Re: Do you own your boat
 

I guess it depends on the person financial situation as to whether its better to pay cash or finance, plus the type of boat.

Lets suppose a guy has a home, wife and kids. He has saved up 150k in cash. He decides he wants a one year old fountain for lets say, 100k. He now has his savings down to 50k. Then he goes and spends another 20k for a truck to pull his fountain. Now, his savings is down to 30k. He finds out he is going to be laid off from his job, and his wife is pregnant again. Now, he doesnt have much money to fall back on. He panics, and has to sell the fountain soon. He lets the boat go for 85k because he needs to move it. He loses 15k in cash, plus the boat he saved for. If he had a 750 dollar boat payment, 350 dollar truck payment, and 150k in his savings, he would not have to panic, and rush to dump the boat right away, and he could concentrate on finding work and his family having a roof and food.

We see it all the time, guys having to dump their toy's dirt cheap because they desperatly need CASH. They take a huge beating on their boats.

I suppose if you can afford to spend the cash for the big money boats, and still have plenty left over, than yes, I would buy cash too.

I think the way some of us look at it is, lets say you buy a 2000 25ft outlaw for 50k. Its a great boat with low hours. You finance it, pay 400-500 a month, and lets say you keep it two years and you sell it for 45k. You made 12k in payments, and you owe 40k. So it cost you 7k two own it for two years, had fun with it, and you didnt have to liquidate your assets to have a nice boat.

Whether you finance it, own it, lease it, or borrow it, does it really matter when your shooting across the Lake doin 70mph with a few drunk hotties in the boat? :drink:

Re: Do you own your boat
 

"Finance a boat = the fastest way to throw your money away other than the dog track .. ?% for 10-15 years plus depreciation.. No THANKS"

Finance a 100k boat for 15 years @ 6%. 844 a month. Total paid after 15 years=151,290.

100k in a 2%apy money market for 15 years, you will just about have 150k in the account. There are tons of investments you can make with that 100k to make more, but it was just to give an idea. I say, let the money work for you, and its there in case of emergency. As long as you can afford the note, and still save money, why not. Like hotpursuit says, money is cheap now(well not for me) but for the guys who can get a 5% apr.

Re: Do you own your boat
 

Cash for all toys! :cool:

Re: Do you own your boat
 

Paid Cash for mine the day it was delivered. believe I have paid for it about 6 or 7 more time's with rebuilding blown engines. & drive's. but what can you say except you gotta love Power Performance Boating.

Re: Do you own your boat
 

There are some very interesting points of view here. I financed my boat but I pay cash for all my construction equipment. This way if worst comes to worst let the bank take the toy but they can't take my money makers, therefore worst should never meet worst. I could pay off the boat easily but for some reason I feel more comfortable with cash on hand.

Re: Do you own your boat
 

Anytime you finance anything you are paying too much for it .. Although the way our economy works you have to carry some debt to establish credit .. I am far from rich but the only thing I make payments on are my house and two credit cards which I try and keep a small amount on .. As far buying a boat to show off or impress the chicks ..then maybe you need to work on other issues..
Although I might be borrowing twoards a boat because " I gots to have a Cig " :drink:

Re: Do you own your boat
 

I own mine (just bought it and brought it home last week) - but it isn't worth a whole lot. I would rather pay cash for toys. The only payments I have are my condo and my car. My car will be paid off early this March (which I am looking forward to). I don't like financing things because, as others have stated, you end up losing twice - once because of depreciation and once because of the interest they charge. The only way I would finance a toy would be if I got a bigger or equal tax break to what I would be paying in interest.

Re: Do you own your boat
 

Good point ..In NH you can take boat loan interest as a deduction if the boat has a toilet , as its considered a second /third home.. :D

Re: Do you own your boat
 

i finance mine...would never tie up an appreciating asset like my house with a depreciating asset like my boat

Re: Do you own your boat
 

I lost you ?

Re: Do you own your boat
 

I bought new at a used price, got 4.59% 20 yr. money, and a five year warranty.

Why would I involve anymore cash in that deal than I had too?

Re: Do you own your boat
 

Own it outright! Paid cash 20 years ago in April! Definitely spent more in storage over the years, then the cost of the boat!

Re: Do you own your boat
 

I am not the borrowing type but when I purchased my boat this fall, I could not justify taking money from investments that have consistently earned much more than the interest I pay on my boat note just so I could say I owned my boat outright. I think that as long as you have a "real" equity position from the beginning (read: significant down-payment) and the rates are good, there is no arguable reason not to borrow a portion of the value other than your personal philosophy. In today's interest environment, you can borrow money at a net rate that is within 1% of average inflation. That is as close to paying cash as your going to get in my opinion. It will look even more attractive if interest rates and rates of returns go back up during the term of your loan. If interest rates were 10%-12%, my thought process would have been different, I would probably be too greedy with my cash to spend it on a boat when rates of return are high and I sure as hell wouldn't pay 12% on a note.

