He asked for advice on the cars themselves, if anything. Closed mindedness and ignorance of present/future value is not wisdom.Quote:
Originally Posted by maTT
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He asked for advice on the cars themselves, if anything. Closed mindedness and ignorance of present/future value is not wisdom.Quote:
Originally Posted by maTT
Close mindedness, good point. Are you referring to our current culture of NOW NOW NOW, finance and pay for it later mindset that we are all taught in our undergrad studies? Tyler, open your mind and run the numbers to look at opportunity cost. Find out how you could make that money work for you in other areas (paying off the mortgage, paying off those student loans etc.) Take a look at what the money spent on a new car now could equal if it's invested into your kids future instead. The finance companies would not be interested in your business if it was free.
Why am I such a party pooper? Because I've made these mistakes and learned my lesson. Tyler is a nice guy with a nice family. I wish someone would have given me this advice 10 years ago.
Tyler did graduate work/TA that paid for his...screw it, nevermind.
Jeremy
Since I'm one of the older farts around here I'll drop my experience on this. For the most part I've been conservative with money but the few times when I've leveraged my investments it has bitten me with losses. Assuming you have cash to pay for something and you choose to finance instead you run the risk of squandering the capital or returning less than you are paying in interest. That said, the SP500 has returned on average more than 8% a year over the long run so IF you're disciplined in keeping an allocation in stocks / bonds that is age appropriate then you should be ahead compared to the 3% car loans you get these days.
BUT, if you're a gambler and can't help but buy individual stocks with your money you will probably get burned. I survived a few of these events but it took me too many years to realize that slow and steady wins the financial race.
Matt,
No car is justifiable when you compare it to an actual investment. It's about balancing happiness and pragmatism, something you admit you've been incapable of doing... And don't make the mistake of paying for your kid's higher education. At most, match the loans they take out so they have skin in the game.
...But you seem motivated. Why don't you tell me what the inflation rate would need to be for the bank to break even lending me ~$15,000 @ ~1.2% APR for ~30 months. Maybe tomorrow we can compare answers and draw conclusions ;)
Just using the numbers from the loan we just took out
$16.5K @ 1.3% (+~$300 finance charge), 30 months
@ 2% inflation, this loan costs me $413 (present value of future series of payments + finance charge - $16.5K)
@ 3% inflation, this loan costs me $198
@ 4% inflation, this loan costs the bank $13
10 yr avg reported inflation = 2.42%
5 yr avg reported inflation = 1.80%
2 yr avg reported inflation = 2.35%
So yeah, this loan will probably cost ~$300.
dont forget 45 cents for a stamp every month. USPS got their hand in everything!
Stamp? Pay it online. :)Quote:
Originally Posted by vroom4
-John
which cars did you test drive already?!
WRONGQuote:
Originally Posted by Granny
Karen, im not attacking you :) But please be informed, anybody thats reading this:
I paid cash for my house, vehicles, everything. I have honestly NEVER used credit for anything.
All is paid for in full; I own all my junk.
And I cant get a loan.
So, Credit is king.
Oh and Tyler, I just bought a 78 Trans Am with the 400ci engine in it. Definitely something to look into ;)