Has anyone Refinanced boat lately?
12-03-2003, 10:55 PM
#11
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Depending on your income bracket with $5,000 in interest you could save close to $2500 dollars in taxes. Then let's say you have $100,000 invested. Unless you have a real idiot handling your money you will come out on the good side.
If you have to finance it for 15-20 years to afford it you probably don't need to buy it, but to each his own. The majority of people financing it for this amount of time don't have to.
As for the tax deductible part you should always consult your accountant BUT if it has a place to sleep (V-berth) a place to take a dump (porta potti will do) and a way to prepare food (a 110 plug in to add a microwave if audited) it meets all of the IRS standards as a second home.
If you have to finance it for 15-20 years to afford it you probably don't need to buy it, but to each his own. The majority of people financing it for this amount of time don't have to.
As for the tax deductible part you should always consult your accountant BUT if it has a place to sleep (V-berth) a place to take a dump (porta potti will do) and a way to prepare food (a 110 plug in to add a microwave if audited) it meets all of the IRS standards as a second home.
12-03-2003, 10:56 PM
#12
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Originally posted by 29 OUTLAW
...Take the cash you would otherwise spend on the boat and invest it. ...
...Take the cash you would otherwise spend on the boat and invest it. ...
Better argument would be to buy boat for cash and then make monthly investments into a fund equivalent to what the monthly payments would have been - dollar cost averaging investments...
Hey - I'm not perfect with regards to my money management. I just have a hard time reconciling the prudence of long term financing for toys - and I do really like toys ...
My mutual funds made a lot of money over the past 15 years - unfortunately they have also lost a lot of money over the same period. Market looks up right now, but what if Dean et al assume the office?
12-04-2003, 12:59 AM
#13
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People afford what they really want. Its all about priorities.
As far as being "Upside Down," I'm not and never have been. Being upside down is a revolving circle and once you get that way, its tough to get out. It'll happen easiest when you keep buying new. Buy used and let others take the first 2 yrs depreciation which is generally the largest.
BTW, 3 boats ago I used to think the same thing. Now I the only interest I pay is tax deductible. A 5% loan that is deductible is only costing you about 3% after the tax break.
As far as being "Upside Down," I'm not and never have been. Being upside down is a revolving circle and once you get that way, its tough to get out. It'll happen easiest when you keep buying new. Buy used and let others take the first 2 yrs depreciation which is generally the largest.
BTW, 3 boats ago I used to think the same thing. Now I the only interest I pay is tax deductible. A 5% loan that is deductible is only costing you about 3% after the tax break.
12-04-2003, 07:50 AM
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I am with 29 Outlaw and others. I use my (cash) somewhere else to make money. I also deduct the interest on my taxes each year. I had 1.9% for 2 yrs so I paid alot on my principle during this time. My rate will go to 7.25% in Feb. and I think I can get a better rate than that, therefore a cheaper payment.
Reddog if you did this you might be able to get into something bigger than a 22' Donzi.
Thanks for the info. everyone!
Reddog if you did this you might be able to get into something bigger than a 22' Donzi.
Thanks for the info. everyone!
Last edited by bikinilover; 12-04-2003 at 08:00 AM.
12-04-2003, 08:59 AM
#15
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No one mentioned the time value of money either. The $50,000 you plunk down today (or borrow) is worth a lot more today than it would be 5-10 or 15 years from now. So when you figure I can borrow the money today at say 5.50% and repay it with tomorrows and next month and next years less valuable money..and so on plus deduct some of the interest then it starts to make more sense.
If you have a boat that qualifies for a second home but is paid for I am OK with that as long as you don't owe a dime on a car, credit card or other non deductable item. If you do then your money management is poor unless you are not able to itemize your deductions. Also you should not criticize anyone for how they handle their finances until you are ready to open up your own financial statement for criticism...like where do you spend your disposable income? Do you smoke? Drink? Eat out a lot? Nudie Bars? Gamble? Buy the current trendy clothes? Trade cars often? Lease a car? Get a $50 haircut? Travel a lot? Take expensive vacations? Have to have the latest technology? Buy Steaks instead of hamburger? Go out to movies instead of renting them?
