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I subscribe to your way of thinking as well. While I easily have the cash to pay in full for my Porsche, I would never pull it out of savings to do so for all the reasons you stated. I would be curious if it’s a generation thing as it relates to the high need to have no loan on what they buy. Rather than looking at interest rates of the loan vs interest of what their money is making. Seems foolish to me to give up money as well as reduce your safety net just to tell others I paid cash for it. I usually put down about 50% or a little more from the sale of my previous car. But again, my grandma came through the depression and still recycles her Reynolds Wrap😏
while I see the points of how you guys feel, I just want to add that I do it for peace of mind. Not so that I can tell other people I paid cash.
At 45 my monthly burn is less than when I was 25. It helps me sleep better. I’ve sewn lots of wealthy people lose everything because they were heavily leveraged.
I realize im likely at the opposite end of this spectrum. But it works for me.
I subscribe to your way of thinking as well. While I easily have the cash to pay in full for my Porsche, I would never pull it out of savings to do so for all the reasons you stated. I would be curious if it’s a generation thing as it relates to the high need to have no loan on what they buy. Rather than looking at interest rates of the loan vs interest of what their money is making. Seems foolish to me to give up money as well as reduce your safety net just to tell others I paid cash for it. I usually put down about 50% or a little more from the sale of my previous car. But again, my grandma came through the depression and still recycles her Reynolds Wrap��
Foolish to put down anything on a leased vehicle.
If it is stolen or totalled you can't recoup the loss of your down payment.
The fact that you have reduced your monthly payment on paper is purely psychological since you would have that money in the bank to make the higher payment anyway and avoid the risk of losing it should the above situation occur.
Foolish to put down anything on a leased vehicle.
If it is stolen or totalled you can't recoup the loss of your down payment.
The fact that you have reduced your monthly payment on paper is purely psychological since you would have that money in the bank to make the higher payment anyway and avoid the risk of losing it should the above situation occur.
I don’t lease and I never will. Mine is a hybrid approach where I am not losing the whole interest difference between the loan and investment yet keeping my payment low. The best answer is to never buy anything and keep it all in the bank. So in that case, none of us are very smart.
while I see the points of how you guys feel, I just want to add that I do it for peace of mind. Not so that I can tell other people I paid cash.
At 45 my monthly burn is less than when I was 25. It helps me sleep better. I’ve sewn lots of wealthy people lose everything because they were heavily leveraged.
I realize im likely at the opposite end of this spectrum. But it works for me.
I overstated, as I agree peace of mind is very important to me as well. We all purchase our items with that fact heavily influencing our decision. Hence, really no right or wrong.....just what makes the most sense to each individual with the stage in life they may be.
This is an old thread and I'm surprised about the number of people who pay cash. Paying cash for a 100k+ car is stupid IMO.
Cash gives you a buffer if your financial situation goes to crap (lost job, medical, investment gone bad etc etc). It can be invested to earn more etc.
You can finance a car for 2-4% today...That is easy to make in the stock market in less than a week. Unless you're really clueless or pay a retard to manage your money 10-20% gains per year are easy. Dumping cash into a new car that loses 20% per year is as Dave Ramsey says 'stoooooopiiied.'
If you're buying older used cars and slowly upgrading, paying cash from 'saved depreciation' can make sense. Never will it make sense for a brand new Porsche.
Leasing is also a rip off unless you're the type that likes to trade in every 2 years and limit miles. Its never cheaper than financing longer term.
Best thing to do is to finance with the longest term (between 60-70 months today), lowest interest rate (between 3-4% today), and least down payment possible (typically banks want 20%). Save or invest your cash. Keep and drive the car 5+ years or don't buy.
Oh you're the person that beats the market. Nice job.
I will make three points.
1.Your comments sound the exact same as the three people that lost their homes on my street after 2008. It's sad to see nice people lose their homes.
2. There are two people involved I every trade. While you think its a steel, and everyone is buying, there is always, always another person that is sure its time to sell. This is the same with a loan. Banks make money. It there was a safer place to make money they would. If there was a guaranty 10% to 20% return in life we would all be rich.
