[insanecoder]

Suze Orman has tits and has no idea what "driving" really is
another boring save all your money to spend in heaven gal
sounds real tight (maybe thats the only positive) wait not that kind huh ok well then that sux
whatever happened to carpe diem

[allinon72]

Originally Posted by hi_officer

Exactly, my head hurts every time someone recommends fully paying off or putting a very large down payments on a car when you can finance them for <2%.

It’s very simple, instead of paying off a depreciating asset, put that money in a 401k, 529, ETF, Personal IRA, etc (it’s very simple to set any of these up with little cost) and then take the monthly car payment. Very easy to make 5% on your money while only paying 2% on your car.

Whenever I see this advice given, I wonder how many actually invest the money. I would bet less than half. For the average person, it's an excuse to have a car payment, whilst the money they would have used for a large down payment disappears on frivolous shit.

Sometimes personal finance goes beyond math. For a country with such poor financial health, simplicity is crucial. That means getting and staying out of debt.

[hi_officer]

Allow me to clarify.

I am not talking about taking the $5k or $10k that you would have put as a down payment and putting that money into an investment vehicle. My comment was for VERY large down payments ($40k+) or for people that pay for an entire car upfront (like handing over an $80k check to BMW for an M3).

You are right in that the $5k-$10k will basically be spent on other stuff over time if you don't put it into a down payment, BUT for the people that have $40k, $80k, or more ready to throw down on a car, that money probably isn't going anywhere fast so they should think twice about having their money work for them. And for those of us that have enough to pay off a car in it's entirety, they are probably wise enough to understand how smart investments work and should have no problem navigating. Ignorance to smart personal finance should not mean go buy a car in full.

[ipilcher]

Interest rates go both ways, though. So while it's true that I could finance a car at a very low rate, it's also true that any low-risk investments also yield very little these days.

For me, the spread simply isn't worth the hassle/complexity.

[hi_officer]

Originally Posted by ipilcher

Interest rates go both ways, though. So while it's true that I could finance a car at a very low rate, it's also true that any low-risk investments also yield very little these days.

For me, the spread simply isn't worth the hassle/complexity.

Right, it's not for everyone, some people just like to leave all of their money in the bank, thinking even low risk investments are too risky / complex.

[c1pher]

I think about this similarly. If I’m getting a loan for less than 2%, inflation is typically 3% and my investments grow faster than the inflation rate it’s not worth it for me to put a bunch of money down. In some sense the cost of the car becomes cheaper each month over time if you consider the future value of a dollar is always decreasing. And if I can’t afford the payment structuring the loan that way, then I have no business getting the car.

[PoorLurker]

Originally Posted by NickyC

She's not wrong about anything, car prices right now are a complete joke. Not asking you to agree with me, but if you can't pay cash or at least put down 75% towards the value of the car with a maximum two year note, get something you can afford. LoL @ fleases.

The thought of ever having a car payment again makes me sick. There are countless nice 10 year old cars right now which can be obtained cash in hand, look great, and will last for years and years.

I need to value money more. Car payments to me are just numbers with a "-" in front of them.

Originally Posted by allinon72

Whenever I see this advice given, I wonder how many actually invest the money. I would bet less than half. For the average person, it's an excuse to have a car payment, whilst the money they would have used for a large down payment disappears on frivolous shit.

Sometimes personal finance goes beyond math. For a country with such poor financial health, simplicity is crucial. That means getting and staying out of debt.

After expenses, savings, retirement, car payments, insurance payments, mortgage, etc... I am basically living pay check to pay check.



I am not sure why Suze Orman gets such a bad wrap. I used to watch all of her shows. It's actually funny to see how far off people are. I remember there were many times that she did not agree with a person's purchase, but still approved them because they could afford it.

One guy wanted to pay $20k for a private jet from Chicago to Boston and back. He was 39 and approved.

I like that she is more about the numbers than she is about emotions. So if the numbers pan out she's good with it even if it makes no sense to her emotionally.

[NickyC]

Originally Posted by allinon72

Whenever I see this advice given, I wonder how many actually invest the money. I would bet less than half. For the average person, it's an excuse to have a car payment, whilst the money they would have used for a large down payment disappears on frivolous shit.

Sometimes personal finance goes beyond math. For a country with such poor financial health, simplicity is crucial. That means getting and staying out of debt.

Couldn't agree more. I was a debt slave for a number of years until the damned bulb went off in my barely developed brain. I pay cash now for nearly everything, and only use one credit card I have for points and I pay it off monthly religiously. If I can't pay cash or can't pay something off within a month, it's a no purchase and I have no problem telling myself I can't afford it. When you stop giving a shit about what other people think of you, it's a great moment.

F
U
C
K

Debt

[Ali Shiralian]

Originally Posted by NickyC

Couldn't agree more. I was a debt slave for a number of years until the damned bulb went off in my barely developed brain. I pay cash now for nearly everything, and only use one credit card I have for points and I pay it off monthly religiously. If I can't pay cash or can't pay something off within a month, it's a no purchase and I have no problem telling myself I can't afford it. When you stop giving a shit about what other people think of you, it's a great moment.

