Cash on the incremental road to h*ll plan for me. The only thing worse than blowing 80 cents on the dollar would be owing 80 cents on the dollar :eek:.

Cash for toys, period. No truck payments, no boat payments. I sure dont have the trickest shi+ on the pond, but I can sure relax when I decide not to use it one weekend.

Interesting question-
 

I'm a bit different than most.

I buy almost everything outright (quads,bikes- trucks, cars) & I have no debt aside from my house- and my new boat, I own the old boat outright and all other toys outright. Im a buy good stuff and hold it guy.

I have a "rule"when it comes to financing large non-deductible toys.

I can only buy them when I develop a NEW sustainable income stream double the amount of the liability- i.e. I use assets to pay for liabilities not "my own finances".

I could have written a check for the new ride -but why when the money is so cheap?

The amount of money I can make with the actual cash I have makes the interest part of the note a paltry if nonexistant sum.
Even if I let the money sit, I'm still making interest on the money.

This way when more investment opportunities arise I have the money to make the money.

No one "saves their way out of trouble" you earn your way out, and people just digging further into debt reaching into their savings are fools.

When it makes sense I ALWAYS use other peoples money.

As a previous poster says- the 300K in the bank looks pretty good now.


Uncle Dave

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I don't have the cash to buy so I speak in the hypothetical, but if I was sitting here with 100k in my pocket and faced with the decision on whether to invest it and leverage the boat, or just pay cash with the boat I think that my decision would remain to invest the money and use someone else's money for the boat. My equity Line is UNDER 4% right now and you get a third of that back at Tax Time. As far as I am concerned that is REAL cheap money, hence the reason my boat and all 4 cars are on it.

I sleep great at night - but since I'm young I would like to reserve the right to revisit this post in 10 years when my situation has changed and be able to pull the "I was young and stupid" card!!!

Cash for toys, cars, trucks, loans on home/rental property, that's how we roll in the Ferry household. I really don't like financing something that depreciates and has no tax write off on.

Interesting thoughts. Rates are very cheap on mortgages and HELOCs right now. But we could go back to the days of late 70's/early 80's when rates soared in short time. That saw huge jumps in interest charges for existing debts. Be careful, but have fun.

I like many of the posts about financing, but doing it well within your means. When i bought this Scarab in March '08 ( I stole it), I placed the money in a CD at the bank as collateral and used a loan. Then, when the economy really soured, I didn't want the payment anymore so I released the CD and paid off the loan. So I guess I dipped my toe in the finance water, but was glad I simply bought a CD and didn't have it in the market.

BTW< my speculative investment money was invested in a position offering 2x the opposite direction of oil.

I pay cash for toys. My toys are not on the level of alot of you guys, and I could afford alot more if I financed, but I don't have to worry near as much as my friends with payments on everything. My old lady lost her job and although the loss of income sucks, with everything paid for but the house, it doesen't greatly affect our lifestyle.

Mine is tied to Prime as most are, and realistically I don't think that the Fed is going to make money more expensive anytime soon. We know too much about monetary policy now. After the crash in 29 the Fed (ignorantly) raised rates, and lowered the money supply causing a further depression. We are smarter now knowing that in order to drive the economy into an expansionary period money has to be available, and that will keep rates low for the forseeable future. Another driver will be the scare of deflation, which will also keep the rate tempered for years to come.

Sure if it doubles to 8% in the next 5 years you are paying more money, but again, after taxes it is still just over 5%, and if they do raise the rate it will be during a time of inflation further dampening the "real" interest rate.

My HELOC has a minimum monthly payment of interest only, which is nice in case you had something catastrophic happen where you needed money and couldn't pay anything to principal. I think it is a great arrangement and having the toys makes the small amount of interest a non-issue to me especially when I'm ON the boat!!!!

Again - this is easily said by someone without the cash:cool:

Being comfortable with the method is the most important. I financed more than half of my little dinghy at 6.5%, but I have no car payments, and don't buy all the toys I want. Paying out 3500 smackers a month so the ex can live in a house I bough, but don't live in, plus child support, puts an automatic damper on my spending sprees. But that's for another 2 plus years, not forever.

My feeling is this, housing comes first, having no debt is golden. If you can afford a $200,000 boat, find one for half that, and sit on the rest. In this economy, it should wake people up to the fact that not getting sick when the mailman comes by is priceless. If you can't set aside $500 or $1,000 a month in a savings account now, IMO, you have no business buying a boat. And for all those twenty and thirty somethings out there, I know all too well how great it is to be able to get that shiny new toy. But a far greater feeling is to have a shiny new toy that you can afford, and not be sweating about bills when you're a fifty-something. Remember, we old guys boat too :cool-smiley-027: