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Okay, my situation is that I own a $300k house, I have a little more than $1.2 million in investments, and our family income is in the mid six-figures in a fairly low-cost region of the country far from places that see frequent natural disasters. I don't think there are many emergencies that would chew through that money quickly, other than medical, which is why we have excellent insurance, or complete and utter failure of the markets.
I don't think I'm taking on unreasonable risk by paying for my house. And I think I'm doing a more than adequate job of preparing for retirement.
Although you don't give your age (Based on $1.2 million, I'd say you're in your mid 30s), I'd pretty much agree that you are just fine.
But paying off your house was neither a wrong or right decision. One could argue so many ways whether it was the best decision or not. But as long as you could afford to (which it looks like you can) and it gives you peace of mind, excellent!
honda's reputation has been tainted by recent recalls to the civic, recalls on the accord, etc etc. so really, people are paying a premium for hondas because of a perceived benefit that isn't actually true. so, honda is a luxury good.
I guess you missed the part where I said just this?
Quote:
Originally Posted by bradykp
you're trying to sell the idea that it's just branding, when that is factually incorrect.
Again not listening, which is probably something you should do when you are suggesting someone is wrong.
You are talking about complete price discrimination and I never suggested that is what is happening here, in fact I explicitly stated otherwise. What happens with automobiles is premium pricing, that is the manufacturer will add some additional features and package the car differently but the added price is well more than the marginal cost to added these features.
My claim again is that buying products with premium pricing is wasteful. Despite the fact that you seem unable to grasp it, this has a concrete meaning in pricing models.
What I'm saying here is entirely mundane in the business world, it wouldn't even raise an eyebrow...
It started because someone said that taking on debt is basically stupid. I explained a scenario where my credit union offered me a low rate on a car loan for a car that I was purchasing for my father. I financed 25% of the car at 2.15%, put 75% down. (There's more to it because the car was a capital expense for business, etc... but that's not applicable here).
user_id attacked me saying I purchased a car that I couldn't afford and it was a waste to buy a car that costs more than what he would spend, etc.
What the whole point was that taking on debt is just fine as long as you dont overexpose yourself.
I tried to wing the discussion back to debit vs credit card, but that failed.
hahaha. better clarification them me.
yeah, this one has gone way beyond debit vs credit.
The reason I paid off my house is because I committed to a 15-year mortgage schedule when I purchsed my first home right out of college. I've moved several times since then, but no matter how expensive the new house, I stuck with the original schedule.
This is precisely what I suggested earlier, but the debtors-anonymous crowd didn't like it. I've seen far more people ruin their financial lives by not respecting this principle than I have seen people benefit from letting the "cash work for them".
I guess you missed the part where I said just this?
Again not listening, which is probably something you should do when you are suggesting someone is wrong.
You are talking about complete price discrimination and I never suggested that is what is happening here, in fact I explicitly stated otherwise. What happens with automobiles is premium pricing, that is the manufacturer will add some additional features and package the car differently but the added price is well more than the marginal cost to added these features.
My claim again is that buying products with premium pricing is wasteful. Despite the fact that you seem unable to grasp it, this has a concrete meaning in pricing models.
What I'm saying here is entirely mundane in the business world, it wouldn't even raise an eyebrow...
no, i saw that you said that about honda. but it was part of the overall point i was making, that to some people a $25,000 car is luxury, with no tangible benefits above their $15,000 car, or even, their $5,000 used car.
i am listening. i just don't agree with you. now you've switched from "luxury" to "premium pricing". sorry, but if i want a better stereo in my car because i drive 25,000 miles per year, and i choose to buy a car with that stereo, i didn't waste my money. you're saying that buying a car at $20-$30k has no "premium" pricing in it? that's the level of car price you've deemed as "not wasteful". yet, that price point would definitely be premium to a lot of people i know.
one man's premium is another man's normal. that doesn't mean that one man wasted money. in your opinion, it's wasteful. but in someone else's opinion, your normal is wasteful. yet you don't understand that. i fully concede that i bought more vehicle i need. all i need is 4 wheels and an engine that will get me back and forth to work. i could have bought a 15 year old accord, that would surely last many 10s of thousands of miles. but i can afford the car i wanted, with some of the creature comforts i wanted. NJBest can afford the $67,000 car. and wanted it. maybe that's wasteful to you. that's fine. that's your opinion. but you can't seem to acknowledge that a $25,000 car is wasteful to a lot of people in this country. jansport is a name brand backpack, there are plenty packs out there that are half the price, or even better. there are also plenty of people who can't afford to buy a jansport pack. but that doesn't matter to you. your normal is what you see as the normal for everyone. you can't open your eyes to the world outside of yours. i am willing to bet you buy a lot of things that some people would call wasteful. doesn't make it wrong, because it's not wasteful to YOU. and that's all that matters.
