Community Forums

Jack1234 · 07-24-2012, 01:01 PM

Quote:

Originally Posted by Ramblin

Would make sense if you could borrow at 2% and put it somewhere that makes 5%.

Well ........the United States of America borrows (10yr fixed) money at around 2%.....If you're borrowing (10yr fixed) at 2%....who are you....Ben Bernanke?

Ramblin · 07-24-2012, 01:40 PM

Quote:

Originally Posted by Jack1234

Well ........the United States of America borrows (10yr fixed) money at around 2%.....If you're borrowing (10yr fixed) at 2%....who are you....Ben Bernanke?

My coach is financed at 2%, simple interest. It made more sense to leave my money in the bank than pay cash for it, and my last name is not Bernanke.

Jack1234 · 07-24-2012, 01:53 PM

Quote:

Originally Posted by Ramblin

My coach is financed at 2%, simple interest. It made more sense to leave my money in the bank than pay cash for it, and my last name is not Bernanke.

Point made....makes sense.

TheArnolds · 07-24-2012, 06:29 PM

The only debt I have is my MH, house, cars, credit cards, etc. all have a zero balance. Children all grown and college has long since been paid. I could of paid cash but I do get a good return on my investments that exceed the interest rate on my MH loan. At some point I may pay it off after I fully retire but for now I will use someone elses money.

Davdeb1 · 07-24-2012, 08:15 PM

Quote:

Originally Posted by Jack1234

If your Bank offered you a 10yr "fixed" return (federally guaranteed & insured) of 6-7%...... How many of you would put SOME of your money in this......or would turn your back on this offer and prefer to have ALL your money invested in the markets?

If the fed rate for a 10 yr bond was 4.5 or higher, I would be willing to put 5 years of expenses in something like that. But without that kind of support, a bank offering that would be in trouble, and so would the US government, similar to Spain right now.

Kathryn · 07-24-2012, 08:37 PM

Quote:

Originally Posted by Dance Chick

We pay cash for everything. I do not want to be in debt. Life has a different feeling for me when I owe no one. We are fans of Dave Ramsey who says, "The borrower is slave to the lender." I know there are those of you out there who manage your debt fine and probably won't get into financial trouble, but I just breathe easier knowing what I have I own. What we have may not be the best or most expensive, but it's ours.

WOW! Less than a week and look at all the answers! Have just started reading, but had to respond to the above poster ...

LOL! Dance Chick - Don't know who Dave Ramsey is ... but the quote, a good one ... is from the BIBLE!

Not that the Bible is against borrowing, just to use wisdom in your finances - it also says a good businessman lends his money at interest...

Now let me go back to reading the thread!

Kathryn

Kathryn · 07-24-2012, 09:13 PM

Quote:

Originally Posted by Automobilist

Why? Your "6.5%" return in your portfolio is taxable (sans IRA). Probably means a true return of around 4% net (but how much do you pay the money manager?). Your camper's interest rate of 4.5% is paid with after tax dollars. That means if you have a $1,000/month payment, you had to make $1,400 or so before tax... That might be offset by $200-300 in tax "savings".

Real dollars in and real dollars out; it's real tough to make a good argument to finance an RV, boat, car, etc...

ummmm ... you are calculating a 38-40% tax rate!!! Who pays 38% taxes???

Kathryn

laj · 07-24-2012, 09:26 PM

Lots of people pay that much. If you add all taxes in, lots people don't even think about, you can get lots closer to 70 percent
USA ain't cheap

Jack1234 · 07-24-2012, 09:43 PM

Quote:

Originally Posted by Davdeb1

If the fed rate for a 10 yr bond was 4.5 or higher, I would be willing to put 5 years of expenses in something like that. But without that kind of support, a bank offering that would be in trouble, and so would the US government, similar to Spain right now.

Dave......if you borrowed money for your RV at around 5% (for a fixed term of 10yrs) and your plan was to cover this expense with the money you had in an investment account, ....you would need to add.... Capital gains taxes (+1%) ....plus Trading Fees & Management Fees (1%).... Less your second home tax credit (.075%).... Your true cost of borrowing money would be around 6.25%.

My point was.....If you HAD the money and paid-off the RV loan ......you would realize an immediate & guaranteed return of 6.25%....(no more loan). Wouldn't this be better than taking the "risk" that you investment portfolio was going to return better than 6.25% year-in & year-out for 10yrs.?

In hindsight, I probably would have been better to just ask the question in this fashion. Regardless, It is now clear from many of the responses that no one is paying anywhere near " true borrowing costs" of 6.25%... So the question is pretty much meaningless. In fact, I now pretty much feel like a dope for paying cash for my MH!

Alan24601 · 07-24-2012, 09:48 PM

I love the different opinions expressed in these posts. My father was an all cash person and said many years ago that when we need to pay for a drink of water society is in trouble. His words are correct and after many years of doing other things I learned to manage money so my family is not a slave to debt, not rich but no debt and a certain freedom that provides. The number of toys one owns can indicate success or envy, unfortunately envy generally indicates someone else owns your time. Love that the lessons my father taught me in spite of my youthful skepticism have made my sunset years less stressful. if my wife reads this she will tell me I am becoming a person like my father, so be it!

DBOL · 07-24-2012, 09:48 PM

Well to buy one these toys that go down in price of $10,000 a year is crazy any way and we all are crazy and Spoiled ever last one of us wheather we can pay cash or finance,just be thankful we live in USA and still have right to be spoiled and enjoy our labor,but this could change in near future.When i drove off lot I ask the wife what she thought this thing was worth now she looked at me like I was crazy and I told her it was worth$0 cause thats the only way i could justify such a purchase.and besides when i leave this earth i can't take nothing with me,but my Sole!
God bless and enjoy what the Lord allows you to have!

smack2020 · 07-24-2012, 10:10 PM

Quote:

Originally Posted by DBOL

Well to buy one these toys that go down in price of $10,000 a year is crazy any way and we all are crazy and Spoiled ever last one of us wheather we can pay cash or finance,just be thankful we live in USA and still have right to be spoiled and enjoy our labor,but this could change in near future.When i drove off lot I ask the wife what she thought this thing was worth now she looked at me like I was crazy and I told her it was worth$0 cause thats the only way i could justify such a purchase.and besides when i leave this earth i can't take nothing with me,but my Sole!
God bless and enjoy what the Lord allows you to have!

This sure sums it up

Dogpatch · 07-24-2012, 10:38 PM

Quote:

Originally Posted by Kathryn

ummmm ... you are calculating a 38-40% tax rate!!! Who pays 38% taxes???

Kathryn

I'm in a 48% tax bracket. Us Canadians are WAY over taxed!

Automobilist · 07-25-2012, 12:01 AM

Quote:

Originally Posted by Kathryn

ummmm ... you are calculating a 38-40% tax rate!!! Who pays 38% taxes???

Kathryn

We have an excellent tax attorney, and still pay the top federal rate, plus top rate California taxes, plus a myriad of other taxes and "fees". Make a lot, pay a lot. No way I would live anywhere else to save a few thousand on taxes. It's just about perfect right here...