[Litos]

I pay for my house and my cars......

I have been given ZERO money by any family members - I didn't go to college.

my dad is probably sitting on quite a bit of cash at the tender age of 63, but he has helped both my older brother and my little brother get outta some jams.

I am blessed to have a house payment and two car payments just as I am blessed that I haven't taken any handouts since I got out of the Marines....

I ain't rich, but I make good money.

and everything I own or have owned in the last 17 years all came from my pocket.

hopefully I can land one of these oil/gas jobs overseas and get my house paid off in a year HAHA !!!

[zx10guy]

Originally Posted by Nkc

I was referring to myself but cool story bro. Thanks for the lecture.

My bad.

[PSUSMU]

Originally Posted by wakeboarder109

Like many others have said my wife and I have a low 30 year note on our house which we picked up as a foreclosure. We have no CC debt and one car payment which my job covers. Its a great feeling to have low overhead.

Its very nice to have newer and nicer things but since we're both in our mid 20s we are trying to save as much as we can for down the road. At the same time its very hard to find the balance between having fun today and saving for 30 years down the road.

I'm 27 with a 30-year fixed @ 3.75% and BMW nearly paid off. I'm having all the fun and travelling I can while I can until 30 or whenever I get married. Now's the time to do it rather than later...

[My335iTT]

Holy shit I cant imagine my life without a mortgage it would be amazing! I still owe about $9k left on my ride and around $140k on the house :-/

[Mr Tonka]

Originally Posted by zx10guy

I whole heartedly disagree with you here. Alpine is actually smarter than you give him credit.



I totally agree with you. With mortgage rates being so low, I decided to keep my 30 years fixed rate mortgage (3.75%) going and not worry about paying it off. When you dunk money into something like real estate, it does turn into an asset but good luck trying to get your money out of it without having to spend money to do so. Also, turning a real estate asset into liquid cash isn't instantaneous. Unless you're in a really hot market, it's going to take weeks if not months to convert that house over to cash.

In contrast, I've decided to dunk the money I would have put into paying down my house into investments which last year resulted in a 24% return.

In addition, I have even less incentive to pay off my beach house property where I have a 30 years fixed at 3.25%.

But to get a little back on topic, I have no credit card debt; pay off all my credit cards in full each month. I own both of my motorcycles free and clear. My daily beater is paid off but unfortunately, I may not have it any more due to hitting a deer recently. The only debt I have is my wife's 2013 RDX and my 2013 135i. I put over half of the total price of the car as a down payment on the RDX and the wife is making the monthly payments at 1.49% for 5 years. I put almost half of the total price of my 135i as down payment with the same financing as the RDX at 1.49% for 5 years. I intend on paying off the BMW in a year or two. Even though the interest rate is low, having payments on a car just annoys me.

It was nice to have no payments other than my mortgages for a few years.

Good luck. Most people on this forum don't subscribe to this type of logic.

[zgood4u]

Cars are free and clear, no CC debt, just bought a condo 3 months ago 15yr note. New furniture all paid in full.

[zx10guy]

Originally Posted by Mr Tonka

Good luck. Most people on this forum don't subscribe to this type of logic.

And it's not just this forum. It's the general public. Even some of the famous/celebrity type financial planners all talk about getting your house paid off. And I couldn't disagree more. Especially with a low fixed rate.

This is also the age old argument about cutting up credit cards and paying cash for everything. Like credit cards have some mystical powers over someone which forces them to buy things on credit which they can't pay off. I try to buy almost everything on my credit cards because either they give me cash back, extends warranties on the electronics I buy through it (which I have gotten the credit card company to cover repairs past the standard manufacturer's warranty), provides accidental damage or loss/theft coverage (which I have used and successfully got paid out on), or discounts on products purchased (ie retail credit cards). If I paid cash on everything, I wouldn't get any of the above perks and if you look at it from a dollars stand point, am actually losing money by paying cash.

