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When it comes to time shares, just say NO. I once went to a time share presentation for the freebies. I would rather be kicked in the groin area with a steel toed boot than go to another presentation.
Went to one in our mid-20's when we absolutely would not have qualified, and received our little portable propane grill. Then I said "NEVER again"--they just would not accept No! It was agony.
Paying cash isn't the best option though. Currently have close to 50k car note. The interest rate isn't spectacular at 4.5% but with inflation what it is right now also not terrible. I don't leave that kind of money stuffed in a savings account making .15% interest to pay cash. What I do leave in checking/money markets is an emergency fund, not my buy a vehicle mattress stuffing fund. I do have enough outside of tax deferred retirement accounts I could pay cash. Liquidating them to pay cash though isn't the best options.
Nobody needs a 50k car. It's a luxury purchase that you make because you can afford it and want to spend your money on it. I had my budget I was comfortable spending which really has nothing to do with affordability. If I wanted to liquidate investments I could have paid cash for a more expensive car and the amount that banks will lend to you is way more than I'd be comfortable with.
The problem with "cash is the best option" mentality for people who have to spend all their money is they still have to spend all their money. Rather than doing something financially intelligent, they're relying on really a stupid rule that limits how stupid they can be. That's dumb. If cashed out my non-tax deferred investments and drained my bank accounts, I could go pay cash for a 125k Lucid Air, Porsche Taycan, or Tesla Plaid. I have absolutely no business paying that much for a car. The reason I could is because I don't have the spend all the money mentality.
According to Kelley Blue Book and the Bureau Of Labor Statistics, the average new car price at the beginning of 2023 is $49,388!
Yes, that's how averages work. New my car stickered at just a hair under 70k,which is why I only looked at them after the used prices dropped. I don't want to spend 70k. I could afford it, either cash or payments, but not an amount I'd be comfortable with. Just averages. You take one 70k car that nobody needs and average it with something sensible like a 30k Camry hybrid. You know what you get? 100k/2 = 50k.
We know that new car buyers, both gasoline and EV buyers, are more affluent than the general population and more affluent than used car buyers,” Reichmuth said. Nearly half of all new cars nationwide are bought by households with incomes exceeding $100,000, according to his study based on 2017 data.
That's from 2017. Compare that with the 2017 ACS median household income being 60k whereas the median new car buying household was nearly 100k. That's why it's always amusing to me when you get the outrage over how much people spend on cars. I dunno, median now is probably something like 120-130k, maybe more with all the COVID wage inflation. I wouldn't be looking at 70k cars at 120-130k income. Maybe if you've got your house paid off and the kids are out of college, can't imagine doing it with mortgage/rent even being single.
Paying cash isn't the best option though. Currently have close to 50k car note. The interest rate isn't spectacular at 4.5% but with inflation what it is right now also not terrible. I don't leave that kind of money stuffed in a savings account making .15% interest to pay cash. What I do leave in checking/money markets is an emergency fund, not my buy a vehicle mattress stuffing fund. I do have enough outside of tax deferred retirement accounts I could pay cash. Liquidating them to pay cash though isn't the best options.
Nobody needs a 50k car. It's a luxury purchase that you make because you can afford it and want to spend your money on it. I had my budget I was comfortable spending which really has nothing to do with affordability. If I wanted to liquidate investments I could have paid cash for a more expensive car and the amount that banks will lend to you is way more than I'd be comfortable with.
The problem with "cash is the best option" mentality for people who have to spend all their money is they still have to spend all their money. Rather than doing something financially intelligent, they're relying on really a stupid rule that limits how stupid they can be. That's dumb. If cashed out my non-tax deferred investments and drained my bank accounts, I could go pay cash for a 125k Lucid Air, Porsche Taycan, or Tesla Plaid. I have absolutely no business paying that much for a car. The reason I could is because I don't have the spend all the money mentality.
