2ndamend...let's look @ your theory

You have your car burn up tomorrow and you have to buy a new one. You find a used or new but let's say you found a car for 20K

You have 100k cash in investments
Are you going to pay for the vehicle cash 20k or use the banks money at 2%

And let's say your money is making 20%.YTD on returns
You will remove 20k and lose 18% profit off 100k to pay off a vehicle for 20k@2%?

So if you use 20k cash your now at 80k invested so your losing 18%gains on 20K

So your cash only don't look like a smart move in my books

Thats a very good point W

I agree with ya'll both, I am all about having things paid for but I also want to enjoy some of my money now along with putting some up. Like "W" said, I am 31 and everything I have is paid for except my house and I have around 840 credit score and the bank will pay me more interest to let my money sit then I pay on money I finance, I hate notes but why spend my money when I can let them pay me to use theirs.

Ill take the Banks money for 5years at 2% than lose mine @ 20%

All day,,,, Anybody with cash in investments would never pull out a great amount of cash and lose out ..... I can see pulling out 1k -3k to buy something but more than that ... I would use banks money for cheap rate

W I will not engage in what would be a lopp sided discussion regarding your financial situation. Based on some of your other musings a sound fundamental discussion maybe impossible.

Below are some thoughts to ponder along with a few biblical quotes.

Myth: Debt is a tool and should be used to help create prosperity.

Truth: Debt isn't used by wealthy people nearly as much as we are led to believe.

Debt brings on enough risk to offset any advantage that could be gained through leverage of debt. Given time—a lifetime—risk will destroy the perceived returns purported by the myth-sayers.

Sure, buying things on credit at 0% sounds like a good deal, but what happens if someone loses a job or gets sick and can't work? 0% credit usually doesn't stay at 0% forever. If you miss a payment, wait until you see the fees that they will charge you. You're better off paying for it out of pocket so that you don't have the stress of making a payment each month. It's called peace of mind.


You see, seven out of 10 families in America are living from paycheck to paycheck. That means that if they missed one paycheck, bills would literally go unpaid. They may look like they’ve got it all together, but realistically—and statistically—it’s just not the case.

They were building a house of cards that wouldn’t even stand up to a light breeze, let alone a rainy day!


Proverbs 22:7, "The rich rule over the poor, and the borrower is slave of the lender"

Proverbs 22:26–27
Do not be one who shakes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.

Just curious but if you have $20,000 in an account or investment making you money are you saying you would not borrow the money at 0% and leave your money to grow knowing you could if needed pay the truck off at any time? I am all about being dept free but I am also all about letting my money make me money and using a banks lower interest to finance some things. I have never paid much attention to Ramsy and his talks but a guy at work says Ramsy claims you dept free if you only owe on your home but in my book dept is dept.

In this scenario it looks like you are either taking the hit at one time or over a period of time. You are taking 20k out and paying 20k for a vehicle or paying 20k plus 2% over however many months. When you pay cash for the vehicle instead of paying the bank 20k plus 2% interest you put the money back into your investment account each payday where it gains 20% ytd. If you go the loan route each payday you pay money to the bank that has interest instead of putting it into the account that gains 20% ytd.

Please correct me if I'm wrong in my thinking, because my past has proven that I'm a long way from a financial expert.

Borrow borrow borrow!! Borrow some much that u are so good rich you can't even fill it up with gas!! Yeah baby it looks do good just sittin in the driveway!! Lmao

W, if you are making 20% on your investments every year, then why are you working offshore? You should be balling on Wall Street.

Google Average return on mutual funds

Save ya money for a year and pay cash fir a used boat. Wait till the off season to get a better price. Look in TX or FL. They will have the best prices.

Over a 10 year adv...I have made right at 22% with only two bad years which lowest was 8%

Right now YTD over all I'm up 39% total ..(I daytrade a lot and this is why I have a tiger return)

I'm not going to use my cash that is making 15-25% when I can use the bank @ 2%

Not the same ......

20% of 100k is 20,000
20% of 80k is 16,000

So if your paying your self back the 20k over 5 years your losing money off your 100K which is greater than 80k



But on another note like 2ndadm said...lots of people live pay check to pay check and live off debt .
Learned a long time ago you pay your self 1st them you pay the bills

If you can't afford it "don't buy it" many think hey its just a $100 a month I can buy that but never add the other expense with that 100 which now is $200 a month

Pay your self 1st..... Before taxes 8% goes to my 401k after taxes next 5% goes to my edward jones account .....
Then the rest is for bills and what ever ...

I paid my self twice before I paid the 1st bill......so if I have a expense come up I have money for that..

I tell every young guy offshore the same thing. I have seen the make the dumb est mistakes all the time
...get the 1st pay check and 4wheeler .new truck, rims and its all a loan....

Instead of paying them for there work they pay the bank for working....

when did W get a financial calculator..... lol

a person living paycheck to paycheck with no saving has no business buyin a luxury / pleasure item such as a boat..... and the banks who lend to these people are the real issue!!!

X2 purebay

It's human nature to get what u want ASAP!! We are all guilty of it in some way.
The elephant in the room is bad lending.
Banks giving people loans that they don't need.
I can remember goin with a friend to look at a 4 wheeler back in 2007/2008..... The dealer was pushing him to finance it. Note was gonna b like 90$ a month.... For 7 years..... 0% down. And like 11% interest.
I broke down the total payments to him and it was another 1800 or so in interest.
He chose to save for 9-10 months and then paid cash.
The fact that lenders & business now finance as little as 1000$ purchases is redicilous.
I'm not a fan of credit cards; learned that lesson in college..( citibank used to set up at the student union and offer the " college" shirt and other crap if u signed up for a card) ; how this was legal ill never understand.
But anyway back to my topic, if u need a new fridge and don't have the cash that's what a credit card can purchase. Or an emergency when ur low on funds.
Credit cards are not for living above or outside your financial means.
People swipe credit cards like crazy!!
I know many people buy all their stuff on credit cards and recieve the points; that's fine as long as u pay it off each month.

When I bought Lauren's ring there was a guy in there buying a 3 ct diamond.
He had 3k on the store credit card, 5k on a visa, 5k on a MasterCard and his mama sign a loans thru thr store for the rest...... That's a true story!!!

Everyone has different circumstances and I totally understand this.
But when banks just throw money at people it's hard for many to turn away and say ; I'll wait till I can pay cash.

Here is an idea I once herd.
Save up enough money in an account/ investment so that the earnings off that money can pay for ur boat. This would b an account totally seperate from retirement. It could b a " play/ hobby fund"
That way ur money is still there and u stay very liquid for the future.

There's some excellent advice in this thread. I'm going to do some math on the scenarios W laid out to get an idea of what the difference in money will be either way versus the risk.

Sent from my HTC Trophy using Board Express

Well I did some math on this subject. I will agree that after five years using the return on investment W mentioned above you will have more money taking out a loan instead of using 20k cash from the investment fund. I figured at 2% interest and 5% interest and the results are the same. I will say I still don't see the wisdom of taking out a loan versus saving the cash if you're going to pay a note outside your investments, but to each his own.

W is an anomaly to any rule. If you can get 22% return annually, then by all means use debt to purchase your boat because more than likely it will be a 100 ft yacht.

For everyone else, this return is highly unlikely and you will end up owing money on a depreciable "asset" which is actually a liability. Always try to pay cash for your toys when you can.

Somebody drank the Dave Ramsey KoolAid.

(I just paid cash for my boat :-))