I do believe that every homeowner should have a home equity line of credit and keep it maximized as far as available dollars, but I do not understand the logic behind using it except in emergencies and for the purchase of appreciating assets. It serves as an excellent emergency fund and you will be glad you have it if you lose your job or your business income slows for a while. Remember, the bank won't give you money when you need it most, having your financial house in order may save you a lot of grief during hard times. Deductibility of interest should not be your only criteria when making a borrowing decision. Plus, HELOC's have a variable rate so you could end up with an unfavorable rate at some point in the future, especially if you are borrowing on your HELOC with the intention of it being a long term payback. Why put your house in hock for your toys? What would you be more willing to give up in the event you stumble into hard times, your house or your toys?

Finally, if somebody could explain how borrowing money in order to get the tax write-off on the interest you pay is actually a positive benefit to your bottom line, I would love to hear it. I cannot figure out how saving between 15 cents and 38 cents on the interest dollar you pay is such a great deal. You're still paying interest! I get the impression that many think the interest they pay reduces taxes $1 for every $1 they spend on interest. Is there something I am missing?

Re: Do you own your boat
 

Paid for!

Re: Do you own your boat
 

Holy crap Bill. I don't think you've said that much the whole time I've known you.
I didn't need to borrow, as I robbed every 7-11 for a radius of 100 miles. Its a good thing they're open 24/7.

Re: Do you own your boat
 

CASH IS KING WHEN THE SH$T HITS THE FAN is my opion.I own mine, but money is to cheap to borrow these days, specially if you have a house that you can borrow against. And if your property values are going up as much as mine seem to be you can borrow more money than you need.

Re: Do you own your boat
 

Rippem my thought proces exactly. I'll look to get out before my ext. warranty is up.

Re: Do you own your boat
 

I paid cash for mine: 55k for a 28 AT. If I wanted to go bigger, I would finance. I like the "security" of owning the boat outright, but my boat isn't making any money for me. I'm better off keeping my cash invested in my business. For anything over 100k, I would be smart to finance it.

Andy

Re: Do you own your boat
 

I guess all of us hear have the same addiction,when it comes right down to it the
boating world in this country spends more in gas on one poker run than the gross
national product of Cuba.God Bless the USA

Re: Do you own your boat
 

Yes...GOD BLESS THE USA!

How many places in the world could so many "average citizens" have this debate?

"... I'm making monthly payments on my boat".

"Uhh...I paid cash for mine".

:D

Do you feel blessed to live in this country or what?

Re: Do you own your boat
 

I owned my last boat.....But the bank is gonna own my next one :D :D

I'll just borrow it on weekends :evilb:

Re: Do you own your boat
 

What kind of math is that???
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.

Re: Do you own your boat
 

mcollinstn, If your bank is paying 1.2%, that's about twice what mine is paying. The last time I figured the interest being paid on my account, I had to move the decimal point on my calculator to show three digits to the right! :D

Re: Do you own your boat
 

I own mine, THANK GOD !

Re: Do you own your boat
 

What are boat rates right now ..Assuming 750 or higher score ..Maybe 25K down and borrow 50K ?? :D

Re: Do you own your boat
 

I have enjoyed all the different views on this thread. But as I said before, I never pay a dime out of my pocket down on a boat. I borrow the full amount (which is a great deal) and finance the rest. I currently have a 5 1/8% finance rate and a 20 year term. I make the payments and write off the entire interest amount. I also keep my money in the market making anywhere from 9% to 20% in any given quarter. I am no accountant, but I have a very good one that says this is the smart way to buy the big toys. I agree. If all hell brakes loose, I let the boat go back and I still have my money and my houses. I can borrow money from any bank any time with money in the bank even with a boat that has gone back. Sound advice I guarantee.

Re: Do you own your boat
 

pm me were you have money market ill take some of that 9% :)
best i can find is 6.75 % on bonds 5 yr

Re: Do you own your boat
 

We have had discussions like this on several occasions in the past. I always enjoy the views and opinions that come from it. That's what we're here for....give out opinions on a common interest. As always, when it comes to money our opinions can be very strong depending on our financial situation, upbringing, and values in life.

Whenever we discuss this topic someone almost always brings up the rule that ALL must live by or we are fools. "No payments on toys at all"!! For those that are fortunate enough in life to be in these situations this is great. I commend you. You deserve everything you have earned in life. Keep up the good work.

