Financing vs Cash
01-10-2008, 08:16 PM
#31
just run the numbers over the term and figure out which is better for you. ms excel has a spreadsheet that will calculate how much interest you will pay over the term if that's an issue.
but also consider what would you really do with the money if you dont buy the car. if it goes to restaurants and entertainment, then honestly, picking up equity in the car may even be worth the loss due to interest. if it goes into investments, plan it out and see. and consider why you're investing--for a house? for a cayman s? for retirement?
but also consider what would you really do with the money if you dont buy the car. if it goes to restaurants and entertainment, then honestly, picking up equity in the car may even be worth the loss due to interest. if it goes into investments, plan it out and see. and consider why you're investing--for a house? for a cayman s? for retirement?
01-11-2008, 07:28 AM
#33
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Originally Posted by sahtt,Jan 10 2008, 10:33 PM
I never said I didn't have a high credit score. A score of 0 simply means I don't owe anyone anything (on paper at least between financial institutions).
Before I got my house, I had zero debt - didn't owe anybody anything except for credit cards that I paid off in full each month. And I had a high FICO score.
So it's great to say you don't want to owe anybody anything. It's incorrect to say you want a score of zero.
01-11-2008, 07:43 AM
#34
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Originally Posted by sahtt,Jan 10 2008, 05:51 PM
I'm not much older than you but you've got a lot to learn. Anyone overly concerned with going in to debt with depreciating assets [large ones may I add] to "build their credit" is probably not quite a financial guru.
I don't give a $hit about my credit score and I'll be happy when it's 0. I have some college education on the matter but more importantly I graduated college with no debt, two newer sport bikes, and an acura integra gsr, while only working summers and christmas breaks. How you spend your money [I bought each of those to later sell for profit as #1 priority, not for fun or to impress girls] is just as important as your income.
I don't give a $hit about my credit score and I'll be happy when it's 0. I have some college education on the matter but more importantly I graduated college with no debt, two newer sport bikes, and an acura integra gsr, while only working summers and christmas breaks. How you spend your money [I bought each of those to later sell for profit as #1 priority, not for fun or to impress girls] is just as important as your income.
Your point??? Yeah some of us i guess were smarter when we were younger and some were pretty dumb (i was one of those 
)i went with my ctedit cars, shin shin shin there for got my self in debt, but have slowly got my self out of it. But w/e i still think that its smarter to finance (unless your rich ofcourse) than to buy cash, thats my point!!
01-11-2008, 08:08 AM
#35
My philosophy is I like to fund vehicles w/ cash, unless I can get 0% to low single digit rate financing (as w/ my Super Duke, 0%/no payments until June, and I'll pay it off then).
For other purchases I use credit cards wherever possible and liquidate the balance monthly to avoid interest charges.
The only "good" debt IMO is my mortgage, b/c it provides a nice tax break and was used to leverage an appreciating asset (the Austin housing market is relatively resilient vs. the rest of the nation).
First financial priority is for my wife and I to each fund $15.5k/yr. into our 401(K)'s, then fully fund whatever we can put into our Roth IRA's. Only after that and mtg. pmts. can I start thinking about buying depreciating assets.
For other purchases I use credit cards wherever possible and liquidate the balance monthly to avoid interest charges.
The only "good" debt IMO is my mortgage, b/c it provides a nice tax break and was used to leverage an appreciating asset (the Austin housing market is relatively resilient vs. the rest of the nation).
First financial priority is for my wife and I to each fund $15.5k/yr. into our 401(K)'s, then fully fund whatever we can put into our Roth IRA's. Only after that and mtg. pmts. can I start thinking about buying depreciating assets.
01-11-2008, 09:40 AM
#36
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Originally Posted by Chris S,Jan 11 2008, 09:08 AM
My philosophy is I like to fund vehicles w/ cash, unless I can get 0% to low single digit rate financing (as w/ my Super Duke, 0%/no payments until June, and I'll pay it off then).
For other purchases I use credit cards wherever possible and liquidate the balance monthly to avoid interest charges.
