Paid My Car Off Early!
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We'll have to revive this thread periodically and see what hypothetically would have turned out better financially - a car loan at what - 2%, 2.5%? or an index fund in the SAP 500. Good intervals? 1, 3 and 5 years? Someone mark their calendar.
Originally Posted By: 99Saturn
We'll have to revive this thread periodically and see what hypothetically would have turned out better financially - a car loan at what - 2%, 2.5%? or an index fund in the SAP 500. Good intervals? 1, 3 and 5 years? Someone mark their calendar.
i thought we are a car-nut site??? (how do you set the "emoticons-drink-beer-in-friendship"?)
OP, what oil plan to run in the focus? (inside and outside)....
now that you can afford it...
We'll have to revive this thread periodically and see what hypothetically would have turned out better financially - a car loan at what - 2%, 2.5%? or an index fund in the SAP 500. Good intervals? 1, 3 and 5 years? Someone mark their calendar.
i thought we are a car-nut site??? (how do you set the "emoticons-drink-beer-in-friendship"?)
OP, what oil plan to run in the focus? (inside and outside)....
now that you can afford it...
Originally Posted By: 99Saturn
We'll have to revive this thread periodically and see what hypothetically would have turned out better financially - a car loan at what - 2%, 2.5%? or an index fund in the SAP 500. Good intervals? 1, 3 and 5 years? Someone mark their calendar.
If you're comfortable with the risky venture of leveraging debt so you may apportion more resources to invest, that's great. But it is typically regarded as a high risk move, at least by financial pundits that I respect.
You may come out ahead, but you're putting yourself in a bad place if things go south.
Some of us, myself included, prefer the stability and freedom that comes from having no debt. You may prefer to chase the possibility of having a higher net worth.
We'll have to revive this thread periodically and see what hypothetically would have turned out better financially - a car loan at what - 2%, 2.5%? or an index fund in the SAP 500. Good intervals? 1, 3 and 5 years? Someone mark their calendar.
If you're comfortable with the risky venture of leveraging debt so you may apportion more resources to invest, that's great. But it is typically regarded as a high risk move, at least by financial pundits that I respect.
You may come out ahead, but you're putting yourself in a bad place if things go south.
Some of us, myself included, prefer the stability and freedom that comes from having no debt. You may prefer to chase the possibility of having a higher net worth.
Originally Posted By: IveBeenRued
Originally Posted By: Miller88
...I'm guessing you lived in Cazenovia or Hamilton? Those seem to be the only prosperous places in Madison Co where there are properties that would be worth that much and taxed that much. Oneida/Whompsville ... not so prosperous and definitely no $140K properties (or jobs that would support a $140K house).
It was in Oneida. There are no jobs, industry, or reasons to live there but there are plenty of homes valued 140K+.
I grew up near Utica. Syracuse area isn't dead (yet). Oneida, Utica, the Mohawk Valley. All dead.
Originally Posted By: ARCOgraphite
Uh, hate to be LOGICAL but
with low interest auto loans (2-5%) it would be better to have that cash in your IRA earning 15-30% in mutual funds. If you borrowed 10k in 2008 and invested in an average manner, you would have over 30G's now.
Potentially. Very rare I would see that type of return on investment.
Originally Posted By: Bandito440
Excellent job! The best thing about any car is that it's paid for.
I like the gratification of having loans paid off, so I'd suggest paying off the student loans before taking on new debt. That's just me though.
Cheers.
I don't care for renting, though. I see it as throwing away the amount I'm paying in rent. In reality, it's not as bad as I think. $100 or $200 would be taxes, I'd have higher utility bills, be responsible for maintenance, etc.
I may take you up on that investment offer
Originally Posted By: Mykl
Originally Posted By: 99Saturn
We'll have to revive this thread periodically and see what hypothetically would have turned out better financially - a car loan at what - 2%, 2.5%? or an index fund in the SAP 500. Good intervals? 1, 3 and 5 years? Someone mark their calendar.
If you're comfortable with the risky venture of leveraging debt so you may apportion more resources to invest, that's great. But it is typically regarded as a high risk move, at least by financial pundits that I respect.
You may come out ahead, but you're putting yourself in a bad place if things go south.
Some of us, myself included, prefer the stability and freedom that comes from having no debt. You may prefer to chase the possibility of having a higher net worth.
I'd rather have no debt and no money than have a lot of debt and the potential to make money. I'm too conservative for the risky stuff. I'll probably lose out, but I'm okay with that; I value stability.
Originally Posted By: Miller88
...I'm guessing you lived in Cazenovia or Hamilton? Those seem to be the only prosperous places in Madison Co where there are properties that would be worth that much and taxed that much. Oneida/Whompsville ... not so prosperous and definitely no $140K properties (or jobs that would support a $140K house).
