Not the ones that have no money to invest because they bought new cars every 2 years
New Cars and Financial Ineptitude
- Thread starter Kurtatron
- Start date
I think you forgot a decimal and it should be 0.22%.
If you have cash earning 22%, please tell us how.
No casino action for me. Pick companies that aren't being tracked by the street, have high insider ownership and great people working them, can make much better returns than average.
Invest the cash as I said above.
I don't think it's quite like a casino. I don't think there was mention of risk free, but there are mutual funds out there that have returned 22%+ in the last 10 years. CPOAX, BFOCX, etc. But you could buy the S&P 500 index fund and be happy with about a little over 13% over 10 years.
Annual.
Either way, even at an average rate of return at 10%, finance at 3%, you're still making 7%. It's equally dumb to avoid debt as it is to over use it.
Wishful thinking I suppose for the economy of debt to transition to an economy of savings and investments. I do live in the rust belt, so I do see a lot fewer old cars as compared to California. I lived most my life in California, and still remember seeing all the old cars. The rust belt is vastly different, but why wouldn't annual rust sprays be more common? I fluid film my cars every winter, to help keep the rust tolerable. An acquaintance of mine just bought a 2017 Subaru CrossTek, and I suggested rust proofing to him. He just shrugged it off. I don't understand the mindset of people. Even when you offer them solid advice, they don't seem to care.
For me it's actually the opposite. A lot of the stuff about newer cars drives me away from them. $35K+ for a brand new car? I love cars, but they aren't my only hobby, and I can spend that money on a lot of other things I enjoy instead of in just one place. Having less debt also gives you more freedom career-wise since you aren't locked in to financial needs. I have friends/family that HAVE to work in order to afford their lifestyle. It creates a certain stress that can't be healthy.
Yes, new cars have a lot of cool features, but working in technology the last thing I want after staring at a screen most of the day is to get in a car that has a dang screen. I enjoy the mechanical stuff, the analog feel of actually driving a vehicle. I also understand that I appreciate the things that others don't. Old cars aren't for everyone, new cars aren't for everyone, as long as we have the choice to drive either I'm fine with that.
Yes, new cars have a lot of cool features, but working in technology the last thing I want after staring at a screen most of the day is to get in a car that has a dang screen. I enjoy the mechanical stuff, the analog feel of actually driving a vehicle. I also understand that I appreciate the things that others don't. Old cars aren't for everyone, new cars aren't for everyone, as long as we have the choice to drive either I'm fine with that.
I think this is the average mentality of people who are first starting out which is fine. However, when you're older and have made some profit, there's also locking in profits and taking some money off the table. You invest for a purpose, when you achieve some goals, it can be time to spend it.
If too many people in any economy are out of control with their spending, it means the future wealth and society is negatively affected. Too many declare bankrupcy, and you will see the loans, mortgage rates increase across the board - even for those who spend with care.
The auto industry is one of the worst offenders for enticing buyers to buy what they aspire to, instead of what they can safely afford now.
The auto industry is one of the worst offenders for enticing buyers to buy what they aspire to, instead of what they can safely afford now.
While there's a lot of ranting and raving about it, consumer spending is what keeps the economy going. Other countries like China or Japan that have a strong saving culture don't have as robust an economy and it's probably Japan that's a good example of what happens when people don't spend and the economy ends up in the dump for decades. Also while lots of people talk about it, bankruptcies aren't that common, less than a million a year. Those kinda get factored in when setting interest rates. The interest rates are higher to account for the percentage of those who don't end up paying up. That's why a good credit rating is important, less likely to go under means lower cost of doing business and hence lower rate. Auto industry typically has their own financing arm and that basically exists to move the metal, they don't have to make as much money as long as the cars get sold. This is basically the difference between macro economics and micro.
