Living beyond your means
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If I had never married I would be wealthy now.
Whenever I get a graduation notice I always give the graduate a book with a monetary gift.
"Why Didn't They Teach Me This in School?: 99 Personal Money Management Principles to Live By" ~ by Cary Siegel
Fact - Our High Schools, & Colleges simply do not teach responsible home financial management.
"Why Didn't They Teach Me This in School?: 99 Personal Money Management Principles to Live By" ~ by Cary Siegel
Fact - Our High Schools, & Colleges simply do not teach responsible home financial management.
I know some people well and also have some relatives that made many good choices in life. That includes being smart shoppers,saving,not needing instant gratification in life,ect. They have very healthy net worths, but none of it shows in any way. People in the financial world I know tell me how folks like this are increasingly rare-now it's LOOK like your this sucessful person, but reality is the opposite=too bad and not a trend I like to see.
You can finance a car. You can do alot of things. But financing
a car is one of the dumbest things you can do. Name other
things that are tangible that you can finance that will depreciate
faster. Youll be hard pressed to find many others. Used cars also
Save u $$ in taxes and insurance---thousands per year.
Originally Posted By: Rand
you can finance cars usually 0 to 2.9% interest.
a mortgage should be under 5%
by high interest its percentage not total $$$ interest
usually CC's first then other high interest %
unless you financed your house with a CC that would be last on the list or close.
Originally Posted By: SVTCobra
I wouldn't start with the high interest payments first. I would start with the lowest balance first because debt payments are all emotional. If you have these small little victorys that will keep you motivated to keep living on nothing and tackle the larger debts. If I started with the mortgage as my first goal then the cars and credit cards, I will never see the light at the end of the tunnel.
Remember if it was all math related most people wouldn't in the situation that they are in.
I would also have emergency money stashed away first above all else because what do you do when an emergency occurs before you saved any money from early payments?
a car is one of the dumbest things you can do. Name other
things that are tangible that you can finance that will depreciate
faster. Youll be hard pressed to find many others. Used cars also
Save u $$ in taxes and insurance---thousands per year.
Originally Posted By: Rand
you can finance cars usually 0 to 2.9% interest.
a mortgage should be under 5%
by high interest its percentage not total $$$ interest
usually CC's first then other high interest %
unless you financed your house with a CC that would be last on the list or close.
Originally Posted By: SVTCobra
I wouldn't start with the high interest payments first. I would start with the lowest balance first because debt payments are all emotional. If you have these small little victorys that will keep you motivated to keep living on nothing and tackle the larger debts. If I started with the mortgage as my first goal then the cars and credit cards, I will never see the light at the end of the tunnel.
Remember if it was all math related most people wouldn't in the situation that they are in.
I would also have emergency money stashed away first above all else because what do you do when an emergency occurs before you saved any money from early payments?
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Put your $$ in physical precious metals. Then nobody can touch the buying power
If you become a long term care propect as a senior.
I disagree with d ramsey on metals.
If you become a long term care propect as a senior.
I disagree with d ramsey on metals.
Last edited:
Originally Posted By: Radman
Whenever I get a graduation notice I always give the graduate a book with a monetary gift.
"Why Didn't They Teach Me This in School?: 99 Personal Money Management Principles to Live By" ~ by Cary Siegel
Fact - Our High Schools, & Colleges simply do not teach responsible home financial management.
You got that right! I graduated 8 years ago ... never learned about how to manage money.
Luckily, my parents taught me that one.
Whenever I get a graduation notice I always give the graduate a book with a monetary gift.
"Why Didn't They Teach Me This in School?: 99 Personal Money Management Principles to Live By" ~ by Cary Siegel
Fact - Our High Schools, & Colleges simply do not teach responsible home financial management.
You got that right! I graduated 8 years ago ... never learned about how to manage money.
Luckily, my parents taught me that one.
Originally Posted By: Radman
Fact - Our High Schools, & Colleges simply do not teach responsible home financial management.
And it is my opinion that it is done on purpose. If we were all taught financial restraint, our spend would all of a sudden go down and the economy would tank. The powers that be want us all to keep spending up the wazoo, even if it means being in debt, or especially because it means being in debt. Being in debt = someone else is making even more money off you. Also, the longer you remain in debt, to longer you remain a slave to your employer and to your paycheck.
Fact - Our High Schools, & Colleges simply do not teach responsible home financial management.
And it is my opinion that it is done on purpose. If we were all taught financial restraint, our spend would all of a sudden go down and the economy would tank. The powers that be want us all to keep spending up the wazoo, even if it means being in debt, or especially because it means being in debt. Being in debt = someone else is making even more money off you. Also, the longer you remain in debt, to longer you remain a slave to your employer and to your paycheck.
Originally Posted By: eljefino
It is intriguing how ones end-of-life spent in a nursing home leaves the estate broke, regardless of if the person went in with $500k or as a pauper.
Kind of makes us all equal.
Which is just one reason I will not end up there. They are mostly warehouses for people who haven't realized they are dead yet!
It is intriguing how ones end-of-life spent in a nursing home leaves the estate broke, regardless of if the person went in with $500k or as a pauper.
