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I spent way too much money on a new car last year. About $35k for my fully optioned 2018 Accord and my payment is $554 for 60 months. It was my first new car purchase. And probably my last.
I realized when I bought it that it was a bad financial move, but I'm going to enjoy all the gadgets and creature comforts for a decade or more, and thankfully, half of that time will be without a car payment.
Thankfully about 6 weeks after buying the car, I got a raise which puts about $300 extra take home pay in my pocket so the car payment is much more manageable now.
And hey... since I'm getting used to living pretty cheaply, just imagine how easy it is going to be for me to save money in years 6, 7, 8+ when the car is paid off
Cash is always the way to go assuming one has the cash. If they don't...well, far be it from me to lecture people on finances. I'll let Suze O and others do that.
Good call on not lecturing people on finances because you clearly don't really understand what you are talking about.
Because they aren't going in debt? That would seem to be an important issues...but I guess it has went by the wayside these days.
In the olden days we didn't buy things we couldn't afford and we surely didn't pay "interest rate games" thinking we could "make money" by borrowing low and investing high.
Some people do the I’ll buy this as long as my investments pay that. My only question is what happens when your investments don’t pay that? Either way it doesn’t matter to me. About the only thing that’s gonna happen is I’ll get a good deal on a guy who just bought a car and needs to unload it because the economy hit him in the face like a brick and it got repo’ed and the bank wants to dump it.
I remember back in 2009 I bought this 24 foot boat that would normally sell for 25k for 7,000 bucks. Dealer was desperate to unload boats. They went out of business. I bought a ton of inventory which I later sold for about 3x what o paid for it. I had to get some work done to that boat but overall I made out. The marine mechanics were starving too. I had a full remodel done at my house which would cost about 70k for I think 35,000. Complete remodel the whole house. Contractors were begging for work. I couldn’t touch that remodel today for less than 75/80k.
This is why you don’t go in debt like a idiot. If your wallet has horsepower buy away my friend. If it doesn’t dont be a idiot. Buy within your means.
I spent way too much money on a new car last year. About $35k for my fully optioned 2018 Accord and my payment is $554 for 60 months. It was my first new car purchase. And probably my last.
I realized when I bought it that it was a bad financial move, but I'm going to enjoy all the gadgets and creature comforts for a decade or more, and thankfully, half of that time will be without a car payment.
Thankfully about 6 weeks after buying the car, I got a raise which puts about $300 extra take home pay in my pocket so the car payment is much more manageable now.
And hey... since I'm getting used to living pretty cheaply, just imagine how easy it is going to be for me to save money in years 6, 7, 8+ when the car is paid off
Take a chunk of that $300 and apply it to principal. Pay off the loan early.
Of course smart people did this. It's one of the oldest ways to make money.
Interesting - since most of the people I know who did it aren't wealthy.
It's another of those "anecdote" things where "I know someone who did it", but in the end it doesn't or it can't work out. Wealth is created by providing value...goods and services. Banks can make money from money...but it takes a lot of millions and super-conservative policies to do so (and guarantees from the gubment as well as a big spread)....
Stories abound about all the people who made money....but the uncounted tens of millions who suffered due to it (Great Recession, etc.) when the music stopped...you don't hear their stories much.
Good call on not lecturing people on finances because you clearly don't really understand what you are talking about.
Entertaining. But not much information there. People who assume high debts are not smart. Like Trump and Kushner and their friends who took your advice and ended up with a negative net worth even after screwing tens of thousands of people, taxpayers, contractors, investors, etc......
Folks like you often chastised Apple for holding 10's, then 100's of billions in CASH. This has never really been done in history. After all, they could have borrowed all the money they wanted at low interest rates.
But maybe Jobs knew a bit more...had a bit more common sense than most?? And, just by chance, his company became the largest public Company on Planet Earth.
Thanks, but I'm emulate Apple and Buffets way and leave the Trump Flippers and Debtors to their boom and bust. The turtle with sense will always beat the hare (Trump would have 100 Billion if he invested with Buffet).
Anyway, we agree to disagree. The proof is in the pudding and if you started with nothing and retire early with financial security then who is to argue with your way. Write a book...
Me? I make money the old fashioned way. I earn it. I know....weird.
You will never explain this to some people, they have it is their mind what it is, and that is that. They are essentially maybe not financially illiterate, but wealth building illiterate, and care not to learn, even when broken down to 3rd grade math. Wave the magic the little stick that says "payments" on it, and that is what they are fixated on.
Same with the credit card debates we see, some people cannot wrap it around their head and understand about the various reward cards out there.
1. If you have to "make money" from credit card rewards, you are in trouble before you start....that is, the difference between one and other other is so tiny as to be a joke. Get a gas card or an Amazon card and be done with it.
