there isnt any luck involved. its a lifetime of self denial until i could afford the nicer things i wanted
if you buy the house and refrain from financing toys then if you lose your job you wont have the stress of selling things you couldnt afford in the first place

its a simple plan for life. "live within your means" if you have to finance a 10 yr old car then you really cant afford it. i have heard all the low interest other investment ideas but in reality if i lose my ability to earn an income tommorrow i owe nobody anything. my home is modest and paid for. same for my cars and other hobbies. it took a divorce and a loss of a 6 figure job to figure out that being able to afford the payments doesnt mean im wealthy or not in debt. its a choice i make daily to live debt free like my parents did

 

I think you are painting with a broad stroke by saying someone isn't living within their means if they finance a car. Your method works. There is no doubt about it. It is safe. I prefer to allow myself some fun now. My risk is about $200 in interest a year averaged over 5 years and the possibility I may sell my car IF I lose my job and IF it takes me 6 - 12 months to find a new one.

 

without destroying this thread with lifestyles the very definition of "living within your means" is no debt.
im not here to teach anyone how to live. its my choice and im stress free and comfortable. i will suggest you read financial peace by dave ramsey. he changed my life for the better

 

I just refinanced through NASA federal credit union. They are running a special right now and guarantee to lower ur rate 2% with approval of course. They got me 3.0% with a 3 vs 4 year term.

 

i agree w 32, that buying discretionary stuff should be a cash proposition. but ten year old cars? i dunno man.. whether someone finances a ten year old car, without any warranty is of course up to them.. but i would never do that. if you're going to finance a car, it should be new ( i would think ), and have a warranty! this point has recently been brought home to me, as i have only just recently learned what it is like to have a 996 turbo without a warranty lol. it requires constant diligence and upkeep, and although minor, it's regular stuff, nonetheless. eg i just spent a cpl grand on tires, roll cage, motor mounts etc. that was the last two weeks alone and i'm sure something else will come up, whether "needed" or not. i wouldn't want to be doing that AND making monthly payments. my point ( if i had one ). but hey, 1.75-2 points is the "bottom" and will never be again, so. whatever go for it..it IS cheap ( fake azz ) money lol

 

I'd much rather finance a 996 Turbo vs a new 328i. Both are about $40k now but what about in 5 years? Way more will be lost in depreciation + maintenance outside of warranty in the 5 years on the NEW car than on the depreciated car.

You guys are applying black and white answers to equations that have multiple variables that give different answers.

 

I wish I did this... I should have > 3 toys by now.

 

With all due respect, I disagree with this statement. I figured i would chime in here. Definitely not attacking you, just giving you another perspective.

We differ in a couple of ways. While your method is a great way to live your life with the most possible security, you are definitely not maximizing your financial efficiency. I think significantly more entrepreneurial than you do. My thought process is. Take that same $40-50k that you would have paid for the car in cash and put it into something like the down payment on a rental property or 2. Where I'm from, you can pick up a nice 2 family house for around 80-100k. That means you could buy 2 of these with an estimated 20% down. After paying your mortgage, it's reasonable to expect an average monthly return after costs over the course of the year of $600-$800/month, depending on maintenance costs. Now multiply that by 2 (because you bought two houses) The loan on the said porsche is around 700-800/month.

So now for the same money you could have put into a depreciating "toy", you own the car outright after 5 years. You also own Two - $100K properties (assuming no increase in value) after 30 years outright. years 0-5, you are earning an extra $600-$800/month, years 5-30 you are earning between $1200-$1600. Then after 30 years you are an extremely happy and much further well off person.... And all along, you were still living within your means...

 

I have mine through PenFed. I have another twist to my financing situation - THE WIFE!

While I can pay cash, she just won't let me... Women have more of a need for security I guess. IDK. She won't even let me invest our savings... So it just sits in the bank earning nothing. Oh well, I have my own money that I invest and the retirement of course.

I agree, Dave Ramsey is good stuff. I already had that discipline and it is common sense, but I think many of us Americans need reprogrammed a little on debt and "needs."

Anyway, there's my story. Not sure why she married me if she needs that much security. Small business owner is not the poster child of stable job for sure! I always just hope the ups more than take care of the downs. They have so far and I thank God every day for what I have!

 

I agree on Ramsey. It's like AA. Some people need the structure and get in trouble without it.

 

that answer is simple. i wouldnt finance either.borrowing money for any car new or used is against the way i choose to live.
you speak in the best possible scenario which is flawed. 30 yrs without a single month of unpaid rent , maintenece failures or the squatter you thought was a decent couple who trashes you home and refuses to leave until you spend large money in attorney fees evicting and chasing them for the repairs. in the same 30 yrs you lose your job how many times and have to take pay cuts each time. all along you still have this massive 200k debt over your head. this is in no way living within your means. this is the culture of instant gratification which has destroyed a great country from within. ill just stay comfortable and stress free
to the op there are many financial institutions who will gladly loan money. dare to be different from the norm. save your money and use the power of cash to get what you want. just my .02

 

I used to be a cash guy but it defies all financial logic. If you can buy and sell something for a profit, it makes sense, right? Cash is the same; "buy" at 1.5%, invest at a higher rate. I don't see the problem; the car is just the collateral.

Same with credit cards; love them! I pay zero interest and get free money every year; love it ! Not to mention, my credit score is really good, which gets me even more cheap money

 

+1 for those who can restrain themselves - credit cards are great tools! I have bought many car parts from credit card rewards! Just have to be diligent to pay them off each month. My wife uses it for Christmas money!

 

i was comparing ( i think? ) a used car, VS a new one and the relative merits of one being financed VS purchased outright. not TYPE of cars. but i will agree, there is no one answer or solution, given this isn't a math question.

 

Yep, I pay mine off every couple of days.

And to be on topic, I believe my CU would finance up to $33k on my '02 turbo last year.