- Joined
- Oct 12, 2016
- Threads
- 139
- Messages
- 2,544
- Reaction score
- 2,057
- Location
- Westchester, NY
- Vehicle(s)
- JLU Sahara
- Banned
- #31
Clearly debt, in and of itself is neither good nor bad. I'm not suggesting the only way one should be buying a rig is with money out of pocket after paying all of life's necessary expenses (highlighted prior.)
I am suggesting though, and again, it's not my talk, it's that of money professionals, that one should not be buying a rig unless they could do so with money out of pocket after paying all of life's necessary expenses.
The difference between the two is, as mentioned above, that if the prevailing rate at which institutions are willing to pay you for loaning them money is greater than that on a car loan (in which you are loaned the money at a rate you are willing to pay for having been loaned the money) then your best play is to finance the rig.
Doing so not only allows you to keep some of your cash for emergencies, but earns you a higher rate of return than buying the rig outright....
….of course so does, even more so, not buying that brand spanking new JL and taking the savings to investments.
And sure, there are those who, like soldiers discussed above, have just come back from a war zone, or sick owners without the greatest of health prognoses, or people living in the moment (saving too much is just as bad sometimes: as you can't "take it with you") that, as long as they do so in moderation make a decent argument for "you only live once."
Heck, just coming out of college?...take out a loan for absolutely no reason other than to pay it back on or ahead of time and establish a (good) credit rating.
But the sad thing is that some just don't get it. Their idea of affording is, "can I make the monthly lease payments without going (further) into debt."
And James @Turfman: you're right, speculate stock purchases over the short term certainly make the Wrangler purchase seem more palatable. But we should not be betting against the market, timing our entry and departure from this market, but rather sticking that $ in managed stock funds for no less than 5 years: the amount of time window the stock market has always been historically up within.
#financemustbetaughtinHS
I am suggesting though, and again, it's not my talk, it's that of money professionals, that one should not be buying a rig unless they could do so with money out of pocket after paying all of life's necessary expenses.
The difference between the two is, as mentioned above, that if the prevailing rate at which institutions are willing to pay you for loaning them money is greater than that on a car loan (in which you are loaned the money at a rate you are willing to pay for having been loaned the money) then your best play is to finance the rig.
Doing so not only allows you to keep some of your cash for emergencies, but earns you a higher rate of return than buying the rig outright....
….of course so does, even more so, not buying that brand spanking new JL and taking the savings to investments.
And sure, there are those who, like soldiers discussed above, have just come back from a war zone, or sick owners without the greatest of health prognoses, or people living in the moment (saving too much is just as bad sometimes: as you can't "take it with you") that, as long as they do so in moderation make a decent argument for "you only live once."
Heck, just coming out of college?...take out a loan for absolutely no reason other than to pay it back on or ahead of time and establish a (good) credit rating.
But the sad thing is that some just don't get it. Their idea of affording is, "can I make the monthly lease payments without going (further) into debt."
And James @Turfman: you're right, speculate stock purchases over the short term certainly make the Wrangler purchase seem more palatable. But we should not be betting against the market, timing our entry and departure from this market, but rather sticking that $ in managed stock funds for no less than 5 years: the amount of time window the stock market has always been historically up within.
#financemustbetaughtinHS
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