[Alpine435i]

Originally Posted by zx10guy

And it's not just this forum. It's the general public. Even some of the famous/celebrity type financial planners all talk about getting your house paid off. And I couldn't disagree more. Especially with a low fixed rate.

This is also the age old argument about cutting up credit cards and paying cash for everything. Like credit cards have some mystical powers over someone which forces them to buy things on credit which they can't pay off. I try to buy almost everything on my credit cards because either they give me cash back, extends warranties on the electronics I buy through it (which I have gotten the credit card company to cover repairs past the standard manufacturer's warranty), provides accidental damage or loss/theft coverage (which I have used and successfully got paid out on), or discounts on products purchased (ie retail credit cards). If I paid cash on everything, I wouldn't get any of the above perks and if you look at it from a dollars stand point, am actually losing money by paying cash.

This.

[gatorfast]

Originally Posted by zx10guy

And it's not just this forum. It's the general public. Even some of the famous/celebrity type financial planners all talk about getting your house paid off. And I couldn't disagree more. Especially with a low fixed rate.

I understand the logic of using cash to earn a higher rate of return - but for most people they would simply rather not have the debt. Also, most people dont have the time/ability/access to actively manage an investment which guarantees a return higher than their debt.

Think about it this way...lets say you mortgage your house since rates are low and invest that money in something that pays you more than the interest on your mortgage. Good decision right? Now lets say 2008 happens again and you lose your investment (or a significant portion) and owe tons of money on a house that is worth much less. Didn't turn out so great at that point.

[MidwestGolfBum]

Originally Posted by zx10guy

And it's not just this forum. It's the general public. Even some of the famous/celebrity type financial planners all talk about getting your house paid off. And I couldn't disagree more. Especially with a low fixed rate.

This is also the age old argument about cutting up credit cards and paying cash for everything. Like credit cards have some mystical powers over someone which forces them to buy things on credit which they can't pay off. I try to buy almost everything on my credit cards because either they give me cash back, extends warranties on the electronics I buy through it (which I have gotten the credit card company to cover repairs past the standard manufacturer's warranty), provides accidental damage or loss/theft coverage (which I have used and successfully got paid out on), or discounts on products purchased (ie retail credit cards). If I paid cash on everything, I wouldn't get any of the above perks and if you look at it from a dollars stand point, am actually losing money by paying cash.

This is so, so right! I just wish that there were more people that had this kind of mentality as well as being able to use and understand credit (of all kinds). I have tried to get some of my friends to get cards for retail places they go to on a regular basis or gas stations that they shop at almost exclusively but haven't been able to get anywhere with them. They will then, of course, bitch about the fact that I get all these great savings at all the places we shop at, as well as am able to fly free places through airline miles that I don't get only when I'm in the air. Granted, some of these people may be better off paying in cash for everything as I could imagine they would be the ones that would "forget" to pay the bill or just pay the minimum because "that's all I had to pay" since they really don't understand credit as a whole.

Shit, I use a business card that gets me points for some of the smaller purchases that I need to make for customers so that I can get the points for it and when I tell people about things like that they are just baffled since I have a line with most of my distributors.

[P1]

Originally Posted by zx10guy

And it's not just this forum. It's the general public. Even some of the famous/celebrity type financial planners all talk about getting your house paid off. And I couldn't disagree more. Especially with a low fixed rate.

This is also the age old argument about cutting up credit cards and paying cash for everything. Like credit cards have some mystical powers over someone which forces them to buy things on credit which they can't pay off. I try to buy almost everything on my credit cards because either they give me cash back, extends warranties on the electronics I buy through it (which I have gotten the credit card company to cover repairs past the standard manufacturer's warranty), provides accidental damage or loss/theft coverage (which I have used and successfully got paid out on), or discounts on products purchased (ie retail credit cards). If I paid cash on everything, I wouldn't get any of the above perks and if you look at it from a dollars stand point, am actually losing money by paying cash.

Having a credit card and enjoying the perks that come along with having one is a different topic than buying your houses and cars cash. If you pay off your credit card each month, you pay 0% interest.

