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

[foreverfree]

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.

Everyone is going to have their own opinion but I have to say that this one really got the hair standing up on the back of my neck. I don't know the OP circumstances but for us this is not a "luxury" item, it is our home. I work in real estate and can tell you that in truth it is all a myth but I won't as that myth has made many people happy over the years. Owning a home is a risk, driving down the road is a risk, living is a risk. Some may choose to pay cash after working for the best years of their lives to have the money to pay cash. Some, my DH and I included, have chosen to buy a moving home now and travel in our earlier years rather then continue to work with the hope that we both live long enough to hit the road together. I can say this as is a real concern as I am a 40 yr old woman who has already been widowed and then blessed with a second chance to share life with someone special.

Only you can determine what is right for you but I hope that you always remember that life is meant to be lived now

[Rich and Cork]

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.

Personally I have never felt I had to "justify" any of my personal choices on spending my money; I like my toys and worked hard to do what I wanted with my earnings.

[StevieG]

Originally Posted by csrrsr

The signs of prosperity and leveraging I see are coming back. It appears we may be setting up a house of cards again. What ever and however you finance anything.....have an escape route.

Ok Chicken Little!!! Just kidding! Here's what I was talking about... Not every investment out there is in real estate or the stock market... Some are actually fairly secure and pay you back regularly. Not just paper gains or losses... That being the case, I would rather have my money working for me than on wheels losing value every day. The kicker in having a loan, as stated in an earlier post, is that Uncle Sam will let you deduct the interest. This works for me because I am in my early fifties.

I guess if I were a retired person, no longer paying taxes, and on a fixed income based on my retirement portfolio and social security benefits, I would be lot more conservative with borrowing. So I guess it really depends on where you are in life...

[csrrsr]

Originally Posted by StevieG

I guess if I were a retired person, no longer paying taxes, and on a fixed income based on my retirement portfolio and social security benefits, I would be lot more conservative with borrowing. So I guess it really depends on where you are in life...

BINGO!! The DW says, "he's not chicken little, but he can start a fire with two penny's in his pocket". ha I would add that most folks find it very hard to retire while still paying on loans so it's very important on the TERM of the loan in conjunction with your retirement plans. My personal decision was to invest every penny I could and make sure all toys were paid off at retirement. But, everyone is different. If your FT and the loan is within your spendable income then other factors become involved. But, you have to keep in mind most people find it hard to retire while still carrying a mortgage on their home whether it's a SB or a MH. The OP may want to consider GAP insurance which pays the negative equity between the value of the MH and the balance of the loan if something should happen to it.

[bluegrassrv]

I've enjoyed reading all comments and they are all good food for thought. I do own sticks and bricks and it's paid for. I don't ever plan on using my home as collateral on anything. If the sky did fall, no one can take my house. I have about 18 years until retirement so that is ample time to pay off a 15 year loan. My thing is that I don't want to be more than $5000 upside down at the six or seven year mark. In six years the coach will be 16 years old but I don't have a clue how it will depreciate during that time. 2004 and 2005 were similar years for the Intrigue so I can look at NADA for those two years and compare the difference. However, 2003 and prior and 2006 and after, the Intrigue had enough differences from '04 & '05 that looking at those years for depreciation purposes would not be comparing apple to apples.

[LakeKerrGuy]

[QUOTE

I guess if I were a retired person, no longer paying taxes, and on a fixed income based on my retirement portfolio and social security benefits[/QUOTE]

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...

[flaggship1]

Originally Posted by LakeKerrGuy

[QUOTE

I guess if I were a retired person, no longer paying taxes, and on a fixed income based on my retirement portfolio and social security benefits

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...[/QUOTE]

You said a mouthful.

[flaggship1]

Originally Posted by bluegrassrv

I've enjoyed reading all comments and they are all good food for thought. I do own sticks and bricks and it's paid for. I don't ever plan on using my home as collateral on anything. If the sky did fall, no one can take my house. I have about 18 years until retirement so that is ample time to pay off a 15 year loan. My thing is that I don't want to be more than $5000 upside down at the six or seven year mark. In six years the coach will be 16 years old but I don't have a clue how it will depreciate during that time. 2004 and 2005 were similar years for the Intrigue so I can look at NADA for those two years and compare the difference. However, 2003 and prior and 2006 and after, the Intrigue had enough differences from '04 & '05 that looking at those years for depreciation purposes would not be comparing apple to apples.

