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re: People who think they are smart because they pay cash for their cars
Posted on 11/26/17 at 8:39 pm to Jackalope
Posted on 11/26/17 at 8:39 pm to Jackalope
I can understand paying cash. I've never financed more than ~20k. Even as the price of vehicles I get are climbing. I dont love having a note hanging over my head. Its a comfortability thing. But logically, there's no issue with financing and those acting like it's dumb are looking like fools. I could have easily not put money in my 401k, Roth IRA, stocks, or safety net and bought my cars cash. But why? Both are at 1.9%. I didn't feel good with 750 a month hanging out there, but I was going to take advantage of what I did feel comfortable with. And again, logically, I could have easily financed it all.
0
Posted on 11/26/17 at 8:41 pm to Volvagia
I buy mine through my S Corp as a job cost and it comes off the bottom line 100%. I don’t claim them as assets or depreciate.
Posted on 11/26/17 at 8:45 pm to fightin tigers
quote:
Ramsey is a multitime bankrupt millionaire that lectures people on how they should save money.
He made his millions off selling books to people who are bad with money.
Basically a con man getting rich off selling his method to get rich.
He was bankrupt twice, from leveraging real estate, which is why he takes a hard line on financing.
He tells his listeners he is in the business of selling financial knowledge almost every show.
He promises nothing to those that buy his books or use his course materials, there is no con.
Posted on 11/26/17 at 8:45 pm to Street Hawk
Wealth is about freedom. When you don’t have any debt you have a lot more freedom. There is no calculation in finance text books for that.
ETA: at least for me.
ETA: at least for me.
This post was edited on 11/26/17 at 8:46 pm
Posted on 11/26/17 at 8:47 pm to Street Hawk
Wow this is really groundbreaking stuff.
Posted on 11/26/17 at 8:47 pm to Street Hawk
quote:
Your guys need to look up this Finance 101 concept called 'Time Value of Money'.
I have taken plenty of finance courses, not a single one of them addressed the psychology of personal finance. Feeling secure in one's life has a value, for many people that comes with having as little debt as possible.
Posted on 11/26/17 at 8:49 pm to arkiebrian
quote:
I like the idea that I'm not enslaved to my job for more monthly bills when I pay cash for big-ticket items. I can walk away and be fine not worrying about making payments months or years down the road. Reducing stress in life is a big deal to me...much more valuable than the 5% talked about here.
Here is the beautiful thing: I have that same lack of stress.
My non retirement accounts are big enough to pay ALL of my bills off except for the house, and pay for all expenses for a further 3 months (I know, sparse, working on it).
So I have the SAME EXACT piece of mind as you.
The only difference is that every day that worst case scenario doesn't happen.......I make money.
You don't.
You say you don't want to be enslaved to your job, but that's exactly the reason why you should have assets invested. Its not hard at all to get up revenue streams that spit out a couple hundred a month. Not much by itself, but it allows you more flexibility in your choices, down to even maintaining the same quality of life even if you are forced to accept a pay cut indefinitely.
This post was edited on 11/26/17 at 8:51 pm
Posted on 11/26/17 at 8:50 pm to EA6B
quote:
having as little debt as possible.
I concur.
But Dave Ramsey makes a ton of money on license fees.
Posted on 11/26/17 at 8:52 pm to Street Hawk
BS
People that think borrowing money for depreciating assets that produce no income is wise have no concept of risk.
People that think borrowing money for depreciating assets that produce no income is wise have no concept of risk.
Posted on 11/26/17 at 8:52 pm to JudgeHolden
quote:no you don't
That means I save thousands of dollars a year by bearing my own physical risk of loss
quote:no you don't
Oh, yeah. And I get a better deal by paying cash.
Posted on 11/26/17 at 8:52 pm to Street Hawk
These finance companies must be idiots then. They could just invest the money like you would and make a killing.
Posted on 11/26/17 at 8:55 pm to OysterPoBoy
quote:
These finance companies must be idiots then. They could just invest the money like you would and make a killing.
You do realize that there are investments that people put in that they deliberately lose money on? Massive amounts of cash in negative interest rate accounts?
Its all part of the big picture. And there is a place for everything. I don't have 100% in stocks either, but rather in lower yielding but safer debt purchasing.
And
at you thinking its THEIR money they are financing. This post was edited on 11/26/17 at 8:57 pm
Posted on 11/26/17 at 8:59 pm to I B Freeman
quote:
People that think borrowing money for depreciating assets that produce no income is wise have no concept of risk.
Action A saves you 3% interest.
Action B costs you 5% interest.
You are saying action B is always smarter just because you don't like the label attached.
This post was edited on 11/26/17 at 9:43 pm
Posted on 11/26/17 at 9:04 pm to Volvagia
I don’t understand any of that.
Posted on 11/26/17 at 9:08 pm to Street Hawk
quote:
If you can finance the car at a rate that's lower than what you typically make out of your investments, you should choose to finance instead of paying cash, even if you can afford to pay for the car fully using cash.
You're assuming that most people know how to invest, which they don't.
These are the same type of people that will take a 30 year home loan and say they are going to make an extra payment to principal every year and they don't.
Posted on 11/26/17 at 9:10 pm to Street Hawk
We get it. The shitty funds in your 401k are up and you think you're Baron fricking Rothschild.
This post was edited on 11/27/17 at 5:32 am
Posted on 11/26/17 at 9:11 pm to I B Freeman
It's also a risk to have a chunk of your net worth tied up in a depreciating asset that creates no income. Only difference between paying cash and financing is the fee to defer payment. A fee which is easily worth it in a lot of instances.
Overspending is certainly easier with financing, but that doesn't make financing wrong. Overspending is overspending. Only way you should be at any risk is if you overspend.
Overspending is certainly easier with financing, but that doesn't make financing wrong. Overspending is overspending. Only way you should be at any risk is if you overspend.
Posted on 11/26/17 at 9:11 pm to Street Hawk
Or, you can do what I do, and only buy new cars when I can get 0% financing. You just have to be patient.
Bought my 2015 Mustang GT premium with a few extras for 37k, 0% for 72 months
Bought my 2015 Mustang GT premium with a few extras for 37k, 0% for 72 months
Posted on 11/26/17 at 9:13 pm to guttata
quote:
Dave Ramsey
The only thing DR says that’s worth a shite is his ladder method or whatever he calls it, where you pay off your smallest bill then put the money for that payment on your next smallest bill, etc until your debt is paid. Everything else is horse shite.
I heard him say on his radio show that if he owned a small business he wouldn’t let people use credit cards because he wouldn’t be part of the reason they went in to debt.
You can be damn sure he takes credit cards to buy his shitty books.
Posted on 11/26/17 at 9:14 pm to Volvagia
I have all kinds of investments. I also have cash accounts. I could quit my job now and be fine if I wanted to and this is because I have my house paid off and my vehicles paid off.
Actually I'm researching my exit strategy over the next few months I'm going to buy some sort of business to occupy my time.
Actually I'm researching my exit strategy over the next few months I'm going to buy some sort of business to occupy my time.
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