F
U
C
K

Debt

You have to be smart with money. If you have 80k and want to buy a car which is worth 80K and you want to pay cash for it sounds ridiculous to me. You can put a down payment and enjoy the .99% or any low interest loan and invest the rest in stocks which pays somewhere around 18%. This way you're enjoying the cheap money from the finance company, have the car and the rest of your money is making money at the same time. Win win imo

[allinon72]

Originally Posted by Ali Shiralian

You have to be smart with money. If you have 80k and want to buy a car which is worth 80K and you want to pay cash for it sounds ridiculous to me. You can put a down payment and enjoy the .99% or any low interest loan and invest the rest in stocks which pays somewhere around 18%. This way you're enjoying the cheap money from the finance company, have the car and the rest of your money is making money at the same time. Win win imo

18% returns huh?

See, that's exactly what I'm talking about. People try to sound smart on the internet or to their friends, but either don't actually do it or claim unrealistic returns.

[Ali Shiralian]

Originally Posted by allinon72

18% returns huh?

See, that's exactly what I'm talking about. People try to sound smart on the internet or to their friends, but either don't actually do it or claim unrealistic returns.

Yes, 18%. You read correctly. I don't try to sound smart I've done it and doing at currently. There are some stocks which paid way more than 18% including dividends but I was too conservative to invest in them and kick myself for it. Market have gained huge since Trump, why not enjoy the wave. All you need to know is keep up with what's happening and not worry about a bit of debt.

Have a great day..

[Ali Shiralian]

Originally Posted by allinon72

Whenever I see this advice given, I wonder how many actually invest the money. I would bet less than half. For the average person, it's an excuse to have a car payment, whilst the money they would have used for a large down payment disappears on frivolous shit.

Sometimes personal finance goes beyond math. For a country with such poor financial health, simplicity is crucial. That means getting and staying out of debt.

Simplicity might get you peace of mind but will never get you to the next level.

[zx10guy]

Originally Posted by allinon72

18% returns huh?

See, that's exactly what I'm talking about. People try to sound smart on the internet or to their friends, but either don't actually do it or claim unrealistic returns.

Originally Posted by Ali Shiralian

Yes, 18%. You read correctly. I don't try to sound smart I've done it and doing at currently. There are some stocks which paid way more than 18% including dividends but I was too conservative to invest in them and kick myself for it. Market have gained huge since Trump, why not enjoy the wave. All you need to know is keep up with what's happening and not worry about a bit of debt.

Have a great day..

I'm right there with Ali. I have three different investment accounts (one of which is my 401k). They're all doing around 18% return year to date. I have another account with a single fund in it doing 31% year to date.

[hi_officer]

Originally Posted by Ali Shiralian

Simplicity might get you peace of mind but will never get you to the next level.

I subscribe to this thinking. Although, I understand many people just want to pay things off, live worry-free, get comfortable in their lifestyle and live life.

[hi_officer]

Originally Posted by zx10guy

I'm right there with Ali. I have three different investment accounts (one of which is my 401k). They're all doing around 18% return year to date. I have another account with a single fund in it doing 31% year to date.

Care to share which funds?

How diversified are those funds and what were their performances the past 2,3,4 years? I can understand a fund doing well since Trump took office but what are the historicals? I'm interested

[Mike991M4]

Originally Posted by allinon72

18% returns huh?

See, that's exactly what I'm talking about. People try to sound smart on the internet or to their friends, but either don't actually do it or claim unrealistic returns.

thats what my 401k has made ytd.

However annualized returns since opening 20 years ago are 7.04%, so that's probably a more accurate long term planning number

[c1pher]

Originally Posted by Ali Shiralian

You have to be smart with money. If you have 80k and want to buy a car which is worth 80K and you want to pay cash for it sounds ridiculous to me. You can put a down payment and enjoy the .99% or any low interest loan and invest the rest in stocks which pays somewhere around 18%. This way you're enjoying the cheap money from the finance company, have the car and the rest of your money is making money at the same time. Win win imo

Essentially what I said above. Bingo. Keeping that $80k working for you while you enjoy a low interest loan is a better option. Again it has to be within your means to do so. I’m not cashing out a portion of my 401k for a car, ever.

[c1pher]

Originally Posted by hi_officer

Care to share which funds?

How diversified are those funds and what were their performances the past 2,3,4 years? I can understand a fund doing well since Trump took office but what are the historicals? I'm interested

While I am around that percent (17+%) this year, I have averaged just over 10% a year over the past five years.

[positiveions]

People people people, why are you even wasting your time reading her crap?

[c1pher]

I think her advice is good at the basic economics 101 level.

[M2Nebula]

Originally Posted by positiveions

People people people, why are you even wasting your time reading her crap?

Actually, more people should listen because they can't seem to figure it out for themselves. Basic yes, but better than nothing. It really just comes down to common sense and discipline which has gone out the window.

Also, some do/did not learn at an early age so any bad habits continue throughout their life. When growing up my dad taught me well. I purchased many dirt bikes by paying a portion with my paper route and lawn cutting earnings and he would fund the rest and let me pay off a very low interest loan. Usually at some point when I got close to the end and my grades and I were good he would tell me to forget about the balance.

Another one I love is when people get all exited about getting their huge tax return back from the government. Really, you let someone else have your money and sit back and wait for it? I haven't gotten a tax return back forever and usually pay a penalty which is minimal.

In end though, everyone is different and some are not comfortable with any debt even if it is good debt. Just don't pay off your 2% car loan and then carry a 17% credit card bill. And don't laugh here, it has and is being done.

[jmg]

Not EVERYTHING has to be an investment. Some people enjoy expensive meals and aged whiskey, some people want to pay a little more for the thing they sit in 2 hrs a day.