2. The way to create wealth is to create it....not to think that you have "made" it because some Bank decided to give it to you in credit card rewards or some car company gave you loss leader monthly payments.
3. Frankly, if a person even has to consider the "extra money" they are making from a spread based on 20K or 25K they didn't fork out for a car, they are in the T-ball league anyway.
Much of this reminds me of the same folks who said people who paid extra in fed taxes and got refunds were terrible money managers. To see how much I lost I checked my return.....wow, I "lost" about $30 lending the government too much money.
Look around - I'll bet dollars to donuts most of these financial wizards don't drive 40+ MPG vehicles and don't live in super-insulated houses with 20 SEER A/C and heat pumps.
Clipping coupons and trying to make money off a spread might be fine for those who aren't paying the bills, but it's not the way to create financial security. Doing that requires....well..actually doing things.
Of course, these fake low interest rates that allowed some to "work the spread" also kept many tens of millions from making money off REAL savings that they had WORKED FOR their entire life. Really good advice is when something works for the whole system, not when some folks pick up the crumbs after the house has burned.
Some people do the I’ll buy this as long as my investments pay that. My only question is what happens when your investments don’t pay that? Either way it doesn’t matter to me. About the only thing that’s gonna happen is I’ll get a good deal on a guy who just bought a car and needs to unload it because the economy hit him in the face like a brick and it got repo’ed and the bank wants to dump it.
Yeah, like ask GE Financial and Lehman Brothers and Trump and millions of others how well their projections worked out.......
Some of these dudes actually think they are smarter than....GE Financial was. They are Masters of the Universe...Bonfire of the Vanities!
I also bought a boat in 2008 and, in fact, it WAS GE FINANCIAL that told all the dealers that were floor planning boats to dump them at ANY price. Such a deal - about 50% for a brand new sailboat and the maker was in business too!
I've been a working adult since the 1970's Nixon Shocks and the Oil Crisis - seen a LOT of recessions and destruction of wealth. What seems like a sure thing one day changes quickly....and becomes hopeless.
Goodness, the financial literacy hurts, painful, lol.
You have a 401k? Mutual funds? Any retirement investments?
You seem to be fixated on "did it make me a million dollars this year". Sorry, the process of building wealth takes places over many years, using techniques such as making money work for, cash back savings, numerous things, feel free to browse the frugal threads.
You obviously have zero clue about it, so no use even discussing, if you cannot understand 3rd grade math calculations that clearly demonstrate the financial gain, there is no help for you. If you feel like paying 2% more for your purchases over decades, by all means, forgo the tens of thousands of dollars in savings you would have.
Do not worry though, your logic is not rare, I work in the financial sector, I once dabbed in personal finance, and wealth build illiteracy is not uncommon, many are even mystified by concepts of compound interest, APR, etc. And they have zero concept of the big picture, the 10, 20 year out picture, their minds are like infants, that want it now, and if it does not make it now, they have zero interest in it.
Cash is always the way to go assuming one has the cash. If they don't...well, far be it from me to lecture people on finances. I'll let Suze O and others do that.
Completely NOT true!
My safety nets are as follows:
$300-500+ in my wallet at all times 0% interest...immediate emergency funds in case I end up not being able to use my rewards cards as has happened in past with a tow truck/hotel bill or even the gas pumps when their computer went down...they still accepted cash.
$1,000-3,000 cash at home...0% interest. Same emergency buffer...covers home emergency repairs when they don't take cards or give discount for cash.
$1,000-2,000 in each checking so never any overdraft if I make a mistake 0% interest.
These sums don't get me anything except less stress and peace of mind...well worth it IMHO.
Then I have My Emergency Savings which is between 20-80k 2% interest.
I continually place money in each category hence the varied sums. When I hit the high mark on one, I drop it to the low mark and put the difference in the 2% account. When the 2% account hits it's high, I drop it to it's low and invest the difference in a much less liquid but higher interest investment.
My sums are probably pretty low compared to most but I'm just a single guy with no kids or family so my needs are much less than someone who has both. I also have pretty simple tastes and don't require much, don't go out, drink, gamble (I DO buy PB tickets ) or blow it on phones, tattoos hip clothes or anything like that. My vices are tools, guns, art supplies and my car.
FWIW, I'm a mild prepper too...which is paying off right now. I just had surgery, am out of work yet do not need to run anywhere because I have everything I need here...I need to rotate stock anyway so it's all good. I'm NOT a doomsday type prepper.
So, basically, calling people like me an imbeciles for letting FCA give me a free loan is pure ignorance! Why wouldn't I take advantage of that and keep my interest going?
Rewards cards....heck yeah! Every bill I have gets paid by different rewards cards then they get zeroed out every two weeks or so.
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) or blow it on phones, tattoos hip clothes or anything like that. My vices are tools, guns, art supplies and my car.
