Originally Posted By: metalboy
Whooo boy. Never underestimate the urge of BITOGers to feel superior to other folks.
The "super long notes" that get written these days are usually five or six years long. When I was a whippersnapper the average car was due for (at least) a re-ring and new valves after five years, and it would have been generally a mess. Anybody taking who's still making payments on something like that would be a fool.
Times have changed! These days a the average five-year old car is just going to be a slightly scruffier version of itself when brand new. Cars last longer than they ever have, and have more features (safety and otherwise). The price has gone up, but I for one don't think a five year note at a reasonable interest rate is excessive. On a $30,000 car a five year note is likely to come out to under $3,000 in total interest, and it's are very likely that the owner will have ZERO paid repairs necessary to the vehicle in that time frame. Most of these "sub-prime" car notes are not getting written on $30,000 cars, but on smaller, more inexpensive transportation for working people.
Cars aren't houses. They aren't investments in and of themselves, but they are frequently investments in ones life. Reliable transportation is necessary to hold down a job and to, you know, live life. In the majority of this country, that means you absolutely have to have a car. Our public transit is a mess. To quote the poet: "Catching buses be getting me to work late/ you know that slows down my pay rate/ down to zero"
And yet folks that follow your line of thinking have higher consumer debt than ever, and remain slaves to payments for years. A mortgage is usually a must, at least on the first home, and if done wisely it's a good investment. Stringing payments out on a depreciating asset such as a vehicle isn't a wise use of credit when, with a little self discipline, it doesn't need to be done.
We have two Godsons, both in their late 20's who are practicing a debt free lifestyle. One has kids; both, other than a mortgage, are debt free. Both will have their homes paid off in a couple years. Both went to college and graduated with no student loans by putting in 30+ hour weeks working to pay off their student debt while going to school. Both have sacrificed a lot in their younger years to enjoy their financial success in their later years. Neither of them has any sort of pay television, they don't buy the latest and greatest fancy phone, they don't eat out, don't go to movies, and vacations are usually taken at our lake home (which is free for them to use). When their vehicles need repairs they usually bring them out to my shop and do the repairs themselves.
The one with kids is a single income family-his wife is a stay at home mom and home schools. The other is a two income family and they're waiting until they're financially set before having kids. They both live modest lifestyles and live within their means. Both purchased homes that they knew they could pay off in 10 years or less, and both are putting in sweat equity to increase the value of their homes.
With the money they've saved and invested both will be millionaires within 10 years, and probably in a shorter time frame given the recent economic growth. Both are very driven, self disciplined men. Both are proof that it can be done, and even though I'm only their Godfather, I couldn't be prouder.
There's nothing like the feeling of owing no one a single dime. And you're right on one count, it is indeed a superior feeling. It's too bad so many other people will never get to experience it.
