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Yes, I'm okay with the credit card, primarily because I like the benefits that a credit card provides. But in terms of time spent, I only need to apply once and can keep the card for many years and never have to apply again.
Pay who? The deliver guy? Since when would you pay the delivery guy?
Its funny the way you guys think about risk/reward, you are doing things that have huge potential downsides (the prole taking your application does something bad with the information) to make very small gains. It really doesn't make much sense and its difficult to see how someone with money would do this sort of thing.
Also, I should remind that you claimed just a bit ago that you have no debt for your candy bars, yet now you have a loan for a big fat chocolate bar.
I handle everything on a net-30 basis, I find it easier to deal with everything on a monthly basis rather than pay here and there throughout the month for things like groceries. Technically this is debt, but it operates just like cash. A 6-month, 12-month, etc loan would not, it would distort your cash-flow.
And yes, my mental capacity is very limited, I'm not a super-human like yourself.
when i paid the merchant i bought the furniture from. sure, he could take our info and do something bad with it. i went to high school with him, and he's a family friend. so i doubt it. but yeah, it's possible.
and no, i have no debt for my candy bars. i have a 0% 6 month balance that the cash is sitting ready to pay off. someone has debt when they borrow money and don't have the cash to pay it back. again...you're extremely risk averse with your personal finances. that's fine, your prerogative. but why would i give someone my money today instead of 6 months from today, given the option between the two at NO COST other than the 5 minutes of writing down our name, address, and salary?
sorry you're not super human. i'm not either...just smart with my finances.
and 6 months, 12 months, or 30 days. it's all the same. you just choose to operate on a 30 day basis. you also said in another thread you don't understand how people could balance their checkbooks using online banking. so, do what's easier for you. but stop criticizing others that can handle money on longer term periods than you choose to.
and no, i have no debt for my candy bars. i have a 0% 6 month balance that the cash is sitting ready to pay off. someone has debt when they borrow money and don't have the cash to pay it back.
Huh? This is a ridiculous definition of debt, under this definition one doesn't have debt so long as they essentially have positive net-worth. Whether you have debt or not has nothing to do with whether you have assets (cash, or otherwise) that can be used to pay it immediately.
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Originally Posted by bradykp
but why would i give someone my money today instead of 6 months from today, given the option between the two at NO COST other than the 5 minutes of writing down our name, address, and salary?
Precisely because there are other costs....
Quote:
Originally Posted by bradykp
and 6 months, 12 months, or 30 days. it's all the same. you just choose to operate on a 30 day basis.
Except of course that its not all the same, as stated previously, the world operates on a monthly basis so aggregating your daily expenditures on a net-30 basis is very natural. Furthermore, psychologically the length of the debt is very important.
If you don't believe that debt is seductive in personal fiance, then I think you're a victim of its seduction.
Instead of deleveraging from your college-debt binge you have decided to double down, I took the opposite strategy.
you're assuming i don't have the money to pay for the TV out of pocket, and that i'm hoping i will be able to make the payments. i have the money. if something happens, i'd pay off the debt first. the money is spent, it's not for me to use elsewhere. that's the whole point.
I'm not assuming anything. Just measuring risk. Having the money today, does not guarantee you that you will have it tomorrow. Things happen in life that we cannot predict. When you borrow money for any reason, you increase risk and regardless of interest rate, borrowing is borrowing.
Huh? This is a ridiculous definition of debt, under this definition one doesn't have debt so long as they essentially have positive net-worth. Whether you have debt or not has nothing to do with whether you have assets (cash, or otherwise) that can be used to pay it immediately.
Precisely because there are other costs....
Except of course that its not all the same, as stated previously, the world operates on a monthly basis so aggregating your daily expenditures on a net-30 basis is very natural. Furthermore, psychologically the length of the debt is very important.
If you don't believe that debt is seductive in personal fiance, then I think you're a victim of its seduction.
Instead of deleveraging from your college-debt binge you have decided to double down, I took the opposite strategy.
i agree that the longer the term, the more dangerous it gets. and sure, many might not be able to handle the pyschological effects of a 6 month or 12 month grace period. and yes, just because i have cash to pay off the debt, doesn't mean it's not debt. but you're missing a key point about how i treat that cash - it's already spent. i don't count it as money i have. it's just in a place to pay off the debt. i recognize many people cannot stick to this. and sure, maybe i would fall weak to temptation one day....but i've done pretty well for myself managing my finances this way. i am paying off my college debt. i'm also enjoying a nice salary, in part at least, because of my college decisions. the amount @ 1.625% there is no reason to accelerate payment on that. the 3.5% amount will be paid off in the next year or two, depending on how i decide to use some of my finances right now. the 3% balance is debatable in my mind...i want to pay it off in an accelerated mannor, but i have not decided how accelerated yet.
I'm not assuming anything. Just measuring risk. Having the money today, does not guarantee you that you will have it tomorrow. Things happen in life that we cannot predict. When you borrow money for any reason, you increase risk and regardless of interest rate, borrowing is borrowing.
well, if something happens in life i cannot predict that would cause me to use cash i don't have...i'd have to use it either way. but i would pay off any type of "promo" debt i have used first, since the cash is already spent. i don't use these types of borrowing to be able to use the cash on other expenses. so, i'd have to come up with money by some other method if my emergency fund drained down after cutting all unneccessary expenses.