Now back to owning your house free and clear. Suppose you have $500K cash in your bank account. Would buying a $400K house cash make sense? Probably not.

Now imagine if you have $5M in the bank. Why wouldn't you pay cash for a $500K house? You still have plenty of money left to invest, use for retirement, pay for your kids to college, etc.

Perhaps it's because I'm European and was brought up that you should never buy something unless you can pay cash for it (with the exception of a house perhaps), but I don't prescribe to this whole "financing everything until you're drowning" crap.

Could I buy a new Porsche Panamera Turbo and make payments on it? Sure. But would I rather buy a used X5 and pay cash? All day.

[Nkc]

Originally Posted by zx10guy

And it's not just this forum. It's the general public. Even some of the famous/celebrity type financial planners all talk about getting your house paid off. And I couldn't disagree more. Especially with a low fixed rate.

This is also the age old argument about cutting up credit cards and paying cash for everything. Like credit cards have some mystical powers over someone which forces them to buy things on credit which they can't pay off. I try to buy almost everything on my credit cards because either they give me cash back, extends warranties on the electronics I buy through it (which I have gotten the credit card company to cover repairs past the standard manufacturer's warranty), provides accidental damage or loss/theft coverage (which I have used and successfully got paid out on), or discounts on products purchased (ie retail credit cards). If I paid cash on everything, I wouldn't get any of the above perks and if you look at it from a dollars stand point, am actually losing money by paying cash.

It all depends on what stage in life you are currently in. If you're young and have little to no assets, yeah go ahead and leverage the hell out of yourself and try to make something out of it. Because you have nothing to lose and you must build from somewhere. There's nothing wrong about CCs and buying with credit as long as you're able to utilize the grace period and pay before it ends. But using CC as your best argument is kind of weak when we're here talking about paying in cash for cars and houses.

I'm a cash person because it helps a lot when I consider purchasing something. Especially with all the superficial shit we have in the market now. If I can't buy it in cash, I can't afford it. Really simple stuff and I live by it. So far so good, 2 houses in HK, 4 cars, no debt, self made. Some people may get great returns on financial investments but you know damn well that a lot don't and may even lose all their money. Your great returns last year do not guarantee a great return for the following years and that's the kicker. I'm as risky as it gets when it comes to stocks and my business because that's what it takes for me to be successful. On a personal level, I'm super conservative. I buy with cash because I can and if and when shit hits the fan, everything that I need is paid for in full.

For people who are successful in monetary terms, you really think a buying a house or cars with cash will affect their income and ROI?

[jlstyle]

Originally Posted by jasonX

Admittedly I know little when it comes to the Real Estate market. Could you post or even PM me information about such a program. My Fico scores are in the high 700s and I do have about 10% saved with absolutely 0 debt.

It's not a special program....any mortgage lender will take 10% down on a single family house on conforming loan. But it's a different story for a condo/townhome. They usually require 20% down or it depends on current ratio of tenant and owner living in the complex.

You could even go lower to like 5% if you go FHA.

And buying home isn't only about your down payment. There are many things they look at such as your job history/income ratio/history of bank account/and list goes on.

And remember your maximum loan amount is $417k unless you go Jumbo, so any difference has to be down paid regardless of the percentage. i.e. if you are buying $550k home (pretty normal in NJ), $550k-$417k=$133k has to be down paid in order to qualify for the loan. That's more than 20%.
But if you are buying $380k home, you could down as low as $38k to qualify because you are already under maximum loan amount.

[Whostheboss]

Originally Posted by Litos

I pay for my house and my cars......

I have been given ZERO money by any family members - I didn't go to college.

my dad is probably sitting on quite a bit of cash at the tender age of 63, but he has helped both my older brother and my little brother get outta some jams.

I am blessed to have a house payment and two car payments just as I am blessed that I haven't taken any handouts since I got out of the Marines....

