15 year financing, biting too big, chewing too slow?

[flaggship1]

Originally Posted by Mike Thomas

If you can't pay for something, don't buy it. That is the simplest advice you will ever get. Now there will be lots of others out there that will come up with all kinds of logic of how this could work, and how that could work, and how they need the interest to take off their taxes, and the list goes on and on. The fact is, they are all trying to sell you on the idea that you need this. Really, you deserve this! Yes, you can afford this! In fact, you have earned this! ALL A MYTH!

Fact is, no one needs a motorhome. A motorhome is a pure luxury item, for those of us who have the money to pay for it. And the worst part of it is, it is the worst investment you will ever make. An any one of a million idiots on the road can get you in an accident, and it is all gone in an instant. But all those other people telling you, you can do this, well they just want in your pocket.

Forget all the talk of "freedom of the road", "go where ever I want", "make some great memories", that is just talk to justify a poor investment, that you are definitely going to lose money on.

Bottom line, if you can't pay for it now, go ahead and finance it. You will end up paying for it, and a lot more in interest and worry, and jeopardizing you financial security if the economy falls apart.

So now you are asking who is this idiot on a rant. Yes I own a motorhome that I paid cash for. Cash that I earned by working with my hands, and not my head or my financial advisor, or some inheritance. But I knew going in, it was a bad investment, that I was just throwing my money away on something that I hoped I might have some fun with.

So buy it, if you can afford to throw your money away.

Mike - In May of 2008 you posted about wanting to upgrade to a Newmar to tow your trailer containing your Model T, behind your then 1995 Winnie. Your profile indicates you still have the Winnie. Were you able to upgrade in '08 and have not updated your profile yet? Or did you decide to keep the Winnie when you realized all of the above. It is a pretty harsh assessment of the RV experience ya have there. Lots of truth in it but also some things that seem pretty variable and not so cut and dried to me.

A young couple might want to finance something for their growing family to camp locally for example. I'm not trying to get into Bluegrass' pocket but think there are circumstances where financing can work for you. I've done it twice. Currently working to retire a 15 year note originated in 2012 Not Later Than this time next year. So paying directly to principle and paying off a 15 year note in < 3 years - with a hefty down payment is working for us (~65% down).

The reality that cannot change is that an RV is a depreciating asset just like a car. And while there are few if any RVs that turn out to be like the Model T - a well kept vehicle / RV can bring what a buyer is willing to pay. Ya can't win the war but it doesn't have to kill you either.

Steve

[Scarsdale]

Originally Posted by Mike Thomas

If you can't pay for something, don't buy it. That is the simplest advice you will ever get. Now there will be lots of others out there that will come up with all kinds of logic of how this could work, and how that could work, and how they need the interest to take off their taxes, and the list goes on and on. The fact is, they are all trying to sell you on the idea that you need this. Really, you deserve this! Yes, you can afford this! In fact, you have earned this! ALL A MYTH!

Fact is, no one needs a motorhome. A motorhome is a pure luxury item, for those of us who have the money to pay for it. And the worst part of it is, it is the worst investment you will ever make. An any one of a million idiots on the road can get you in an accident, and it is all gone in an instant. But all those other people telling you, you can do this, well they just want in your pocket.

Forget all the talk of "freedom of the road", "go where ever I want", "make some great memories", that is just talk to justify a poor investment, that you are definitely going to lose money on.

Bottom line, if you can't pay for it now, go ahead and finance it. You will end up paying for it, and a lot more in interest and worry, and jeopardizing you financial security if the economy falls apart.

So now you are asking who is this idiot on a rant. Yes I own a motorhome that I paid cash for. Cash that I earned by working with my hands, and not my head or my financial advisor, or some inheritance. But I knew going in, it was a bad investment, that I was just throwing my money away on something that I hoped I might have some fun with.

So buy it, if you can afford to throw your money away.