As the incomprehensible Toaster Strudel TV commercial says - "Don't over think it."

There really is no way to know how much something will be worth 6 or 7 years from now. Even if you could know, there is no way to know if you could get what it's "worth". Any number of things can happen that render the market value of something irrelevant and then erode it. A few examples - price of fuel goes through the roof - new fuel becomes available - new technology trumps old technology - cost of credit so high no one can or will buy on credit - cost of credit so low people buy new or more expensive - and so on.

Wanting to be $5 or $6k under water at point B makes this look like a science with +/- X % variation. That's not a bet I would make. We are talking about a Recreational vehicle - and nobody has to have one - they are purchased with Disposable income and like a car or a horse - you can keep it running until it is worthless. Zero residual value to anyone but you. Attempting to predict the point on that curve where only $5 or $6 under water will be very difficult at best.

But if you feel you must satisfy the fear of the unknown with numbers that make you comfortable (rational numbers / irrational thought?) - try this site and others

http://www.myrv.us/pgs/rv/depreciation.htm

As for financing or not. You have gotten much good advice on both sides of the equation.

Happy RVing!!

[StevenNSteph]

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.

[StevenNSteph]

Originally Posted by Libero

It is only reasonable to finance anything is if there is a net gain overall.

The real voice of reason has spoken.

[StevenNSteph]

Originally Posted by S-n-L

First off, we have enough money to be able to pay cash for all of these big purchases and it may in fact feel good to be debt free I do not feel it is the best financial strategy.

There is a simple investment axiom. Never pay interest for depreciating assets. You only take loans when there is a reasonable chance of appreciation during your ownership of it.

With that being said I think you do not realize the power of cash and are not utilizing it to it's fullest potential. Buying a motorhome cash from estate sales, auctions, private sellers who are forced to sell, banks who are holding repo units, etc. etc. All of these will give you the best value for the $$$, saving ten's of thousand of dollars over dealers.

Cash is king when looking for great deals. My usual savings on a cash deal over the lowest price you can find at PPL or other dealers is usually 30%-40%. Imagine buying a 2011 Newmar Mountain Aire for $140,000 instead of the coach you bought last year. That's what my friend did last year, he paid cash to widow who just wanted to dump it.

No mater how you slice it and dice it you will be able to sell the Newmar Mountain Aire for more than $140,000 for a couple of years so you have a free coach for a couple of years and haven't LOST any principal. Play your cards right, sell that one before it reaches $140,000 and then buy a new one the exact same way.

Is doing this possible? Yes I have done it for 18 years, buying and trading coaches and so have others that I have known. My total "LOSS" for 18 years is $54,500 (this is based on selling my current coach in 1.5 years for a wash). This means that my ownership of 18 years has cost me $3030 a year OR $250 a month.

There is no way that keeping my money invested and borrowing money to buy a dealer unit would have given me these types of returns. However the downside with my little scheme is that it takes work and patience. My average time to buy a coach after I have decided 'this is the one' is around 12 months. So you have to have patience and be willing to travel a little to find that great deal.

And don't get me started on buying a new car vs a gently used car. . .

Bottom line - it's your money and do what you think is best.

[flaggship1]

OP - do what is right for you!

There is always a well-known solution to every human problem--neat, plausible, and wrong.
H. L. Mencken, Prejudices: Second Series, 1920
US editor (1880 - 1956)

[sstehman]

I will be new to RVing (but not camping). Like this thread and the varying opinions. In our search we came across a 2002 diesel, 40' Monado that we are soon settling on. Did not know that some lenders do not want to finance older models, however, we have found adequate financing through the dealer. Would like a slightly better interest rate, but can live with what we are offered. Here was my strategy. Had a dollar amount for purchase in mind and no matter how awesome another unit looked, we weren't even going to consider it. Reason being, we are 3 years away from retirement. Are spending $2000 a year for a camper in a seasonal site that has grown boring for us. Wanted something I could pay down quickly, not too old and in good condition. Not overly concerned if we don't come out on the winning side in the end as there are other solid investments to compensate. Bottom line -- after working 40 years, it is time for us to travel the country, enjoy our life and leave the work to someone else. Life is short and you can't get the time back.

My thought is, keep it in perspective so you don't end up in a run-down nursing home someday because you squandered it all away now. And...don't gamble what you can't afford to lose.

[donandmax]

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.

Thomas your oh so right.. And believe me 15 years is a lifetime when your paying every month (ask me how I know) I'm on my last moho.