- it's already spent. i don't count it as money i have. it's just in a place to pay off the debt. i recognize many people cannot stick to this. and sure, maybe i would fall weak to temptation one day....but i've done pretty well for myself managing my finances this way. i am paying off my college debt.
How well you are doing in terms of your finances is a matter of perspective, but only time will tell which perspective is correct. Since we don't have a time machine and can't see the outcome of your current choices over the next 10~20 years, there isn't much to discuss in terms of how well managed your finances are.
And yes, you are paying off your college debt, but you are also acquiring new debt to replace it and that is the point of my comment. What you're doing isn't exactly novel and I've seen where it tends to lead, namely in divorce and bankruptcy. Its just a matter of how far down the rabbit hole you go....at some point you just can't get out.
How well you are doing in terms of your finances is a matter of perspective, but only time will tell which perspective is correct. Since we don't have a time machine and can't see the outcome of your current choices over the next 10~20 years, there isn't much to discuss in terms of how well managed your finances are.
And yes, you are paying off your college debt, but you are also acquiring new debt to replace it and that is the point of my comment. What you're doing isn't exactly novel and I've seen where it tends to lead, namely in divorce and bankruptcy. Its just a matter of how far down the rabbit hole you go....at some point you just can't get out.
Good luck.
but the "new debt" you're saying i'm acquiring is not purely debt. i don't borrow money i don't have to pay for furniture. i use attractive interest rates to allow my money to work for me, and then pay off the loan by the due date if it's 0%. much earlier if it's not 0%. the only new debt i've acquired that will remain for a substantial length of time is my mortgage.
you're saying we don't have a time machine...and yes...it's possible i may forgo my current principles and decide "this $1,000 i have in my savings account xyz is money i can spend"....so i see your point. but as long as i don't succumb to that, i am better off financially than otherwise because of prolonging letting go of my cash until i have to.
but the "new debt" you're saying i'm acquiring is not purely debt. i don't borrow money i don't have to pay for furniture.
We are back to the "its not debt because I have the money".... Its debt no matter how you want to slice it. You also have an auto loan, and I'm sure you'll get another one whenever your wife gets a new car.
My point is that you're piling debt upon debt, that is, you are highly leveraging yourself. But paying off existing debt before you taking on old debt would reduce your standard of living today...
Quote:
Originally Posted by bradykp
but as long as i don't succumb to that, i am better off financially than otherwise because of prolonging letting go of my cash until i have to.
The gain here is miniscule, yet the risks are high.
Anyhow, you are walking a tight-role, you have leveraged your finance to the point that even modest shock can do major damage. You have student loan debt, you have a highly leveraged home (i.e., small down-payment), etc.
We are back to the "its not debt because I have the money".... Its debt no matter how you want to slice it. You also have an auto loan, and I'm sure you'll get another one whenever your wife gets a new car.
My point is that you're piling debt upon debt, that is, you are highly leveraging yourself. But paying off existing debt before you taking on old debt would reduce your standard of living today...
The gain here is miniscule, yet the risks are high.
Anyhow, you are walking a tight-role, you have leveraged your finance to the point that even modest shock can do major damage. You have student loan debt, you have a highly leveraged home (i.e., small down-payment), etc.
my wife won't need a new car until the current one stops running. at 83,000 miles currently, and a honda engine in it...i don't foresee that happening for many more years. i'm not highly leveraged. accounting leverage is assets minus liabilities. aside from my mortgage and a small amount of my student loans, i have no liabilities that couldn't be covered by cash and fairly liquid investments tomorrow if i chose to do so. my P&I plus property taxes and insurance is less than 30% of my income. many americans can't even say that about just their P&I, let alone adding taxes and insurance into the equation.
i still don't understand why you think the risks are high. if i have $1,000 cash, and a merchant gives me the option of paying today, or 6 months from today...sure, waiting 6 months will only net me around $5-$10 in even a money market account. but that's $5-$10 i wouldn't have had otherwise. it lowers my purchase price to $995. why wouldn't i take the discount? because it takes time to write my name, address, income, and social on a piece of paper or type it into a computer? because my credit score in the high 700s will take a slight hit of 3, 4, maybe 5 points before recovering?
my student loan debt is being paid where it should be. i have 20% equity in my house. since when is that highly leveraged/small down payment?
my wife won't need a new car until the current one stops running. at 83,000 miles currently, and a honda engine in it...i don't foresee that happening for many more years.
Its not a question of what she'll need, its a question of what she'll want. At some point she may wonder why she is driving a piece of junk, while her husband is driving a new $30k car...
You're wife will be getting a new car soon....you can count on it.
Quote:
Originally Posted by bradykp
i'm not highly leveraged....
Of course you are...even without all the other debt your mortgage itself is too leveraged. 10% down is insufficient and only exists today because of subsidies.
Quote:
Originally Posted by bradykp
many americans can't even say that about just their P&I, let alone adding taxes and insurance into the equation.
Actually they can, anybody with a standard mortgage can say it. Not to mention the millions without mortgages.....
Quote:
Originally Posted by bradykp
i have 20% equity in my house. since when is that highly leveraged/small down payment?
Its been funny watching you distort your numbers into a more positive light when posting to me, but lying to me won't change anything. The fact that you're doing it is rather telling though...
As I said, good luck, if you continue along this path you'll need a lot of it.
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Not so #2