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Hmmmm, where do I begin? This is one of the more mean-spirited posts I've seen on this forum. The comment about how this guy "worked with his hands and not his head" made me laugh out loud. Nothing wrong with working with your hands....but it's certainly no more noble than working with your head. I did both during my 35 year career.

The poster is correct about one thing....an RV is not a good investment. Either is a boat, or a luxury car. Heck, neither is ice cream or a nice tri-tip.

I just bought my first motor home. It's a new Georgetown 328, and I financed it for 20 years. I have more than enough money to pay cash for this motor home. I got advice from my tax accountant about this. I just retired, and I have to watch the amount of income that I declare each year in order to stay in a good tax bracket. Taking enough money out of my IRA accounts to pay cash would have put me into the 35% tax bracket, and that hits ALL of my income. My plan is to take out some money each year to pay down the principle on this loan, but not take out enough to bump me into the higher tax bracket. I think it's a good plan.

Yes, I know that I'll lose money on this deal, and I know that using a loan to purchase a depreciating asset like this doesn't make sense if you just look at the numbers on paper.

Guess what? I DON'T CARE. Why?

We are all human, and we all die. The luckiest of us will get 20-30 years of retirement. Then we are gone. I have friends who have died before they got to retirement, or shortly after they retired. Do you think these folks care about their investments today? I think they would regret missing some of the best experiences that life has to offer much more than the having a smaller bank account at the end.

I grew up camping, and now that it's play time for me, I want to get out and see this great country of ours. I want to do this while I'm still strong enough and healthy enough to enjoy it. Fifteen years from now, I might not be alive. I might not be able to drive anymore. I might be ill. My DW might be gone, leaving me without my cherished traveling partner. So rather than save up my money to pay cash, I financed. Gladly.

If the economy doesn't completely crater and DW or I don't have any huge expensive illnesses before the end, our heirs will end up with a lot of money to divide among themselves when we are gone. Did this purchase cut into that? A little, I guess, but it's in the noise.

My advice to people is to get out and enjoy your life while you can. You may be alive a shorter period of time than you think. That should be weighed along with the financial details when you decide the best course for yourself. Don't let anybody tell you that you are stupid for taking your happiness into consideration.

[Bob-n-Laura]

It's probably not entirely fair to poke at Mike Thomas, but I just wanted to echo what Scagsdale said. We are here only a fairly short time and what price lifestyle?

Yes, I think everybody has given the OP good advice on how best to calculate something that can't be completely calculated.

But . . . the bigger issue of how each of us decides to afford this lifestyle while balancing the time factor is more philosophical. It's interesting to read all the different choices out there.

It seems to me that we humans, especially we humans over 45 or so, are also depreciating assets, much like MH's. Since we can't predict if we have a cancer busily cell dividing inside us, or some other dread disease that hasn't made it's presence known yet, we have today and the near future and we who are lucky enough to be healthy and vital enough to enjoy this . . . well, what are we waiting for? A written invitation to life?

Like Scagsdale, I have lost a number of friends and loved ones who died before or just after retirement. Some went slowly, some went incredibly quickly - none had that much time to plan every detail out (although some did live for important things - one of my friends wanted to see his younger son graduate from high school and he did, dying just a few months later). I am glad and happy to be here, my husband (yes, he's Scagsdale) and I are working to be both responsible to our future selves and our heirs, AND enjoy these years as much as we can.

We're thrilled that tomorrow, March 24, we pick up our new baby, our 34' Forest River Georgetown 328. Our dog will be with us for the shake-down camping trip and we couldn't be happier, even if we're a bit apprehensive about the big PDI and shake down.

Woo hoo!

Laura

[MickBrennan]

Originally Posted by bluegrassrv

The coach books around 113,000 right now. So I guess you could say 20% down.

You are playing games with imaginary money. I guess it might be a good idea to save some money for a real down payment. That way you could lower your payments.

I know everybody is getting spring fever and that must be a very nice unit. Renting money is quite expensive when coupled with depreciation.

[flaggship1]

Originally Posted by MickBrennan

You are playing games with imaginary money. I guess it might be a good idea to save some money for a real down payment. That way you could lower your payments.