It was in Oneida. There are no jobs, industry, or reasons to live there but there are plenty of homes valued 140K+.
I grew up near Utica. Syracuse area isn't dead (yet). Oneida, Utica, the Mohawk Valley. All dead.
Originally Posted By: ARCOgraphite
Uh, hate to be LOGICAL but
with low interest auto loans (2-5%) it would be better to have that cash in your IRA earning 15-30% in mutual funds. If you borrowed 10k in 2008 and invested in an average manner, you would have over 30G's now.
Potentially. Very rare I would see that type of return on investment.
Originally Posted By: Bandito440
Excellent job! The best thing about any car is that it's paid for.
I like the gratification of having loans paid off, so I'd suggest paying off the student loans before taking on new debt. That's just me though.
Cheers.
I don't care for renting, though. I see it as throwing away the amount I'm paying in rent. In reality, it's not as bad as I think. $100 or $200 would be taxes, I'd have higher utility bills, be responsible for maintenance, etc.
I may take you up on that investment offer
Originally Posted By: Mykl
Originally Posted By: 99Saturn
We'll have to revive this thread periodically and see what hypothetically would have turned out better financially - a car loan at what - 2%, 2.5%? or an index fund in the SAP 500. Good intervals? 1, 3 and 5 years? Someone mark their calendar.
If you're comfortable with the risky venture of leveraging debt so you may apportion more resources to invest, that's great. But it is typically regarded as a high risk move, at least by financial pundits that I respect.
You may come out ahead, but you're putting yourself in a bad place if things go south.
Some of us, myself included, prefer the stability and freedom that comes from having no debt. You may prefer to chase the possibility of having a higher net worth.
I'd rather have no debt and no money than have a lot of debt and the potential to make money. I'm too conservative for the risky stuff. I'll probably lose out, but I'm okay with that; I value stability.
Originally Posted By: Miller88
Originally Posted By: Mykl
Originally Posted By: 99Saturn
We'll have to revive this thread periodically and see what hypothetically would have turned out better financially - a car loan at what - 2%, 2.5%? or an index fund in the SAP 500. Good intervals? 1, 3 and 5 years? Someone mark their calendar.
If you're comfortable with the risky venture of leveraging debt so you may apportion more resources to invest, that's great. But it is typically regarded as a high risk move, at least by financial pundits that I respect.
You may come out ahead, but you're putting yourself in a bad place if things go south.
Some of us, myself included, prefer the stability and freedom that comes from having no debt. You may prefer to chase the possibility of having a higher net worth.
I'd rather have no debt and no money than have a lot of debt and the potential to make money. I'm too conservative for the risky stuff. I'll probably lose out, but I'm okay with that; I value stability.
OP - I didn't mean it as advice towards you (or anyone in this thread for that matter) - my apologies that it came off as negative towards your payoff.
I've read some of your other threads and knew you were taking the conservative approach - nothing wrong with that at all - particularly on a car loan time frame - plenty of times that pendulum swings in both directions and you don't want to be on the side when the return would fall short of whatever the interest rate on the loan was and would make you a net loser.
Again - congratulations.
Edit:
Originally Posted By: Mykl
Originally Posted By: 99Saturn
We'll have to revive this thread periodically and see what hypothetically would have turned out better financially - a car loan at what - 2%, 2.5%? or an index fund in the SAP 500. Good intervals? 1, 3 and 5 years? Someone mark their calendar.
If you're comfortable with the risky venture of leveraging debt so you may apportion more resources to invest, that's great. But it is typically regarded as a high risk move, at least by financial pundits that I respect.
You may come out ahead, but you're putting yourself in a bad place if things go south.
Some of us, myself included, prefer the stability and freedom that comes from having no debt. You may prefer to chase the possibility of having a higher net worth.
I'd rather have no debt and no money than have a lot of debt and the potential to make money. I'm too conservative for the risky stuff. I'll probably lose out, but I'm okay with that; I value stability.
OP - I didn't mean it as advice towards you (or anyone in this thread for that matter) - my apologies that it came off as negative towards your payoff.
I've read some of your other threads and knew you were taking the conservative approach - nothing wrong with that at all - particularly on a car loan time frame - plenty of times that pendulum swings in both directions and you don't want to be on the side when the return would fall short of whatever the interest rate on the loan was and would make you a net loser.
Again - congratulations.
Edit:
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Congratulations. It's a great feeling to be completely free of the burden of debt. The goal of saving up for home ownership is also admirable-it proves that it can be done despite the naysayers. It seems that the self discipline it takes to do what you've managed (and plan to do) often isn't well regarded. It should be, because it's a relative rare quality.
