Wow this turned out in to a big financial class lol!!! well I know about all the ins an outs of the investing and financing , and I rather use someone elses money to buy stuff like this and keep my hard earned money for other more profitable opportunities, when I ownd a house i would get home form it as the tax benefits sometimes outweight the other alternatives. But to each their own I like to enjoy some perks now than work my *** off and deprive myself, then by the time you realize time has passed by and you are old and now you cant enjoy things that you should have in prior years,, times passes fast and then all of the sudden you realize that you should have could have L . I know its riskier than other methods but we have to enjoy life in the now and not wait for it and then all of the sudden is gone. Thanks all for yr input now im goign to go buy a 996 with my AMEX !!!! jk .

 

Yep..save the cash for things you NEED...not things you want...it's cheaper now to use someone else money for the things you want. Good credit is your only friend.

 

THE BORROWER IS SLAVE TO THE LENDER. im a slave to no one

 

*if* you make any money, you are a slave to the IRS. That's my biggest concern. Debt, I can control that. IRS, well, that's a different story. Feels like I am working to fund all the deadbeats, IMO. Almost makes you want to just give up and say f**k it and live off the govt. Very hard to get ahead sometimes - at least if you try to be legit.

 

Amen to that !!! Im also tired of funding my Xs boyfriend car fund .. FML

 

I would not finance a car at my age (54) but thought nothing of it when I was younger .I like not having payments and now that I'm retired it makes things easier.

 

Agreed. Also agreed on the IRS. Unless we live off the grid, there is only so much we can do to avoid Uncle Sam and its crappy tax policies.

Good civil discussion so far.

IMHO there is smart debt and bad debt. In general, very roughly, I see it as such:

Smart debt = fixed mortgages for primary residence (you have to live somewhere, might as well have deductible interest), student loans (if borrowing $ to advance education and earning power, it makes sense), business loans (again, need to borrow $ to make $)

Bad debt = credit card that is not paid off in full, cash advances, timeshares, secondary/vacation homes , risky ARMs, loans to fund vacations/toys/fun. "Bad debt" items should always be paid with cash, otherwise one puts themselves at unnecessary risk.

Unless one lives in a city fortunate enough to have sufficient public transportation, one usually has to rely on a car to go to work (need to spend money to make money). Basic necessity would dictate all one really needs is a used Honda Civic, say at a cost of $15k, to be able to work, buy food, etc...

Anything else, really is a luxury and not really necessary per se, and thus should be paid with cash. Obviously no one "needs" a Porsche 911, which I deem a luxury item the average Joe cannot afford. As such, IMHO, a used 911 should be paid with cash.

Having said that... after 10+ years secondary education and through life experiences gained, I believe that life is short. Work hard, play hard. If you work hard, make good $, live within your means (ie. able to afford basic and luxury items without compromising savings, lifestyle, family), AND not have to resort to bad debt measures, go for it. Whether this means a used or new Porsche, boat, etc...

My 2 cents...

 

I agree, for the most part. I feel that, if you can sell the "toys,etc..." to eliminate the debt, if you have to, you're OK. Again, BUY SMART.
I personally don't mind paying a small fee (interest), as long as it is reasonable, which nowadays it is, to have a toy or two. Again, whatever you're willing to pay to play. It's not fair to tell someone, who maybe doesn't make a ton of loot, that he can never have anything nice, because he can't pay cash for it. Congrats to all of you that have done well and lived well, but not everyone has this benefit. ...and yes, very civil thread so far...rare!!!

 

Wise words man !!! I agree with you. I ve had fast toys most of my life and whenver i get in to a bind i dump them and so far i come out in good shape. the secret is to buy right buy smart. last toy I sold was the Supra and I walked away with a pretty penny, actually thats all i took when i got divorced, as I knew that i could make money back on it.

 

Reading this thread has been really interesting for me. I paid cash for mine because I didn't really want a 45k car payment hanging over my head, but I have to admit, now that I read this and I see numbers like 1.5% I really am reconsidering my decision. I didn't really shop around for a rate - I just asked the Porsche dealer and he said like 5% or something. I figured everyone was getting near that terrible rate!

I'd say that if you're going to finance, don't do it until you can pay cash for half of the car so that if you had to totally exit n(i.e- engine failure, you lose your job and need a pile of cash in a hurry, you wreck it in some way and insurance hoses you). That way you can always pull the rip cord and be back to 0.

I do see 32's point and I guess I do follow his philosophy - it's just a matter of how much risk you're willing to take on to have a fun car. If you have the cash in hand and are debating whether to spend it on the car or finance, that's very different than deciding to pick up a 700+ dollar payment in addition to multi thousand dollar repairs for an old car.

Just make sure no matter what you do, you set aside a 5k slush fund for repairs. That should cover just about anything that can suddenly fail short of engine/tranny stuff.

 

I actually accounted in my estimation for the occasional missed month of rent and repairs. My family and I have been in the business of rental properties for a long time (30+ years). I can assure you, if you know what you're doing, you can minimize potential losses due to vacancy and unpaid rent.

And your starting debt wouldn't be 200k. It would be 160k, and that number goes down every month. Plus you still own 200k in assets that you can easily dump for a much lesser price if you need to get out from the mortgage. But essentially, the properties are a self sustaining in a sense where you won't need to infuse excess cash if you've managed correctly.

Again, everyone has their own way of doing things. Doesn't mean either is the wrong way. You just have to determine what level of risk you are willing to sustain in order to meet your goals. In your case, you enjoy the risk free nature of your method. In mine, I'm willing to take a manageable amount of risk in order to meet my goals.

 

FastCarFreak, I too am in the house rental business as a sideline (for tax purposes more than anything) and have been for about 13 years. I own a mix of resort properties and local run-of-the-mill low-cost rental houses.

The only thing I'd say to correct your assertions is that the decision to own rental property is a business decision. It is a decision to start a business, i.e. a rental property business. It should only be entered into if you are ready to start a full-time or part-time business, same as any other business. To return the types of numbers everyone likes to wave around for the real-estate investment business, it takes time and commitment, and keeping your head in the game. Too many people sell the concept as one of "stick your money into a rental house and watch the checks roll in for 15 years till the mortgage has been paid by the renter(s), then sell it and you have a free house!

There's a lot more to it than that. Not saying you don't know that (I'm sure you do) but I think that many people get the idea rental property is an investment decision (like stocks, bonds, REITs, etc.) when in reality it is a business decision, more like buying a Kinkos franchise. And to that end, it is perfectly reasonable for someone to reject the idea of borrowing on a car so they can use the money to start another business, if they DON'T want to start another business.

 

All good advice here. To make it simple, if you get a good rate, do it. As long as your not getting a loan to fund hookers and beer, your golden