Kind of makes us all equal.
Which is just one reason I will not end up there. They are mostly warehouses for people who haven't realized they are dead yet!
I choose to live a modest, financially responsible life, which includes responsible use of credit. Accumulation of wealth and material things is not what matters to me.
"What we do for ourselves dies with us. What we do for others and the world remains and is immortal." -Albert Pine
"What we do for ourselves dies with us. What we do for others and the world remains and is immortal." -Albert Pine
I am in the minority of most people I guess. I dont like being in debt in any way. I have a car loan that is a 48 month at a rate of 1.74% and I pay off my credit card every month and am careful to not just buy something because I want it rather than need it. I saw an awful lot of people in their fancy new cars and boats and etc. living the paycheck to paycheck thing when the economy tanked this last time and saw first hand how fast the wheels fall off when a job is lost.
Originally Posted By: dparm
Well, OP said cars should be paid for in cash.
I think this is a very risk-adverse way of thinking. For someone who doesn't want to deal with risk, 0 debt is easy. And there's certainly nothing wrong with that.
I personally never buy cars with cash. I make far more off that money invested than I save in interest. We use credit cards all the time. Discover PAYS me 5% to use it. Why would I use cash? Our credit card balance is paid in full every month. Sure, it's a "debt". It's a managed 0% interest debt.
There's an opportunity cost to using cash. I prefer to assume debt and use cash to make more money than I spend servicing that debt. Yes, there is risk in that. Some people are more risk-adverse than others. I consider myself pretty risk-adverse. But not to the point of missing opportunities by using cash everywhere.
I think too many people associate "debt" with "living beyond one's means". This is sometimes true. It's not always true. Folks need to be careful with generalizations.
Well, OP said cars should be paid for in cash.
I think this is a very risk-adverse way of thinking. For someone who doesn't want to deal with risk, 0 debt is easy. And there's certainly nothing wrong with that.
I personally never buy cars with cash. I make far more off that money invested than I save in interest. We use credit cards all the time. Discover PAYS me 5% to use it. Why would I use cash? Our credit card balance is paid in full every month. Sure, it's a "debt". It's a managed 0% interest debt.
There's an opportunity cost to using cash. I prefer to assume debt and use cash to make more money than I spend servicing that debt. Yes, there is risk in that. Some people are more risk-adverse than others. I consider myself pretty risk-adverse. But not to the point of missing opportunities by using cash everywhere.
I think too many people associate "debt" with "living beyond one's means". This is sometimes true. It's not always true. Folks need to be careful with generalizations.
One negative (that I know of) in living frugally, saving for retirement and paying for things is that it's held against you when you fill out the FAFSA form for your kids college.
Your home and vehicle is excluded so the guy living in the 800K house who drives the Audi gets more financial aid than the guy with the 200K house driving the Corolla (me). I see this with my co-workers (similar salary) all the time.
It's just another way that we penalize responsible people while rewarding irresponsibility.
Your home and vehicle is excluded so the guy living in the 800K house who drives the Audi gets more financial aid than the guy with the 200K house driving the Corolla (me). I see this with my co-workers (similar salary) all the time.
It's just another way that we penalize responsible people while rewarding irresponsibility.
Originally Posted By: Hokiefyd
I personally never buy cars with cash. I make far more off that money invested than I save in interest.
True, but you are still buying a depreciating asset, so its great you don't have to use your cash as you can make more investing the cash. Unless it was in the fall of 2008?
I personally never buy cars with cash. I make far more off that money invested than I save in interest.
True, but you are still buying a depreciating asset, so its great you don't have to use your cash as you can make more investing the cash. Unless it was in the fall of 2008?
Originally Posted By: Clubber_Lang
You can finance a car. You can do alot of things. But financing
a car is one of the dumbest things you can do. Name other
things that are tangible that you can finance that will depreciate
faster. Youll be hard pressed to find many others. Used cars also
Save u $$ in taxes and insurance---thousands per year.
Hmm. 3 cars in our household, a '99, and '06 and a '13 all within $10 for similar liability coverage... not sure where my extra insurance cost is coming from. Collision and Comp? They would actually be more expensive on the '06 than on the '13.
Do cars depreciate, you bet. Are there potential tradeoffs with a new versus used car - reliability, time and money spent on maintenance and repairs - you bet.
Taxes? At least in NY, tax on acquisition price is up front, and I also incur it every time I buy a used car. Yes, it's going to be more if the upfront cost is more and yes I'm also going to have that pesky tax issue often when I buy replacement parts.
One of the statements you made was:
Originally Posted By: Clubber_Lang
--Forget the car payments! Buy used and pay cash. This is difficult for car people like us
But it is vital. Dont worry about what strangers think of your possessions.
The sticking point to me being cash is automatically the best option versus financing.
I can do a lot better in returns than the rate the '13 is financed at.
You can finance a car. You can do alot of things. But financing
a car is one of the dumbest things you can do. Name other
things that are tangible that you can finance that will depreciate
faster. Youll be hard pressed to find many others. Used cars also
Save u $$ in taxes and insurance---thousands per year.