if people paid more than is necessary, then i'd say yeah, they wasted money. maybe NJBest didn't negotiate. maybe he walked into the first dealer he saw, no research, and paid the MSRP on that vehicle. in that case, i'd say he wasted some money. but, maybe he did that because his time was more valuable than the time it would have taken to negotiate a savings of $1,000 off MSRP? then, maybe, he didn't waste money. all of this is hypothetical of course.
but back to why people use check cards. i guess you've answered this question by displaying your own biases. people use checkcards because to them, having a credit card is potentially wasteful.
i'm fine with people saying they forgo a credit card because they won't stick to their budget.
i like the response about not wanting a company to know every single item they've purchased.
both of those seem logical to me.
but, since i don't care what people do with my transaction data as long as it doesn't compromise my security, i'm ok with the history being known to amex. i'm ok with them even sharing my history with business partners. especially if it benefits me.
also, since i don't spend more than my budget, regardless of whether i pay cash, debit, or swipe my cashback amex card...i'm choosing amex over debit.
i too have tested the cash only method. but since i tie it to my budget, which i get alerts when i'm close to my monthly budget for each category, my spending didn't change. if i want to spend less, i can adjust my budget for each category down, put more in savings, and see if i'm happy with that lifestyle.
i'm actually contemplating going for 6 months with only stuff i "need/slightly want" to spend. the reason why i go beyond needs is because i don't need cable, but i can't cancel it or i lose the price i get (which will be impossible to ever obtain again due to special circumstances), plus i want it. i don't need a cell phone, but i want it. but, i definitely don't need to eat out as much as i currently do, but my wife wants to. so that's a budgetary battle on the proportions of social security at the fed level (kidding, slightly).
This is precisely what I suggested earlier, but the debtors-anonymous crowd didn't like it. I've seen far more people ruin their financial lives by not respecting this principle than I have seen people benefit from letting the "cash work for them".
so would you advise me, with a 3.875% APR, to pay off my mortgage as soon as possible? i realize it is a cost, even with the tax benefits. but you can reduce that 3.875% by some amount, i'd have to calculate exactly what (beyond the standard deduction, what am i saving) since i don't remember it off the top of my head...but it's pretty close argument i think to not pay off early, at least in the 1st quarter of the loan term, due to this pretty great rate i have. that being said, i'm not 100% convinced that i definitely should not pay it off early.
Nope, again, I've tested it and always pay off the balance to prevent myself from building up debt. This is a case that is pretty easy to test, but other issues are far more difficult to test. I'd much rather assume that I'm susceptible to corrupting involves than assume that I'm not... Again, not something you have to worry about because you're super-human.
So what you are saying is you are both superhuman? I mean how else are you able to not succumb to building up debt?
no, i saw that you said that about honda. but it was part of the overall point i was making, that to some people a $25,000 car is luxury, with no tangible benefits above their $15,000 car, or even, their $5,000 used car.
You keep focusing on your strawman instead of what I'm actually saying. I'm not use a relative definition of "luxury" like you are, instead I'm talking about products with premium pricing. Again, this has a very concrete meaning, there is nothing relative about it. What you are talking about are essentially income limitations which has little to do with what I'm talking about.
In terms of switching terms, yes, I did switch to a more precise term so it couldn't be manipulated. But my intention is the same with both words, I'm just trying to avoid the little equivocations games you're trying to play. But I see that you're now equivocating the term "premium", again, the phrase "premium pricing" has a concrete meaning that I supplied to you. You can look it up as well.
The only thing that is relative here is the degree to which the "premium" hurts your budget. That is, someone with a net worth of $100 million isn't going to notice the $20k~$30k he wasted on the $70k car that much, on the other hand your typical middle-class buyer (which is the majority) will.
Quote:
Originally Posted by bradykp
i guess you've answered this question by displaying your own biases. people use checkcards because to them, having a credit card is potentially wasteful.
Which is something I acknowledged many pages ago, that is, for some the rewards may not offset the added spending the credit card induces. I have great respect for people that don't use credit cards for this reason, they are demonstrating great self-knowledge.
In terms of buying what you "need", I'm in no sense suggesting that people only buy what they need. Instead they should buy the things that gain them the most value, but determining this requires a sort of self-reflection and self-honesty that most seem incapable of.
so would you advise me, with a 3.875% APR, to pay off my mortgage as soon as possible? i realize it is a cost, even with the tax benefits. but you can reduce that 3.875% by some amount...
At 3.8% its likely an ARM so yes I'd suggest that. But even if its a fixed-rate I'd suggest paying it down on a 15-year schedule and never resetting it.
But it also depends what else is going on financially as well. For example, if you don't have much in terms of net worth then it would make sense to build some net-worth else where before you aggressively paid down the house.
Instead they should buy the things that gain them the most value, but determining this requires a sort of self-reflection and self-honesty that most seem incapable of.
And what exactly makes you qualified to make this statement?
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