I know everybody is getting spring fever and that must be a very nice unit. Renting money is quite expensive when coupled with depreciation.

Actually the rent on money with a good track record is pretty low historically. Still can't beat the reaper "depriciation" but as I said above, a healthy downpayment combined with low rent money, can really work out for ya if you buy right.

[Andyfarmer]

In order to keep from going upside down you must start out right side up. The only way to do this is to pay down the depreciation at the get go. Consider what your rig will be worth in 5 years with estimated mileage and make sure you stay ahead of that amount. Take very good care of it so that someone will want to buy it at that time.

[koda59]

We just bought a 2008 Thor Mandalay. We financed it for 20 years. Will we pay it off early , Yes. Our kids inheritance is set aside for them. Home is paid for, so it is time for DW and I to have some fun. I could meet my maker tomorrow. Lost 2 brother in laws and they had all these plans for when they retired. They never got to do any of them. I don't think anyone can live on what about tomorrow. What happens tomorrow is beyond our control.

[plasma800]

Finance the thing and ENJOY YOUR LIFE. It's worth it for the experience, don't let the nay sayers bog ya down. You're not going to take the money with you when you die anyway.

Also, consider this,,,, OP, you said what if you want to sell it in 5 years... but what if you DON'T want to sell it in 5 years.

I know for a fact my coach has another 10 to 15 years in it, and I can drive it til the wheels fall off it.

[flaggship1]

Originally Posted by plasma800

...I know for a fact my coach has another 10 to 15 years in it, and I can drive it til the wheels fall off it....

And with your luck they just might.... KIDDING.... (I read your posts LOL)

Truthfully - you are 100% correct. I paid a pretty penny for my brand new 1991 Airstream 190 B-Van in '91 (~ $41k). A couple years ago I sold it for song - somewhere around 140 K miles on it, and while it had been rode hard and seen better days, I was happy to let er go for a song. She was functional on evey level including the generator. There were so many great memories in that puppy, I can't imagine what our life would have been like without all those trips, weekends, Indian Princess campouts, etc., etc... I would not trade any of that for anything. 10 year note - kept it another 10 or 11 years. Still - the next guy gets to remodel er and spit shine er for a song. All good by me. We're on to bigger and better and hopefully - the Bounder will last just as long.

[Superslif]

You have to ask "what is life worth?" Enjoy... "GO RVing" like the saying says...

Should I keep working till I'm 55, 60, 65 maybe to make to sure I have enough for the nursing home or should I stick around till 70. Get out when you can, buy that RV that fits your travel plans, and see the country....

Where I'm employed, too many are just wasting away...They hobble into work, bad knees, hips, backs...day after day. I guess they have nothing to do besides keep working. If you have not saved enough $$ working 40 - 45 years here, then your doing something wrong. I plan to get out at 53ish...Too many things to do, places to go, things to see and working is not one of them.

[PyrateSilly]

Life is too short to not get out to enjoy it. I learned that the hard way. I used to work 50 - 80 hrs a week. Not anymore. I have almost died several times and I do not want to go thru life without enjoying it anymore. If that means buying another RV on credit like the one we have now then I will do it just so that I can enjoy life now and not "wait" till later - There may not be a later.

[HuntingHawk]

There are alot of variables with my credit union. Your credit score & length of finance mostly dictate interest rate. But also have the option of used auto loan (up to 60 months financing) or as a second home loan.

[philand]

Originally Posted by LakeKerrGuy

WOW, did not know I no longer need to pay taxes. I want all that money back that I've sent in on April 15. Been retired 8 years and didn't know this...

Me too I did borrow to buy the current S&B, after paying cash for the last 3. I can make more than 3.5% in tax free muni. closed end funds. I wish I had of know about those 1.5%'ers though

[jerryhawkins]

Yesterday is history Tomorrow is a mystery I think I will try to enjoy Today. Rolling thru the good old USA in my old age seems to be working . Happy Trails!!!!