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Message
Pay off car or invest?
Posted on 1/15/19 at 10:01 am
Posted on 1/15/19 at 10:01 am
Currently have $23k left on a truck note @ 3%.
$10k left on the boat at 5%.
401k and roth deposits monthly are $1000.
If I paid off the truck and boat, I would have approx $3500 to put in savings each month or invest. I feel like this is a stupid question but would it be smarter to invest the roughly $35k or pay off the loans and really be able to contribute more monthly afterward.
Current monthly savings now with truck and boat ~$2000
After paying off truck, boat and kids out of daycare in july this increases to $3500 month.
Is it smarter just to keep paying the truck at 3% or pay it off?
$10k left on the boat at 5%.
401k and roth deposits monthly are $1000.
If I paid off the truck and boat, I would have approx $3500 to put in savings each month or invest. I feel like this is a stupid question but would it be smarter to invest the roughly $35k or pay off the loans and really be able to contribute more monthly afterward.
Current monthly savings now with truck and boat ~$2000
After paying off truck, boat and kids out of daycare in july this increases to $3500 month.
Is it smarter just to keep paying the truck at 3% or pay it off?
This post was edited on 1/15/19 at 11:17 am
9
Posted on 1/15/19 at 10:06 am to sonoma8
I'd pay off the boat (5%) and keep paying on the truck.
Posted on 1/15/19 at 10:14 am to sonoma8
It is tough to beat 5% interest + yearly inflation in the market. 3% interest + yearly inflation is a lot more obtainable, but it is still not a sure thing.
I would definitely pay off boat loan. Car note could be argued either way. I would not dip into emergency savings to pay truck note faster or fully. Not worth it unless you have extra cash lying around in my opinion.
I would definitely pay off boat loan. Car note could be argued either way. I would not dip into emergency savings to pay truck note faster or fully. Not worth it unless you have extra cash lying around in my opinion.
Posted on 1/15/19 at 10:49 am to sonoma8
Disposable income is nice and has a value that you have to determine.
Paying the loans off gives you more flexibility to address any changes in your financial situation. You are less constrained by a minimum level of income.
Paying the loans off gives you more flexibility to address any changes in your financial situation. You are less constrained by a minimum level of income.
Posted on 1/15/19 at 11:15 am to HYDRebs
Notes currently:
Boat $300 @ 5%, I pay $400 monthly
Truck $500 @3% I pay $600 montly
Daycare is $1k which will be $500 once oldest starts school.
In my head, having that extra $1500 a month would be huge. Adding that to the already $2k would avg $42k a year extra compared to $28k with just the boat and daycare.
Boat $300 @ 5%, I pay $400 monthly
Truck $500 @3% I pay $600 montly
Daycare is $1k which will be $500 once oldest starts school.
In my head, having that extra $1500 a month would be huge. Adding that to the already $2k would avg $42k a year extra compared to $28k with just the boat and daycare.
Posted on 1/15/19 at 11:24 am to sonoma8
The financially sensible thing would have been to not buy the boat. But since you did, a 5% certain return is worth paying off.
3% is low enough that investing instead is perfectly reasonable.
The amount of increased cash flow from paying off both isn't particularly relevant.
3% is low enough that investing instead is perfectly reasonable.
The amount of increased cash flow from paying off both isn't particularly relevant.
Posted on 1/15/19 at 12:02 pm to foshizzle
quote:
The financially sensible thing would have been to not buy the boat. But since you did,
And also drive a Corolla until the wheels fall off, only invest in diversified index funds, and wear socks when having coitus.
Posted on 1/15/19 at 12:10 pm to foshizzle
What do you guys do for fun? The guy has great disposable income. This board is a bit insane in the don't spend, save for retirement. I thoroughly plan on retiring by 60, but I have seen first hand what can happen medically and situational. You better enjoy life as you go. That most likely involves spending money. The goal of life should not be die with the most money possible. Sorry for the soap box, but the sentiment of this board is the complete opposite of moderation.
Posted on 1/15/19 at 1:30 pm to sonoma8
Dave Ramsey would say pay off the boat and then the truck.From the perspective of old man I say don’t go overboard on saving and investing.It’s important to enjoy your life while you still have it and/or your health.I’ve known too many people that pinched pennies all their life with the idea they were going to enjoy their life when they retired.Then they died or developed catastrophic illness before they retired or shortly thereafter.I spent too much money on hunting,fishing but still accumulated 1 million by age 60.Avoid restaraunts except special occasions,they’re money pits and bad for your health.One thing I regret is not taking the kids on more vacations.All in all,sounds like you’re doing pretty welll.
Posted on 1/15/19 at 1:37 pm to GeauxTigers777
quote:
This board is a bit insane in the don't spend, save for retirement.
I'm not sure that is a fair generalization. I thinkyou are right in that there are some that are on the extreme end of dont spend and save it all for retirement.
I also think there is a healthy dose on here of those that say don't spend money on loans, save what you need for retirement first and pay cash for all your fun stuff. The key to being able to pay cash for things you want is having a lot of disposable income.
This post was edited on 1/15/19 at 3:01 pm
Posted on 1/15/19 at 2:16 pm to LSUA 75
quote:
One thing I regret is not taking the kids on more vacations.
This..... having that extra money every month to me would give me an opportunity to do that and still save a good bit for retirement.
Posted on 1/15/19 at 2:22 pm to sonoma8
The car is fine.
I'd pay off the boat for sure.
I'd pay off the boat for sure.
Posted on 1/15/19 at 2:24 pm to sonoma8
pay off boat. truck interest is tiny who cares.
take rest save and invest
take rest save and invest
Posted on 1/15/19 at 3:01 pm to sonoma8
Apologize if I missed it, but where is the 33K to pay off the truck and boat going to come from?
Posted on 1/15/19 at 3:42 pm to LSUFanHouston
That was my question? Do you have 33K sitting around and asking if you should invest it or pay off loans? If that’s the case, I’d say pay them off if you can as long as your not into your savings.
Posted on 1/15/19 at 5:38 pm to Suntiger
quote:
I’d say pay them off if you can as long as your not into your savings.
Why pay this off if you can invest it?
quote:
Currently have $23k left on a truck note @ 3%.
Posted on 1/15/19 at 7:10 pm to LSUTOM07
Man pay off the truck and boat tomorrow if you can. if you cant then start doubling up on payments. Me personally i like the peace of mind that i dont owe anyone.
Posted on 1/16/19 at 7:17 am to LSUA 75
quote:
Dave Ramsey would say pay off the boat and then the truck
The problem with DR is he would do this even if the truck note was 25% APR.
Use math, not a religious zealot, to manage your finances.
Posted on 1/16/19 at 8:52 am to seawolf06
quote:
The problem with DR is he would do this even if the truck note was 25% APR.
Use math, not a religious zealot, to manage your finances.
That completely ignores the basis for his recommendation which is in fact based in the real world.
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