I disagree. HYSA's are paying around 4.5%, while inflation is running at 4%, so it makes sense to pay cash. The reason why Ramsey says to pay cash is that people tend to overspend on cars when they finance because they only look at the monthly payment. If you have to fork over the entire cost of the vehicle all at once, you're going to spend less. It's psychological.
Most people (not you) buying 50k cars right now can really only afford a ~20k car comfortably. But they stretch it out into 7 years of $600/month payments so they can technically afford it. Those are the people Dave Ramsey is talking to. People living paycheck to paycheck, in debt up to their eyeballs.
People that have a need to spend all the money will spend all the money. They might spend less on a car by avoiding financing becasue they don't have the patience to avoid spending all the money for very long. They'll have spent it on new furniture, new counter tops, redecorating the bathroom, getting patio furniture and a new BBQ so by the time they get to a new car they might only be able to save up 5-10k for a decent jalopy since they've blown 50k over the last three years on other things with their compulsive need to spend all the money. Broadly that's two categories. People that spend all the money either have behavioral problems in which case no amount of financial literacy is really going to help and they really need to do counseling or just adopt some Ramsey arbitrary rules or they're just financially ignorant. Ramsey is for the ones with behavioral problems. The financially ignorant would be better served by actually learning about personal finance and making some financial plans and sticking to them rather than following Ramsey-isms.
Oh yeah, he's a genius. He tells people making 6 figures that if they will just cut back on luxury items they can save money and pay off debt. He's brilliant.
If caller are struggling on lower incomes (which is most of America), he tells them they have an "income" problem. His suggestion is often to just go out and get an extra job "delivering pizzas".
Apparently, delivering pizzas is paying very well these days. Who knew?
Also, be sure to pay cash for your car. Don't you know there are lots of great, reliable used cars out there for sale for $5,000? He says there is. I haven't seen such a thing in about 20 years.
Additionally, most people these days are not using credit cards for frivolous wants. They are using them for emergencies because years of stagnant wages have made it very difficult to build savings.
I think he is a snide sounding, out-of-touch jerk.
I now live near to a major city, so I'm unfamiliar with the "car market" here.
So I looked up "used car dealers near me" on Google, and found several in my suburb or very near by
These are NOT NEW car dealers selling used cars, they get the best to sell.
Not exactly the second rate used car dealers who take the 4-6 year old cars either.
They sell what other dealers won't want to sell.
Here's one I found in first ad, and I clicked the "cars under $5k" link, and here's one of several I found:
2012 Nissan Altima, 172k miles, list price? $3,995
Now,nits 'only' 10 years old, this is not a rust belt area, so still looks sharp.
I had a young coworker once who called to be late, her car died. I know she drove a Nissan Altima, unknown year.
When she (finally) arrived an hour and a half late, I asked her what failed on the car.
She said "oh it died, it's dead, no fixing it...it has 260k miles on it!!!'
So, yes, one CAN niy a car for $5k, not bad on age, and still with some hefty miles left in it.
So don't be so quick to be a nay sayer on cars...it just may not be a car you or I would consider buying/driving.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,113 posts, read 7,580,788 times
Reputation: 9850
Quote:
Originally Posted by carnivalday
For those of you who know about Dave Ramsey and dont care for him, and are doing financially great, this isnt for you. I just happened on this video on You Tube, and since I do enjoy listening to him, I watched it. One of his most inspiring speeches here.
Those of you who have some financial issues, who find yourself up against a wall, watch this.
Rhetorically,
If you need help, get it from someone who has the expertise.
The real question is, Do you Want the help.
It's DR job to make you Want that help.
All others, can take the lessons from the other's who either, Want, Need, or OK in their debt responsibility.
DR is a good motivational speaker; Which really is how he gets paid.
YSMV
{Personally, I can only listen to either SO or DR, just a few times before the message gets repetitious. We don't need the guidance but we understand many Americans do.}
Use common sense. Honestly, the majority of his advices are just plain old common sense. The problem is a lot of people lack basic common sense.
Common sense isn't always common!
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