Hmm. 3 cars in our household, a '99, and '06 and a '13 all within $10 for similar liability coverage... not sure where my extra insurance cost is coming from. Collision and Comp? They would actually be more expensive on the '06 than on the '13.
Do cars depreciate, you bet. Are there potential tradeoffs with a new versus used car - reliability, time and money spent on maintenance and repairs - you bet.
Taxes? At least in NY, tax on acquisition price is up front, and I also incur it every time I buy a used car. Yes, it's going to be more if the upfront cost is more and yes I'm also going to have that pesky tax issue often when I buy replacement parts.
One of the statements you made was:
Originally Posted By: Clubber_Lang
--Forget the car payments! Buy used and pay cash. This is difficult for car people like us
But it is vital. Dont worry about what strangers think of your possessions.
The sticking point to me being cash is automatically the best option versus financing.
I can do a lot better in returns than the rate the '13 is financed at.
Originally Posted By: Quattro Pete
Originally Posted By: Radman
Fact - Our High Schools, & Colleges simply do not teach responsible home financial management.
And it is my opinion that it is done on purpose. If we were all taught financial restraint, our spend would all of a sudden go down and the economy would tank. The powers that be want us all to keep spending up the wazoo, even if it means being in debt, or especially because it means being in debt. Being in debt = someone else is making even more money off you. Also, the longer you remain in debt, to longer you remain a slave to your employer and to your paycheck.
I try not to buy in to conspiracy theories. Although I have pondered this one and have drawn two conclusions;
1 - The teachers do not understand home finances.
2 - We live in an instant gratification society media driven to market impulse buying.
Originally Posted By: Radman
Fact - Our High Schools, & Colleges simply do not teach responsible home financial management.
And it is my opinion that it is done on purpose. If we were all taught financial restraint, our spend would all of a sudden go down and the economy would tank. The powers that be want us all to keep spending up the wazoo, even if it means being in debt, or especially because it means being in debt. Being in debt = someone else is making even more money off you. Also, the longer you remain in debt, to longer you remain a slave to your employer and to your paycheck.
I try not to buy in to conspiracy theories. Although I have pondered this one and have drawn two conclusions;
1 - The teachers do not understand home finances.
2 - We live in an instant gratification society media driven to market impulse buying.
Originally Posted By: Radman
Although I have pondered this one and have drawn two conclusions;
1 - The teachers do not understand home finances.
Teachers teach what they are taught to teach. So if no one makes an effort to teach them, they will obviously not teach it to the students. Personal finance could be made a lot larger part of the school curriculum, and the teachers could be trained on how to deliver it. Alas, it is not being done. Why?
Quote:
2 - We live in an instant gratification society media driven to market impulse buying.
Yup. The widespread advertising in every possible avenue of our daily lives does not help. Trying to teach people to be financially responsible goes totally against this advertising blitzkrieg.
Although I have pondered this one and have drawn two conclusions;
1 - The teachers do not understand home finances.
Teachers teach what they are taught to teach. So if no one makes an effort to teach them, they will obviously not teach it to the students. Personal finance could be made a lot larger part of the school curriculum, and the teachers could be trained on how to deliver it. Alas, it is not being done. Why?
Quote:
2 - We live in an instant gratification society media driven to market impulse buying.
Yup. The widespread advertising in every possible avenue of our daily lives does not help. Trying to teach people to be financially responsible goes totally against this advertising blitzkrieg.
Originally Posted By: Clubber_Lang
Put your $$ in physical precious metals. Then nobody can touch the buying power
If you become a long term care propect as a senior.
I disagree with d ramsey on metals.
Precious metals ARE THE WORST long term investment historically.
http://www.joshuakennon.com/stocks-vs-bonds-vs-gold-returns-for-the-past-200-years/
Put your $$ in physical precious metals. Then nobody can touch the buying power
If you become a long term care propect as a senior.
I disagree with d ramsey on metals.
Precious metals ARE THE WORST long term investment historically.
http://www.joshuakennon.com/stocks-vs-bonds-vs-gold-returns-for-the-past-200-years/
Originally Posted By: Drew99GT
Originally Posted By: Clubber_Lang
Put your $$ in physical precious metals. Then nobody can touch the buying power
If you become a long term care propect as a senior.
I disagree with d ramsey on metals.
Precious metals ARE THE WORST long term investment historically.
http://www.joshuakennon.com/stocks-vs-bonds-vs-gold-returns-for-the-past-200-years/
Historically yes. The nation is 17+ trillion in debt. Gov borrows 40 cents of every dollar it spends.
This will lead to Massive inflation. Its comming. Read The Real Crash, by Peter Schiff
Originally Posted By: Clubber_Lang
Put your $$ in physical precious metals. Then nobody can touch the buying power
If you become a long term care propect as a senior.
I disagree with d ramsey on metals.
Precious metals ARE THE WORST long term investment historically.
http://www.joshuakennon.com/stocks-vs-bonds-vs-gold-returns-for-the-past-200-years/
Historically yes. The nation is 17+ trillion in debt. Gov borrows 40 cents of every dollar it spends.
This will lead to Massive inflation. Its comming. Read The Real Crash, by Peter Schiff
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