Besides your mortgage, Do you finance anything?
Besides your mortgage, Do you finance anything?
This isn't really a pool. I'm just wondering how many people pay cash for everything and how many take out loans.
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I took out a loan for college - I couldn't have gone to college otherwise - but I saved to pay cash for my first (used) car then paid off that loan. I consider the credit cards to be cash equivalents since we've never paid a dime in interest. So while I'm not opposed to taking out loans I wouldn't use them to finance an optional item, like a car whose price exceded my available cash.
- Random Musings
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I personally don't. You certainly can't invest the money and make the same % as a car loan.snyder66 wrote:I guess what I meant is, Do you take out loans for anything? Cars, etc.
I've paid cash for my last several cars.
If I need to buy major household appliances or something like that, I just pay cash.
Cordially, Jeri . . . 100% all natural asset allocation. (no supernatural methods used)
Many times you have a choice of either very low interest rates OR cash back. It's normally better to take the cash back option and not finance the vehicle.Random Musings wrote:If I can get a 0% or 0.9% ish loan - I'm all for that.
RM
Cordially, Jeri . . . 100% all natural asset allocation. (no supernatural methods used)
Re: Besides your mortgage, Do you finance anything?
I was able to get $2000 off of the price of my car by taking out a Ford Motor Credit loan. They wouldn't give me a better deal on the car if I paid cash. I took the loan and the $2000 and paid off the loan the next month. Does that count as financing?snyder66 wrote:This isn't really a pool. I'm just wondering how many people pay cash for everything and how many take out loans.
BearWolf
I financed cars up until I was able to pay cash. I do not borrow for anything since we paid our house off (but it's always a possibility that a day may come when I have no choice). I don't buy new cars so 0% isn't an option for me.
I do not want to be in debt for anything, although I understand that for others it is a strategy.
I do not want to be in debt for anything, although I understand that for others it is a strategy.
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I'm not sure how wise it would be to get an investment property loan nowadays.i<3Investing wrote:I have a college loan. Probably be looking for an investment property loan at some point in the future.
Everything else is cash or CC which is paid off each month.
Cordially, Jeri . . . 100% all natural asset allocation. (no supernatural methods used)
- Random Musings
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If a cash back option is available, I'd analyze that too. Last time I did purchase a car, I took the cash back option.Jerilynn wrote:Many times you have a choice of either very low interest rates OR cash back. It's normally better to take the cash back option and not finance the vehicle.Random Musings wrote:If I can get a 0% or 0.9% ish loan - I'm all for that.
RM
RM
Re: Besides your mortgage, Do you finance anything?
Oh right, the pool. No, we paid cash for that too. Though if we hadn't put in a pool we probably would have dropped that cash into the mortgage prepayment, and I suppose you could consider delaying the mortgage payoff another couple of years to be the same as taking out a loan.snyder66 wrote:This isn't really a pool. I'm just wondering how many people pay cash for everything and how many take out loans.
- DiscoBunny1979
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0% financing at Home Depot, Lowes for Refrigerators, Washer/Dryer, or other big ticket purchases. Nothing wrong with a year at 0% as long as you budget and pay it off before interest kicks in.
In the past I've even used purchase checks against VISA cards to get a 0% loan for 1 year to finance a fencing project. Purchase checks usually have no fees, whereas all other types of checks do. But that also is changing.
In the past I've even used purchase checks against VISA cards to get a 0% loan for 1 year to finance a fencing project. Purchase checks usually have no fees, whereas all other types of checks do. But that also is changing.
- Dan-in-Virginia
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I play moderately extensive credit card games while paying the issuers not one cent in interest/profit, but otherwise, no.
Wife brought $65k in student loans to the marriage, getting that down to $45k and then re-consolidated to 2.65% so I don't have to let it eat at me was a blast.
I financed my first three cars (clueless kid...a tad more excusable than clueless adults I suppose?), paid all those loans off early. Fourth car was a $6k used family sedan paid in cash. If I ever replace it, paying with cash.
Never going to finance anything again unless it's another house.
Wife brought $65k in student loans to the marriage, getting that down to $45k and then re-consolidated to 2.65% so I don't have to let it eat at me was a blast.
I financed my first three cars (clueless kid...a tad more excusable than clueless adults I suppose?), paid all those loans off early. Fourth car was a $6k used family sedan paid in cash. If I ever replace it, paying with cash.