3. If you make 10% to 20% in your portfolio, I'm sure you have it 100% margined. It's easier to borrow from your brokerage account than it is to take a loan. The more money you invest the more you make.
It's not as simple as saying everyone is a fool to pay off a car. It's a toy. I have paid cash for every car I have purchased since I was 16. It's worked very well for me. Maybe you started investing in 2009 and never seen the markets go south. 83, 99, 08.
Borrow, Lease, Pay Cash. Do what is best for you. Nothing wrong with paying for a toy with cash, it's a smart move.
You can finance a car for 2-4% today...That is easy to make in the stock market in less than a week. Unless you're really clueless or pay a retard to manage your money 10-20% gains per year are easy.
If you're not a professional money manager, you should be. You, are a rock star.
Apples and Oranges, however, you decide to be able to attain the 991 of your dreams is commendable to me. Not everyone gets to have/own/lease a 991. So however you do it, congrats to being able to have one and enjoy driving it. I bought mine cause I wanted to go that route, my choice could be different from how someone else would. I'm just enjoying my ride as I daily mine.
Oh you're the person that beats the market. Nice job.
I will make three points.
1.Your comments sound the exact same as the three people that lost their homes on my street after 2008. It's sad to see nice people lose their homes.
2. There are two people involved I every trade. While you think its a steel, and everyone is buying, there is always, always another person that is sure its time to sell. This is the same with a loan. Banks make money. It there was a safer place to make money they would. If there was a guaranty 10% to 20% return in life we would all be rich.
3. If you make 10% to 20% in your portfolio, I'm sure you have it 100% margined. It's easier to borrow from your brokerage account than it is to take a loan.
It's not as simple as saying everyone is a fool to pay off a car. It's a toy. I have paid cash for every car I have purchased since I was 16. It's worked very well for me. Maybe you started investing in 2009 and never seen the markets go south. 83, 99, 08.
Borrow, Lease, Pay Cash. Do what is best for you. Nothing wrong with paying for a toy with cash, it's a smart move.
I can't beat the market. Its chaos and I go along with it. What I can say for certain is stocks go and stocks go down. The question is where do you buy and where do you sell. Over a long term, markets go up.
1. Wrong. People going upside down on mortgages that had them over leveraged has nothing to do with investments. Today banks wont lend you money if your debt is too high.
2. Yep there are always winners and losers. Lots of methods of trading stocks, but I buy low when no one else is buying and sell high when no one else is selling. Trades are longer term.
3. Don't need to use margin to get decent gains. Margin account lets you go in and out of stocks assuming you maintain 20k+ balance. No one says you have to use the margin and sometimes it makes no sense longer term due to interest.
That's the trend I see with some people. They touched a stove once and burned their hand, so now they never cook. As you said, when someone sells, there is a buyer... there were many big time losers AND big time winners in the crashes.
Look at it this way: The cash you wasted buying a car depreciated 50% after 5 years. That's a 10% loss per year and you could take 3% inflation off that...yes you could possibly lose more, but you still lost.
People can do as they wish with their money. All I'm stating is that it makes a lot of sense to keep more of your cash and finance a car.
For me a car isn't a toy - its a transportation tool. The only difference between another car is mine cost more because because my priorities/demands are different...I pay more per month for a car instead of other things (including saving it). Nonetheless, a car is like a house...an expensive item required for many people's lifestyle. I do agree that I'd have a really hard time justifying financing or paying so much cash for a 'toy car' to use sparingly.
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3. Don't need to use margin to get decent gains. Margin account lets you go in and out of stocks assuming you maintain 20k+ balance. No one says you have to use the margin and sometimes it makes no sense longer term due to interest.
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You're talking out both sides of your mouth.First you say... Interest on a car loan is good because you have more money in the market making 10% to 20%, Then you say ... interest on a margin account is bad, too much interest for the long-hall.
Why is paying interest on a 100K car loan any different than paying interest on $100K margin account? You are making way more than the margin interest.
Whether you pay cash for the car or take a loan your net worth does not change. Of course the car is depreciating so your net worth is going down if all else stays the same.
03-11-2019, 11:46 AM
Never.