Now for the real world where most of us live......I'll be damned if I'm going to work 60 hrs a week while the rest of the fortunate people in the world go to the lake every weekend. I'm not going to spend the next 10-15 yrs of my life saving up enough money to pay cash for something I can make payments on and enjoy now. My kids will not have the opportunity to enjoy the lake life like I did when growing up. My priorities may change by then. My needs may also change. My spouse and I don't earn 100k a year. We will enjoy the money we make on the things that we enjoy. If we can afford a reasonable boat payment for a few years while we use it...so be it. I get to write the interest off and I'm out the depreciation and upkeep. Everyone is out upkeep regardless. After depreciation I lost 2k in three yrs on my last boat. Oh well!

Let's be nice and remember that we all have different financial situations. Just because one earns more than the next person shouldn't give them the right to tell the less fortunate they are wrong for making payments on toys to enjoy with the family.

My rule....Make payments on it now while I can afford to enjoy it. Just my rule, doesn't have to apply to everyone.

Buck

Re: Do you own your boat
 

Thank you someone with some common sense.

Re: Do you own your boat
 

Money markets are to safe try Legg Masion,haven't been below 13% average in 2
years!!!!!!!!!!

Re: Do you own your boat
 

HotPursuit, what is legg masion? I searched for it but come up with nothing.

If your in the stock market ticker "NAT"-nordic american tanker is paying right around a 12% dividend, I don't own it I just get to hear about it every quarter when my co-worker gets his check :rolleyes:

Re: Do you own your boat
 

http://www.leggmason.com

the high yield looks good

Re: Do you own your boat
 

Yea baby lets all make some gas money, some risk involved but no pain no gain.
I took a blood bath during the telecommunications bust,dusted off and back in
the saddle. Your Registered CoonAss Keep it Triple

Re: Do you own your boat
 

No problem. I can only assume you do not have fidelity funds investment accounts.
For this past year, the return on the Baron Growth was 31.75% and the Fidelity Blue Chip was at 24.80%. The worst one on my porfolio was the Fidelity Freedom Income at a mere 7.33%. I never said I had money in the money market. I said i had money in the market
Yes, over the past several years the account has been volatile, but it seems now over the last 5 to 6 quarters it is very lucrative again.

I use the Fidelity Investment Services provided by my company and have been very pleased. If you need to contact them the number is 1-800-421-3644 or on the web at www.401k.com

Re: Do you own your boat
 

I think it does not matter who owns the boat as long as you get to use it. :D
The payment book that comes with most boats suck tho. :(

Re: Do you own your boat
 

Bingo! I would feel much better having my life fall apart and having my 100K in the bank. They can come get the boat and all the other toys for that matter. The money evens out if you play it right. The best way is to borrow against your own 401K and pay YOURSELF back with interest! 200K is ALOT of cash hanging around for a rainy day. I do not boat to try to save money and I write the boat off totally for work. It would be insane to pay cash and lose ALOT of your borrowing power to build spec homes, invest etc....
Cash in hand makes a rainy day better.

Re: Do you own your boat
 

Steet, what you have said definitely makes finacial sense. Unfortunately for me, I just don't make enough money to afford a monthly boat payment. :mad:

I am fortunate to have made some VERY good investments during the 90's bull market. I have used that to my advantage and continue to. I have always paid cash for my boats until my current boat. My first go-fast was a '94 16 Classic. Not much @ $15K, but I sold it for $12K a couple of years later. Rolled that into a 232 which I paid $31K for. It burned up in a boatel fire 4 years later and I received a check for $31K which I rolled into a '00 272. Paid $58K for that boat which I traded two years later on my '02 340. I think I got something like $48K on trade....on paper at least. The balance I financed myself by writing a check on margin against my brokerage account. Interest rates over the last three years have been very low, but that is changing fast. However, by using the dividends and selling some loosers for additional write offs against dividends I am down to owing myself about $30K. (Plus margin interest is a write off.) I should have that payed off soon. So I should be back to zero balance and be ready to move on something bigger.

The wife now wants a Cig. :eek: I can say without a doubt that it won't be a new one! Can't do that much margin!!

Re: Do you own your boat
 

I like your formula mack ..Sort of on the same trend ..Work your way up ..
If ya cant afford it , you realy shouldnt be driving it ..
Financing is just an expensive way to delaY THE INEVITABLE

Re: Do you own your boat
 

Do I own it... Yes

Is there a payment? ... Yes


They're all rented yah know! Famous words from a Harvard educated Long Islander!!!!!!

Re: Do you own your boat
 

I own mine free and clear. But would sure like some one else to own it ;-). I'm trying to sell, see signature.