rcooper

I will be taking my wife to all the retirement homes and pimping her out.

Fgalberts

Since I dont have a Wife any longer, or a dad to loan me $1M, I will just write a check.👌😁

449er

Lol, Nice!

GoldRose85

....actually this is a real possibility. We live in a rural area and while walking the dog. I met a older guy who walks two golden labs and he trained them to pick up cans and bottles
and bring them to him. He drives an old Chevy S10 pickup and he fills up the bed with the cans and bottles and turns them in for the bottle returns. He claims
that he gets about $100-$150 a week ! More in the spring after the snow melts ! So much for drinking and driving !

fasttoys

LOL If you can't afford it you should not do funny math and buy one. It is not worth the stress & it is a depreciating asset. I am very fortunate and even though I can afford 5X more than my build I budgeted no more than 80k before taxes for mine. My car came in lower. C8/Z51/2LT/FL and some other stuff

On another note, you can be like the rest of the population & be in dept. We have a rescission around the corner and the below people will be in a world of hurt for overextending their selves. Read below: If you live in America and you are in debt, you are definitely not alone.

The Federal Reserve Bank of New York just put out its latest quarterly report on U.S. household debt and found that Americans collectively owe about $13.54 trillion, an amount that has risen for 18 consecutive quarters and is 21 percent higher than the $12.7 trillion owed in 2008 during the height of the Great Recession.

Other key takeaways from the report

• Mortgage originations dropped to $401 billion from $445 billion, the lowest level in nearly four years. This is attributed to rising mortgage rates in the quarter.
• Mortgage delinquencies were roughly flat (1.1 percent had mortgage balances 90-plus days late).
• There were $144 billion in newly originated auto loans, continuing a nine-year growth trend.
• Auto loan originations totaled $584 billion in 2018, the highest amount recorded in 19 years of collecting data.
• Credit card balances rose by $26 billion to $870 billion.
• About 195,000 consumers had a bankruptcy notation added to their credit reports, down 5,000 years over year.

Among the more troubling facts from the report is the record 7 million Americans who are 90 days or more behind on their auto loan payments. It's a signal, economists say, that Americans are struggling to pay bills despite other indications of a strong economy and low unemployment. About 6.5 percent of all auto finance loans are 90-plus days past due.

Student loan debt edged higher, hitting $1.46 trillion in the fourth quarter, and serious delinquency rates in the category continue to be much higher than any other debt type.

Mortgage debt accounted for most of the total, hitting $9.12 trillion in the fourth quarter.

Krusty84

Not certain WTF a lot of you are thinking about with the "I make 7% so I will take a loan @ 2% on a heavily depreciating asset purchase" and somehow think you are gaming the system with 5% net gain.

IdRatherBGolfing

You must have a really high credit score.

Average Interest Rates by Credit Score

Credit Score Average APR New Car Source: Experian: State of the Automotive Finance Market Q4 2018. 781-850 4.19% 661-780 5.01% 601-660 7.91%

nh_mark

Well I guess I'm a fool and have been for my whole life. Thanks for pointing that out to me, I knew it was something that was keeping me awake at night. But you know what? In 100 years you and I will still be in the same place, literally and financially

-Mark

jamesampm

I get 1% loans so I would be a fool not to use them.

IdRatherBGolfing

Where are all these 0%, 1% and 2% loans??

1SG_Ret

Parents.

firstgear

Well, number 7 isn’t quite true. When a stock reduces its dividend never mind stops paying a dividend the market reacts negatively to that stock and its price per share will lose anywhere between 15-25%. So while you can get your money out, the total value will be reduced. Hence your offset savings in the interest rates just got torpedoed by the share price drop. Past performance is not an indicator of future performance.

its a crap shoot for sure, one that I will have to weigh as well. By the way, there are plenty of options for returns, PCN, PTY, MPLX, NLY.....you just have to look and decide your appetite for risk.

Quietbreaker

I do always love these journeyman finance advice threads. LOL

range96

I keep seeing 'depreciating asset' description making it a reason to finance vs. paying cash. Can someone explain it why it makes a difference if it is a depreciating or appreciating asset that you finance vs. pay cash for? I mean you're loosing money on the car in either way. It doesn't matter when you're paying for it. I'm not looking for an explanation of borrowing at 2% and earning 7% on investment, strictly why it matters that it is a depreciating asset.

Assumption: no current debt, would be able to pay cash

jcapps

Me too, now I know why people are broke. Using cash to buy something instead of letting someone else buy it for them (cheap money) and letting their money work for them

range96

Nice explanation. To make things a little worse, usually the share price drops first before the dividend goes away. And the drop could be 10% overnight without you being able to sell it in time. The reason for the 7% return is because of the higher risk.

ext

Please explain what you mean. It's not gaming the system. It's making a wise financial decision, again, assuming you're going to buy this depreciating asset either way.

Mrc100

I am sure getting a little nervous about pressures on the market though...although some of those wrinkles seem to be getting ironed out. Just not the easy call that it was in January 2019.

Warp Factor

If you dress up like Elvis, you can probably make a lot more money than your wife, since women far outnumber men in old-folks communities.
One theory for why men die sooner is:
"Why do married men die sooner than their wives?"
Answer: "Because they want to, hoping to finally having a little peace".

ext

It doesn't ... as long as it's a depreciating asset you would buy either way (cash or borrow). ie if you're having to borrow $ for the car, you're losing two ways: Depreciation and interest payments.

It's the same principal with a house, a generally acknowledged appreciating asset: If you have the cash to buy the house outright, but can get a mortgage at say 3% while your cash continues to earn say 7%, that's a smart financial move. Of course some people with the cash just don't want the hassle/annoyance of making payments, dealing with lenders, etc etc, so they pay off their house, and that's fine as long as they realize the $ cost of avoiding dealing with those things. Many see a paid-off house as a simpler, lower stress, sleep-well-at-night situation.