Jigsaw89

All my toys and vehicles are paid off, but some of them were financed at the time of purchase. I still carry a mortgage on my principal residence and rental properties. The bottom line is do what you are comfortable with b/c the issue of paying cash or carrying debt does not have a one answer fits all ending. As MDMark said, you only live once...

32fever

If you were financing and investing the money for the last 12 months, I feel sorry for you. You'd have been better off to pay cash for the boat. You can't invest at a fixed rate that earns more than your boat loan rate, so it's a risk. In good times, you do well, in bad times, it's a double whammie, investments tank and boat values fall. The guy that paid cash for the boat is much better off.

My issue is not the financing, but my incoming cash flow is too low. It is now and always will be.

VtSteve

And here I sit with credit card checks with Fixed 3.90% rate, no fees. I must remain diligent

Ironmanwb

Have the cash for the toy before you buy it but put that cash to work in a low risk investment account. Then use a HELOC or second mortgage and pay for the boat that way, you can use the intrest expense as a write off and you can still have the cash to pay it off if and when you want to.

In the mean time you have a boat that is not such a drag on your net worth.

Uncle Dave

Its all in HOW you invest and what you invest in.

I disagree you cant invest at a fixed rate an pay for the boat.

I agree you cant do it with interest on money or stocks (at least last year), but not if you invest in the right things.

You need to invest in different things than ordinary guys do.

Invest in assets people are willing to shell out hard cash for on a regular basis and you win.

Example-before I bought the new boat (Check it out in the Laveycraft forum) I made an investment last July of 120K in a piece of equipment that's returned 33K since. Try that with stocks or real estate.

I didn't buy my boat till the money started coming in from the investment- and I used some of my own money as a down and the cash flow from the investment now make the payments - not me.

A boat is not an investment its a liability squared. ( unless its a ferry, or a cruise ship that can generate cash flow)

If you paid cash you are out the cash and you have a boat you cant sell that's highly depreciated in one season. No thanks.

(ok a 20K boat I wouldn't finance but then I wouldn't buy a 20K boat either)

I have the cash flow to pay the boat, strippers, gas, insurance, booze, weed, new bikinis for the babe and then some without reaching into my own pocket.


Uncle Dave

Pete280

what's the piece of equiment?

Uncle Dave

Not going to give away my investment secrets, but I work in the production and postproduction business <TV& film> It is gear that services those markets.

I believe in having a few % of a bunch of different businesses.

2 years ago I went in with 3 other guys and bought (of all things) a concrete pump, it was about 100K and its been making money as well.

Equity lines are great for deductibility- but if you need to get off your house or get one now you may be challenged as many are up against the 80/20 equity ratio.

secondary positive cash flow is better- no compromises

Uncle Dave.

Pete280

sounds like you got a plan, I agree, keep the toys separate from the house, I have a couple rentals that when it's time to sell will finance my boat upgrade.

Quinlan

iTrader: (1)

Finance atmost half make double and triple payments and have fun! AND build a bigger TOY BOX!!!

Raylar

I think the key definition here should be that "ALL TOYS (even women) SHOULD BE BOUGHT WITH DISPOSIBLE INCOME" Whether or not that income is financed or cash is not the question or the answer. The income must be disposable and you must be able in all condtions to maintain that level of disposable income spending PERIOD!
If you use this philosophy you should in any ecomomy to maintain your TOYS and such (even women) you will do just fine!!
Keep it Simple!!

Best Regards,
Ray @ Raylar