Never going to finance anything again unless it's another house.
I pay cash for everything.
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When I was first starting out in the 70's I took loans from the Bank of Mom and Dad for my first car and to get started in an apartment. Think I did a loan for 1 more car after that and then learned the "pay my car note before buying the car" method.
I doubt I would finance anything now (other than the mortgage) unless it was a 0% or maybe 1% loan.
There's much to be said for not buying stuff till you can afford it (unless the stuff is a true necessity like a car to get to work). The nicer TV or computer can just wait.
I doubt I would finance anything now (other than the mortgage) unless it was a 0% or maybe 1% loan.
There's much to be said for not buying stuff till you can afford it (unless the stuff is a true necessity like a car to get to work). The nicer TV or computer can just wait.
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Re: Besides your mortgage, Do you finance anything?
I always pay cash for the car. However, next time I'll ask about a discount for loan and pay-off as you did. I assumed you either negotiate a discounted loan rate or the equivalent in a cash discount.bearwolf wrote:I was able to get $2000 off of the price of my car by taking out a Ford Motor Credit loan. They wouldn't give me a better deal on the car if I paid cash. I took the loan and the $2000 and paid off the loan the next month. Does that count as financing?snyder66 wrote:This isn't really a pool. I'm just wondering how many people pay cash for everything and how many take out loans.
BearWolf
- TomatoTomahto
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Funny you should ask. We have always paid cash for cars, but we will be buying one shortly and might consider taking out a loan (and paying it back in February when we get a lot of bonus money). We have more than enough in taxable accounts, so we might also just cash in the necessary amount. I need to see if I'm going to incur capital gains taxes.snyder66 wrote:I guess what I meant is, Do you take out loans for anything? Cars, etc.
So, the answer to OP is generally not, but I might take out a car loan for the first time in around 40 years.
EDITED TO ADD: I should have said, also, that I would not take out a loan unless it was sure to be repaid in a matter of months (at most). At 0%, maybe for longer. BUT, even at 0%, it just feels so good to not owe anyone money that I might bypass the loan.
Agreed. I recently used a combination of a 401K loan and a HELOC instead. Only the 401K loan remains.Jerilynn wrote:I'm not sure how wise it would be to get an investment property loan nowadays.i<3Investing wrote:I have a college loan. Probably be looking for an investment property loan at some point in the future.
Everything else is cash or CC which is paid off each month.
- krantcents
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I put almost everything on a rewards credit card each month , but also pay off everything before interest is due.
House, cars, and everything is paid for. No debt feels good, and using a credit card makes for easy tracking of expenses
House, cars, and everything is paid for. No debt feels good, and using a credit card makes for easy tracking of expenses
If past history was all that is needed to play the game of money, the richest people would be librarians.
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The 3 cars I have bought in my adult life I paid for in cash. I paid off my mortgage in 9 years. I paid off my student loans in 2 years after I graduated from college. I rarely use my credit cards (only twice in 2011) and always pay them in full. I have no interest (no pun intended) for any of those cash-back deals for credit cards - I charge so little on them.
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Re: Besides your mortgage, Do you finance anything?
I had to borrow for college because I was 18 and didn't have any money at the time because I'd been in school my whole life. stupid truancy laws.
now I pay for everything (I mean for my wife) only after I've saved up. I made us save up before buying her iPhone, her Kindle, everything, even the fun stuff she deserves (apparently people buy these things because they deserve them-I don't exactly know what that means). her friends give her a hard time and think I'm too restrictive but she thinks her (low) six-figure net worth is pretty cool, considering her (our) upbringing. she's had a few friends stop speaking to her after she told them how she paid off all her credit card debt. I don't think she ever thought she'd be in this financial position, a position of strength. when you try to own everything and minimize debt, that's pretty cool, that you can have nice things (you deserve) but still retain a lot of personal financial strength. it's just a matter of not putting the cart before the horse.
now I pay for everything (I mean for my wife) only after I've saved up. I made us save up before buying her iPhone, her Kindle, everything, even the fun stuff she deserves (apparently people buy these things because they deserve them-I don't exactly know what that means). her friends give her a hard time and think I'm too restrictive but she thinks her (low) six-figure net worth is pretty cool, considering her (our) upbringing. she's had a few friends stop speaking to her after she told them how she paid off all her credit card debt. I don't think she ever thought she'd be in this financial position, a position of strength. when you try to own everything and minimize debt, that's pretty cool, that you can have nice things (you deserve) but still retain a lot of personal financial strength. it's just a matter of not putting the cart before the horse.
I think the Bogleheads represent a pretty special gene pool.snyder66 wrote:This isn't really a pool.
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Fresh out of college, I couldn't get a credit card because I had no credit. So I financed a new motorcycle. I paid it off in a couple of months. I was then able to get a shiny new credit card. I have never carried a credit card balance, though.
Other than a mortgage, which is paid off, I haven't financed anything else.
Other than a mortgage, which is paid off, I haven't financed anything else.
"Always do right. This will gratify some people, and astonish the rest." --Mark Twain
- FrugalInvestor
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I started out financing cars. Then I financed my home and autos. Then I financed only my home. And now I finance nothing.
We put everything on credit cards for the rewards but pay them off every month. I have never paid a credit card finance charge in my lifetime.
We put everything on credit cards for the rewards but pay them off every month. I have never paid a credit card finance charge in my lifetime.
Have a plan, stay the course and simplify. Then ignore the noise!
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Yes, other than mortgage on my primary residence, I did a cash out refi on my paid off second home to buy investment property. Now, I am in the midst of an investment property loan. It is only 3.875% for a 15 year fixed which is crazy for an investment loan.
Can you tell I want to take advantage of this lowest mortgage rates and low housing prices sweet spot?
I buy cash for cars and use credit cards paid off in full monthly for everything else.
Can you tell I want to take advantage of this lowest mortgage rates and low housing prices sweet spot?
I buy cash for cars and use credit cards paid off in full monthly for everything else.
- Steelersfan
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The last loan (besides a mortgage) was 15 years ago for some kitchen improvements and that was only because they offered two years same as cash.
Of course we paid in off right on time, two years later. I think it helped our credit rating as bonus.
No debt at all now since the last mortgage was paid off except credit cards that are paid off every month. I intend on keeping it that way.
Of course we paid in off right on time, two years later. I think it helped our credit rating as bonus.
No debt at all now since the last mortgage was paid off except credit cards that are paid off every month. I intend on keeping it that way.
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My credit union offers 2.49%, 84 months car loans. It doesn't appear impossible to "make the same %" nearly risk-less. If one wanted to make a bet on moderate (or higher) inflation, this would be quite rational. I think the bigger question is whether the loan would be used for moderate leverage or to buy a much fancier car than needed.Jerilynn wrote:I personally don't. You certainly can't invest the money and make the same % as a car loan.snyder66 wrote:I guess what I meant is, Do you take out loans for anything? Cars, etc.
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I'm not saying it's dumb to borrow at 2.49%, but how would you make 2.49% after federal and state income taxes on a ladder of riskless vehicles with maturities ranging from 1 month to 84 months?Wolkenspiel wrote:My credit union offers 2.49%, 84 months car loans. It doesn't appear impossible to "make the same %" nearly risk-less.
- zzcooper123
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Financed my vw gti @ 1.9% for 60 months and I get 3% interest from a rewards checking account. After fed and state it is about a .25% spread but i also maintain higher liquidity in case a new business/investment opportunity comes along.Bob's not my name wrote:I'm not saying it's dumb to borrow at 2.49%, but how would you make 2.49% after federal and state income taxes on a ladder of riskless vehicles with maturities ranging from 1 month to 84 months?Wolkenspiel wrote:My credit union offers 2.49%, 84 months car loans. It doesn't appear impossible to "make the same %" nearly risk-less.
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I try to manage my expenses by using my target investment drawdown e.g. each month I get a pension and take $x from savings for that month's expenses. When I have a large purchase e.g. a vacation, that I can't pay off with that month's income I use my home equity line (2.74%). I then use my regular checking to pay down that loan. (This wouldn't necessarily be my approach if interest rates were high)
This may not be the most cost effective approach but it keeps me focused on using my monthly income to live on rather than dipping into my other savings every time I have a big bill. Usually, I pay off the loan in a few months and it does not grow. This forces me to cut back somewhat on decretionary expenses until the loan is paid off. It works for me.
This may not be the most cost effective approach but it keeps me focused on using my monthly income to live on rather than dipping into my other savings every time I have a big bill. Usually, I pay off the loan in a few months and it does not grow. This forces me to cut back somewhat on decretionary expenses until the loan is paid off. It works for me.