar payment I’m still able to put about 300-500 a week into the market. The 5000 has made more than the 100 monthly could have, But I see what you’re saying for sure. Lots of angles to look at and ways to play it. That’s why I love this place. Always giving me something to think about and ways to improve the ways I think about things.
 

2FORCEFULL

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as far as ancient history...up until Reagan's reforms (1986), consumer interest like loans on cars and credit cards was deductible. eventually because of those reforms those deductions were phased out. not being negative about it, just stating the fact.

so it used to be that financing was a much wider pool because of public policy. rates were pretty high then, too. I think I was paying around 14% to Sears Consumer Finance.

in that same vein, many other forms of tax deductibility have been a target for reform, especially mortgage interest and state / local taxes.

BUT, the world changes, and we have been in a low interest, low inflation fiscal regime for around 20 years...the end result is as many have said...pay cash unless your cash is better invested elsewhere (i.e. arbitrage the debt).

@RiverDave did not point out the advantage of having a head and galley and sleep area on board to get it into second home qualification for IRS mortgage deductibility...not sure of that is where you are heading, just pointing out the fact.

in the end, as some have said, you will build memories upon the payments that cannot be replaced once the opportunity has passed, so think carefully about how many 'smiles per hour' your boat will deliver now, and whenever you recall fond memories built while on board

best regards.
pretty sure dave is buying the boat as a tool for one or both of his business's , wright a check out of the business for the payment, less profit to pay tax on at the end of the year...
 

AZmike

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I got similar lessons from my parents. They where born in 45/48. I've modified my behavior a little bit from theirs's but its pretty much the same. My parents have talked about the ridiculous interest rates for homes and cars in their time. Its nothing like what we have available now. Me personally everything is cash except homes and the wife's car because of the tax write off.
 

zhandfull

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I watched the video and I think this guy is very interesting I will do some more research on him but I do think him and Ramsey are on two different wavelengths and dealing with completely different Target audiences. Ramsey teaches people how not to spend their money and go broke while it seems Cardone is teaching people to be investors once they've mastered the art of not spending their money to the point of being broke
Careful investing with Grant Cardone. A little online research would lead some to believe Grants company makes great returns while his investors are saddled with fees.
 

Hypnautic

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Here’s my .02
I read through about 70-80% of the posts.

I make sure to pay myself first.
That is maxing out your 401k ($19.5/yr) and your IRA ($6/yr).
Next minimum 10-15% of your paycheck to your savings.
Introduce your expected monthly payments into your budget before buying—before buying my Daughters car I started making $500 car payment to myself. Car search was about 5-6 months so there was extra down payment and my budget was accustomed to the payment. Now I could buy car with cash but financed it with her on loan to help build credit. I do pay $1000-1500 a month and will have the 60mo loan paid in full in 16 months.

Next continue to make the payments once the debt is gone— wife’s Jag lease came due over a year ago. We did not need another car since I’m working from home so we went down to one car, but I kept making her cat payment but to myself. So that expense does not impact my budget when we do get another car and have extra down if I want.

Review your monthly expenses— Every 6ish months I look at my monthly costs like phone, cable, Internet etc and then I negotiate or eliminate those payments down. The money I save does not go back to me. I pay myself that money to.

I recommend a passive investment account such as Betterment to hold the funds you pay yourself. It will allow you to set “goals” that will auto deduct a specific amount on the times you select (ie. once a week or once a month every other week,etc). You can select the risk assessment made each “goal” you set. I am seeing a 22% up to 41% rate of return on my “goals” for the past 12 months. And 17% to 41% rate of return over the past 5 years I’ve had this account.
 
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badgas

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I'm not a Ramsey fanboy but he does have some good teachings for those that are straddled with debt. For your situation if you don't have any debt other than the house the plan would be to keep 6-12 months expenses in a easily accessible account like savings, money market, treasury, cd, Etc then put 15% of your income into retirement Investments and another 5% towards kids college fund. If there's any money left after that then start hitting the house payment hard. We're pushing like hell on that last step and I hope to accomplish it sometime next year. Again, I don't Preach or follow his teachings verbatim just try to be a good steward with our family finances and not get caught with our pants down if and when the tide goes out.

I am a Ramsey fan for one reason, and that is experience over opionion. We adopted his principles 11 years ago and they work for us. There are several other flavors out there for managing money but I can promise you that getting out of debt so you can invest in yourself rather that making banks rich will never be a bad plan. Stay the course on the last step you will not hate having a paid off home. Like Dave Ramsey always says "if you hate being debt free you can always go back into debt"

I do financial coaching and I have seen first hand how debt can destroy someones life. Everyone thinks they are all good and then 08 hits or Covid hits etc. I have seen many "Stable" and "Secure" jobs dissapear in an instant. Or someone like a construction guy gets hurt or sick and has to be off work for 9 months. When that hits having no debt, emergency savings and proper insurance is a great idea. That is what his plan teaches.

I don't subscribe 100% to his investing principles, I like to invest in low cost index funds that I manage.

My advice the OP would be don't finance your toys.
 
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