What kind of math is that???Originally Posted by MILD THUNDER
First, you are presuming that you've gotten a 100% loan on the Outlaw. Okay, I'll go with that...
A $50k loan at 6% is gonna give you a 15 year term with $422/month payments.
Keep it 2 years, payment total is $10,126. Payoff balance is $45,627 (not $40k).
Sell it for $45k. So it cost you more like $10,500. Sounds like a 50% increase in net outlay to me (7000 + 3500 = 10500). Maybe that sounds the same to you.
The simple fact is that paying cash for things and owning them helps you keep control over where your money is going. If you have $150k in the "bank" and you are trying to decide whether to cash it out on a boat or get a loan for the boat, then you're using some pretty weird logic in the first place. Why's it in the frickin bank? At 1.2%? Why isn't it being shoveled as fast as you can into a tax-sheltered retirement plan or into something stable like real estate? It's just sitting in the bank? Why isn't it going to pay down the house (unless you got one of those 4.7% 30 year fixed loans)?
People who hoard cash and finance things like cars and boats ? I don't get it. Call me weird.
It's one thing to talk about financing something you don't have the resources to pay for. That's what credit is for. But to finance something that you have cash sitting in the BANK for? I don't get it.