The only "good" debt IMO is my mortgage, b/c it provides a nice tax break and was used to leverage an appreciating asset (the Austin housing market is relatively resilient vs. the rest of the nation).
First financial priority is for my wife and I to each fund $15.5k/yr. into our 401(K)'s, then fully fund whatever we can put into our Roth IRA's. Only after that and mtg. pmts. can I start thinking about buying depreciating assets.
For other purchases I use credit cards wherever possible and liquidate the balance monthly to avoid interest charges.
The only "good" debt IMO is my mortgage, b/c it provides a nice tax break and was used to leverage an appreciating asset (the Austin housing market is relatively resilient vs. the rest of the nation).
First financial priority is for my wife and I to each fund $15.5k/yr. into our 401(K)'s, then fully fund whatever we can put into our Roth IRA's. Only after that and mtg. pmts. can I start thinking about buying depreciating assets.
01-11-2008, 09:50 AM
#37
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Originally Posted by Chris S,Jan 11 2008, 09:08 AM
My philosophy is I like to fund vehicles w/ cash, unless I can get 0% to low single digit rate financing (as w/ my Super Duke, 0%/no payments until June, and I'll pay it off then).
For other purchases I use credit cards wherever possible and liquidate the balance monthly to avoid interest charges.
The only "good" debt IMO is my mortgage, b/c it provides a nice tax break and was used to leverage an appreciating asset (the Austin housing market is relatively resilient vs. the rest of the nation).
First financial priority is for my wife and I to each fund $15.5k/yr. into our 401(K)'s, then fully fund whatever we can put into our Roth IRA's. Only after that and mtg. pmts. can I start thinking about buying depreciating assets.
For other purchases I use credit cards wherever possible and liquidate the balance monthly to avoid interest charges.
The only "good" debt IMO is my mortgage, b/c it provides a nice tax break and was used to leverage an appreciating asset (the Austin housing market is relatively resilient vs. the rest of the nation).
First financial priority is for my wife and I to each fund $15.5k/yr. into our 401(K)'s, then fully fund whatever we can put into our Roth IRA's. Only after that and mtg. pmts. can I start thinking about buying depreciating assets.
, but thats good because you make good money (from what you say atleast) not all of us here make good money, not now atleast 
01-11-2008, 10:30 AM
#38
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Regarding what to do if I had $20k cash and wanted to buy a $20k car... If that's ALL the cash I had, there's no way I'd deplete my reserve in order to buy a vehicle. What if I spent it all and a family emgency popped up that required $5k? I could get a cash advance on the credit card, or a personal loan somewhere, but the interest would be brutal. Instead, if I kept the cash and financed the vehicle, I'd have plenty of headroom for unforseen events, and if my savings goes up faster than the loan payments deplete them, I could eventually pay off the vehicle early and still have enough cash at hand for emergencies.
Alternatively, if I had $100k lying around, buying a vehicle for $20k cash is a no-brainer.
ps - the way I've heard it, put in to your 401k whatever is needed to max your company's match, then max out our Roth IRA, then put whatever else you have left over into the 401k.
Alternatively, if I had $100k lying around, buying a vehicle for $20k cash is a no-brainer.
ps - the way I've heard it, put in to your 401k whatever is needed to max your company's match, then max out our Roth IRA, then put whatever else you have left over into the 401k.
01-11-2008, 10:39 AM
#39
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Originally Posted by Elistan,Jan 11 2008, 01:30 PM
ps - the way I've heard it, put in to your 401k whatever is needed to max your company's match, then max out our Roth IRA, then put whatever else you have left over into the 401k.
But, I agree with you... I've always heard that you should take advantage of the free money (matching 401k contributions) and the tax shelter (Roth IRA) and then the remaining tax shelter of the 401k.
01-11-2008, 11:10 AM
#40
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Often times the maximum your employer will contribute to your 401k falls short of the maximum you can contribute. You can only contribute up to $15.5k and it is an IRS limit. Employers only match up to a dollar amount and it often falls short of $7,750.