IMO it can be very hard to buy a vehicle and then expect it to still meet your needs 10 years into the future. While a college grad could arguable use a minivan for the rest of their life, along with everyone else for the matter, it does start to make one wonder if it's the right vehicle for quick jog to the store to get a gallon of milk. Let alone if that one vehicle is the one vehicle that makes one "happy" for their entire life. I dare say, there should be some expectation for changing vehicles at some point. Not every 2 years, and maybe 5 & done is too soon for most, but you get the relative idea: people can't be expected to buy one car and drive it for 25+ years.
In other threads we gripe about how no one takes care of their cars. So it's not like you can buy used and expect no issues... so what is one left to do? Most people can't own 2+ cars so that one can be in the shop at any time for any length of time for a repair.
In other threads we gripe about how no one takes care of their cars. So it's not like you can buy used and expect no issues... so what is one left to do? Most people can't own 2+ cars so that one can be in the shop at any time for any length of time for a repair.
I applaud and am happy for the people making good returns on their investments.
If you think you are gonna get 10% year after year, I wish you luck.
I wish me luck too...
If you think you are gonna get 10% year after year, I wish you luck.
I wish me luck too...
It's not too far out there. There are several S&P 500 index funds out there that have returned a little over 11% over the last several decades.
That's what I did (and have done for years.)
On our Pilot, I put a 56% downstroke on it, and financed the rest @.09%.
Enough that my 48 painful payments can be easily cash flowed, yet my investments can maintain as high a balance as possible.
Cash is not always king when buying a new car. Dealers hate cash buyers as they represent little opportunity for profit on a deal. If they can't make money on the financing, they will offer less of a dealer discount to make up the difference in what they are losing on the loan. Dealers are also more apt to let cash buyers walk away from the table than they are a buyer who is is financing. Cash buyers are also less likely to buy extended warranties, protection plans, gap insurance, and other F&I upsells since they are not financing. There are also, many times, additional incentives only available to consumers who are financing than those paying cash.
If you want to pay cash for a car, you are better off doing a traditional financing deal, most likely paying a lower total price, and then just paying the car off when the first payment statement shows up. Better yet, if you can get a 0% loan, put the cash in an interest bearing account and just pay the car loan from that account and let the interest accrue on the balance in the account over the course of 4-5 years. If you can afford to part with the cash, you can afford to just isolate it in an account for a few years and at least earn something on it.
Because instead of paying a car off in cash even if you are able, financing can make more sense. In my case I financed at 1.9% APR... I can use that money that I could have used to pay a majority or all of my car off with to invest or keep invested and make much more in the long-term than what I would pay with that 1.9% APR. The gains are greater than the losses when compared.
Same reason that I don't pay off my home quicker, even though I can. I send that extra money into my 401K in which it would benefit me much more later on in life. My APR on my home is less than what my return is in my retirement accounts.
We also live below our means and have quite a bit if disposable income. A nice chunk goes into retirement and the rest is play money. Vacations, cars or whatever else that makes life a bit better. My car which I just purchased is just another hobby/toy for me, along with my many other interests. I'll accept the car payment and depreciation for the memories and experiences I have with it!
Same reason that I don't pay off my home quicker, even though I can. I send that extra money into my 401K in which it would benefit me much more later on in life. My APR on my home is less than what my return is in my retirement accounts.
We also live below our means and have quite a bit if disposable income. A nice chunk goes into retirement and the rest is play money. Vacations, cars or whatever else that makes life a bit better. My car which I just purchased is just another hobby/toy for me, along with my many other interests. I'll accept the car payment and depreciation for the memories and experiences I have with it!
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ls1mike
$50 Site Donor 2024
I don't think anyone here knows how much someone makes just based off what they drive. The only things I have financed currently are the house and the truck. I am not going to judge anyone else because it is none of my business. Really I could be driving better than a Malibu and never in service police car but it is what we like. I work for the government, easy to find out what someone makes when they work there. Pay tables with locality adjustment are on line. I also get a military retirement, also really easy to figure out what I get from that. So I imagine there are people who know how much I make to the penny, because I have been asked why don't you drive such and such...I don't want such and such that is why.
These types of postings together with Amsoil and K&N postings make for some of the best reading on BiTOG. They are always good reading.