Maybe some people would say that if you do those things you are throwing your money away. Some people might want to pay a little interest with their disposable income and enjoy a "toy" rather than do those things. It's all where you want to spend your disposable income.
If you have a boat that qualifies for a second home but is paid for I am OK with that as long as you don't owe a dime on a car, credit card or other non deductable item. If you do then your money management is poor unless you are not able to itemize your deductions. Also you should not criticize anyone for how they handle their finances until you are ready to open up your own financial statement for criticism...like where do you spend your disposable income? Do you smoke? Drink? Eat out a lot? Nudie Bars? Gamble? Buy the current trendy clothes? Trade cars often? Lease a car? Get a $50 haircut? Travel a lot? Take expensive vacations? Have to have the latest technology? Buy Steaks instead of hamburger? Go out to movies instead of renting them?
Maybe some people would say that if you do those things you are throwing your money away. Some people might want to pay a little interest with their disposable income and enjoy a "toy" rather than do those things. It's all where you want to spend your disposable income.
12-04-2003, 09:32 AM
#16
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Originally posted by Von Bongo
No one mentioned the time value of money either. The $50,000 you plunk down today (or borrow) is worth a lot more today than it would be 5-10 or 15 years from now. So when you figure I can borrow the money today at say 5.50% and repay it with tomorrows and next month and next years less valuable money..and so on plus deduct some of the interest then it starts to make more sense.
If you have a boat that qualifies for a second home but is paid for I am OK with that as long as you don't owe a dime on a car, credit card or other non deductable item. If you do then your money management is poor unless you are not able to itemize your deductions. Also you should not criticize anyone for how they handle their finances until you are ready to open up your own financial statement for criticism...like where do you spend your disposable income? Do you smoke? Drink? Eat out a lot? Nudie Bars? Gamble? Buy the current trendy clothes? Trade cars often? Lease a car? Get a $50 haircut? Travel a lot? Take expensive vacations? Have to have the latest technology? Buy Steaks instead of hamburger? Go out to movies instead of renting them?
Maybe some people would say that if you do those things you are throwing your money away. Some people might want to pay a little interest with their disposable income and enjoy a "toy" rather than do those things. It's all where you want to spend your disposable income.
No one mentioned the time value of money either. The $50,000 you plunk down today (or borrow) is worth a lot more today than it would be 5-10 or 15 years from now. So when you figure I can borrow the money today at say 5.50% and repay it with tomorrows and next month and next years less valuable money..and so on plus deduct some of the interest then it starts to make more sense.
If you have a boat that qualifies for a second home but is paid for I am OK with that as long as you don't owe a dime on a car, credit card or other non deductable item. If you do then your money management is poor unless you are not able to itemize your deductions. Also you should not criticize anyone for how they handle their finances until you are ready to open up your own financial statement for criticism...like where do you spend your disposable income? Do you smoke? Drink? Eat out a lot? Nudie Bars? Gamble? Buy the current trendy clothes? Trade cars often? Lease a car? Get a $50 haircut? Travel a lot? Take expensive vacations? Have to have the latest technology? Buy Steaks instead of hamburger? Go out to movies instead of renting them?
Maybe some people would say that if you do those things you are throwing your money away. Some people might want to pay a little interest with their disposable income and enjoy a "toy" rather than do those things. It's all where you want to spend your disposable income.
its all about that commodity called "fun".
ive been into cars , bikes , and other toys but noting even compares to the freedom of boating imho.
12-04-2003, 12:20 PM
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ITS AMAZING HOW A SIMPLE QUESTION ABOUT INTEREST RATES TURNS INTO A PHILOSOPHICAL DISCUSSION ABOUT PRIORITIES AND LIFESTYLES!!! Reddog.... ARENT WE JUST SUPPOSED TO HELP BIKINILOVER FIND THE BEST RATE AS OPPOSED TO TELL HIM HOW TO SPEND HIS $$$$$$$$$
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