I ain't rich, but I make good money.

and everything I own or have owned in the last 17 years all came from my pocket.

hopefully I can land one of these oil/gas jobs overseas and get my house paid off in a year HAHA !!!

[Whostheboss]

My 3series and my Dodge ram are all paid-off. I've never owned a credit card before (i dont even know what a credit card looks like LOL)

The only loans i have is small College Loan and my Mortgage.

I dont have a Dad or Grand parents around i dont have any rich family member. No one ( NO ONE) ever! has given me $1. Every single item/food/service i have paid for in 30yrs of my life all came from my pocket.

[Whostheboss]

At the same time. We all need to chill and enjoy life. I have a saying

"I'd rather die with millions in debt than be debt free"

You have to have fun in life and do it while you're young. Just be responsible.

Dont spend all your youth saving and saving so you can be debt free, it's silly to me. MONEY IS TO BE MADE AND SPENT! Youll never be free anyway, youll always have Taxes to pay.

My goal is to drive a nice car, wear nice cloths, travel all over the world, live in a nice house, party and enjoy sexy Women .... all these while im young. I'm not gonna be and old 50yr old geezy in a Lmabo. sorry.

[NemesisX]

Originally Posted by Whostheboss

My 3series and my Dodge ram are all paid-off. I've never owned a credit card before (i dont even know what a credit card looks like LOL)

The only loans i have is small College Loan and my Mortgage.

I dont have a Dad or Grand parents around i dont have any rich family member. No one ( NO ONE) ever! has given me $1. Every single item/food/service i have paid for in 30yrs of my life all came from my pocket.

How were you able to prove credit-worthiness (and therefore presumably secure a reasonable rate on your mortgage) if not with a credit card?

[Whostheboss]

Originally Posted by NemesisX

How were you able to prove credit-worthiness (and therefore presumably secure a reasonable rate on your mortgage) if not with a credit card?

I have always maintained a good credit.
I have utility bills in my name since age 18 that are always fully paid (those help build credit).
I have a decent paying job.
I saved up enough $$ for down payment.

[kevinbahnz]

Someday, one day. I was debt free for a good 2 years until i bought a house last year and went on a spending spree with renovations and upgrades, then last week I bought a used X5 for the wife.

[NemesisX]

Originally Posted by Whostheboss

I have always maintained a good credit.
I have utility bills in my name since age 18 that are always fully paid (those help build credit).
I have a decent paying job.
I saved up enough $$ for down payment.

I thought this was an old wives' tale. Dubious reputation notwithstanding, "creditcardforum.com" has this to say about utility bills and building credit -

Phone/utilities do NOT build credit – I can’t even tell you how many people I talk to who believe that their cell phone, power, and gas bills build credit. Unfortunately they don’t. You see the reason the cable or phone company check your credit when you open a new account is because they want to make sure you will pay your bill. If your credit comes back as sketchy, then they probably will ask for a security deposit. What they won’t do is report your accounts to the credit bureaus… unless you stop paying. When that happens, they will report your account as a delinquent/bad debt. So in short, these bills can hurt your credit, but they can’t help it.

Anyone knowledgeable about this field please feel free to chime in. This isn't my area of expertise.

[NemesisX]

Wellsfargo.com has this to say -

How do I establish credit?
These five tips can help when building your credit history.

2. Pay your utilities. If your utilities, such as heat, electricity, telephone, cable, and water service, are in your name, you can help establish a good credit record by paying your full balance on time.

So according to wellsfargo, simply paying your utility bill in full can help build credit.

Is that enough, though? I was under the impression that a large portion of your credit score comes from your credit utilization ratio. Is it possible to build a substantial credit score simply by paying your utility bill on time?

[gatorfast]

Originally Posted by Whostheboss

My 3series and my Dodge ram are all paid-off. I've never owned a credit card before (i dont even know what a credit card looks like LOL)

How do you live without a credit card? Are you constantly going to ATM's to reload? Dont you want the convenience of not being tied to physical bills when getting gas, groceries, buying something online, etc? Have you ever been on an airplane?