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Old 07-17-2012, 07:50 PM   #15
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Pay with cash that you have sitting in a .05% savings account or borrow it at 6.5%. Boy. I'd have to give that some thought.
My MH is (for me) a TOY pure and simple. My cash is not, I like to hold onto it, you might even say I like to "Hoard it"

I sleep very well each night because I haven't made a significant capital outlay in a depreciating asset ( I put down $20,000.00 of my own money in the RV, the bank owns the rest) So they take all the risk and I really don't mind paying them a little interest for taking the risk! ( Which by the way I get to write off the interest paid as a second home, like most of us here)

So to each his own, there is no right or wrong answer (cash or finance) as for me, I'll keep my cash! cash is King!
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Old 07-17-2012, 07:55 PM   #16
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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.
The quote you attribute to Mr. Ramsey is a bit older than him. Old Testament, to be exact...believe it's in Proverbs. "Better than I deserve!" #lovethatshow!
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Old 07-17-2012, 08:01 PM   #17
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What risk is the bank taking? You plan on stiffing them down the road? I don't get it. You still have to pay for it. Say you pay 4 or 5 thousand dollars a year interest and you can write it off on your taxes. You think that's a good write off?


Jump in here WYXman
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Old 07-17-2012, 08:12 PM   #18
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A tax write off is not a dollar for dollar tax savings. You're only saving whatever your tax % is. Why give the bank $5,000.00 a yr. in interest to save 25% (or whatever your rate is)? I know it's different strokes for different folks, but the tax write off has long been a justification for some people to borrow...sometimes more than they should.
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Old 07-17-2012, 08:17 PM   #19
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I've discovered owning a motor home is a lot like owning a boat. I just keep pouring money into it.


Ain't it the truth?

And... don't ever, EVER calculate what it costs per mile... or even per night!

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Old 07-17-2012, 08:19 PM   #20
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Many people on this site probably wouldn't be able to enjoy this lifestyle without credit or debt.

To each their own.

Some people live for today, cause they feel there may not be a tomorrow.
Some people do nothing today in anticipation of tomorrow.

If you can pay $400,000 cash for an RV. Good for you.

If you can't, welcome to the rest of us.
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Old 07-17-2012, 08:21 PM   #21
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I know it's different strokes for different folks, but the tax write off has long been a justification for some people to borrow...sometimes more than they should.
Very true. But that doesn't mean that everyone who uses the tax write off as a PART of the equation they use to make decisions is ill-informed or foolish. I do agree that financing solely for the tax write off would seem foolish.

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Old 07-17-2012, 08:27 PM   #22
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What risk is the bank taking? You plan on stiffing them down the road? I don't get it. You still have to pay for it. Say you pay 4 or 5 thousand dollars a year interest and you can write it off on your taxes. You think that's a good write off?


Jump in here WYXman

X2!!

He doesn't realize that he's taking far more risk than the bank, and paying them for that privilege... Things go south in life, he still owes every penny to the bank, and has an extremely depreciated "asset" which is in reality a LIABILITY.

We simply don't borrow for toys, cars, boats, etc. However, I really don't care that so many folks buy their stuff "on time". They tend to want to buy new, and later sell to us their well maintained cars, boats, RV's, etc. at a fraction of what they "invested". (I did buy a brand new Mercedes 550 coupe a year or so ago, but it was just too cool to pass up... Paid cash, of course. )
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Old 07-17-2012, 08:28 PM   #23
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Many people on this site probably wouldn't be able to enjoy this lifestyle without credit or debt.

To each their own.

Some people live for today, cause they feel there may not be a tomorrow.
Some people do nothing today in anticipation of tomorrow.

If you can pay $400,000 cash for an RV. Good for you.

If you can't, welcome to the rest of us.
I don't think anyone said you should not borrow to buy an RV. A few said it might be questionable to borrow from the bank at 6.5% if you already have your own cash in a savings account generating .05%...
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Old 07-17-2012, 08:54 PM   #24
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I don't think anyone said you should not borrow to buy an RV. A few said it might be questionable to borrow from the bank at 6.5% if you already have your own cash in a savings account generating .05%...
You were right. It was about the best way to get it.

My bad.
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Old 07-17-2012, 08:56 PM   #25
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Mr J.C. Penny was the last hold out to extend credit. He believed that credit would cause a person to purchase what he could not afford nor need, but Sears was killing him offering credit to those who couldn't afford to pay cash.
So when I can pay cash I do, when i can't afford nor need I just put it on good old credit.I heard that if you owe the bank 100 dollars and can't pay your in trouble but if you owe the bank 400 hundred thousand and can't pay they are in trouble. So be your on judge one thing for sure no one on this forum will make your payment for you.
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Old 07-17-2012, 09:04 PM   #26
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For me this thread is 2 separate issues:

1) Does it make sense to finance a LUXURY item which is guaranteed to depreciate?

In the original post Rooster proposed that many very wealthy people use "leverage" to finance things. Well those "things" are cash positive businesses or investments where the cash flow, depreciation & tax benefits far exceed the costs of borrowing capital. For example, Bain Capital, a private equity company, always used "other people's money" to finance it's acquisitions, then by using the target companies "resources" it covered the debt and turned a profit for it's investors & it's principals. Put another way....Warren Buffet may have used leveraged or borrowed money to purchase NetJets, but I'll bet he used CASH to buy his RV!

2) Does everything we purchase in life "have" to make perfect economic sense?

I believe this was the point Rick was making. Probably "nothing" about RVing makes economic sense. I am currently sitting in a vehicle that is depreciating at around $50 p/day, it is costing me $50 p/day to park it on a tiny piece of gravel, it gets around 8mpg at over $5.00 p/gal when I drive it and just by driving it, it is probably getting ready to have something break so I can have some RV tech charge me +$100p/hr to fix it..... Luv it!

No one would buy an RV using economic logic ..... So why worry about the logic of cash vrs finance when we're talking TOYs!
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Old 07-17-2012, 09:40 PM   #27
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I could pay cash, but I wont. Just today I got approved for a loan on my new RV. The interest rate is 4.00%. I am very pleased with that for a 20 year loan. I will make more than that on my invested money (I HOPE) that I did not pay out for this Coach. I am very happy with my plan.
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Old 07-17-2012, 10:03 PM   #28
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I'd love to be in a position where I had 400k I could lock up in an RV. To do that, though, I'd likely need about 2 million or more in total cash to start; because if things went bad for a while I'd hate to sell my RV at the massive loss you'd end up taking.

It's like a house, in my opinion... worst investment one can make because it's highly illiquid.

I know others are different, but I'll be honest. When it comes to money, business is business. If given the choice between stiffing the bank and taking care of my family when things go bad... I'll hand the RV/home back to the bank every time.

Steve
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