Originally Posted By: ARCOgraphite
Uh, hate to be LOGICAL
No worries-you weren't.
Originally Posted By: ARCOgraphite
Uh, hate to be LOGICAL
No worries-you weren't.
Originally Posted By: Mykl
Originally Posted By: 99Saturn
We'll have to revive this thread periodically and see what hypothetically would have turned out better financially - a car loan at what - 2%, 2.5%? or an index fund in the SAP 500. Good intervals? 1, 3 and 5 years? Someone mark their calendar.
If you're comfortable with the risky venture of leveraging debt so you may apportion more resources to invest, that's great. But it is typically regarded as a high risk move, at least by financial pundits that I respect.
You may come out ahead, but you're putting yourself in a bad place if things go south.
Some of us, myself included, prefer the stability and freedom that comes from having no debt. You may prefer to chase the possibility of having a higher net worth.
It only really makes sense IF you have the money to buy the car for cash but take advantage of a subsidized by the manufacturer and then dollar cost average the purchase of the car.
In 2012, I could have paid cash for my Accord but chose to take advantage of .9% Honda financing to purchase the car so that I could take advantage of the return (16.9% average return over the last 3 years in a variety of mutual funds through American Funds) and conserve capital at the same time. I can then cash flow the payment. In the end, it obviously is a 16% gain.
However, I'm not borrowing $ just to throw in a mutual fund. I am using inexpensive financing to augment an ongoing investment.
I don't think this is the same situation as the OP is in.
Originally Posted By: 99Saturn
We'll have to revive this thread periodically and see what hypothetically would have turned out better financially - a car loan at what - 2%, 2.5%? or an index fund in the SAP 500. Good intervals? 1, 3 and 5 years? Someone mark their calendar.
If you're comfortable with the risky venture of leveraging debt so you may apportion more resources to invest, that's great. But it is typically regarded as a high risk move, at least by financial pundits that I respect.
You may come out ahead, but you're putting yourself in a bad place if things go south.
Some of us, myself included, prefer the stability and freedom that comes from having no debt. You may prefer to chase the possibility of having a higher net worth.
It only really makes sense IF you have the money to buy the car for cash but take advantage of a subsidized by the manufacturer and then dollar cost average the purchase of the car.
In 2012, I could have paid cash for my Accord but chose to take advantage of .9% Honda financing to purchase the car so that I could take advantage of the return (16.9% average return over the last 3 years in a variety of mutual funds through American Funds) and conserve capital at the same time. I can then cash flow the payment. In the end, it obviously is a 16% gain.
However, I'm not borrowing $ just to throw in a mutual fund. I am using inexpensive financing to augment an ongoing investment.
I don't think this is the same situation as the OP is in.
Yeah, debt free is great especially on something that depreciates.
You've got a darn good head on your shoulders, awesome work.
Congrats dude!!
I did the same thing last year, owed $4k on my F250.
In Jan 13' I moved out of the last place I was renting and after draining my bank account in high bills and high rent, I told myself I was finished. Come heck or high water, I was going to pay off my debts and buy my own house.
I swallowed my pride and moved back in with my folks and continued to pay rent - to myself. I put the exact amount I was paying for rent into my savings every month. To compensate the 'rents for putting up with me, I fixed all the misc broken items around the house and on their cars. I think they came out on the better end of that deal, LOL. I also used what little extra money I had to buy old non-running cars to flip and earn money towards the goal - house down payment.
In March 14' after a good bonus from work, income tax return, and selling my last 'flip' truck, an 02' F250 7.3, I met my goal. I actually negotiated a good enough deal on the house that I was able to pay the $4k cash payoff on the truck as a bonus, that lowered my monthly bills by $350 a month, vs barely putting a dent in the mortgage if I had used it in the down payment.
I did the same thing last year, owed $4k on my F250.
In Jan 13' I moved out of the last place I was renting and after draining my bank account in high bills and high rent, I told myself I was finished. Come heck or high water, I was going to pay off my debts and buy my own house.
I swallowed my pride and moved back in with my folks and continued to pay rent - to myself. I put the exact amount I was paying for rent into my savings every month. To compensate the 'rents for putting up with me, I fixed all the misc broken items around the house and on their cars. I think they came out on the better end of that deal, LOL. I also used what little extra money I had to buy old non-running cars to flip and earn money towards the goal - house down payment.
In March 14' after a good bonus from work, income tax return, and selling my last 'flip' truck, an 02' F250 7.3, I met my goal. I actually negotiated a good enough deal on the house that I was able to pay the $4k cash payoff on the truck as a bonus, that lowered my monthly bills by $350 a month, vs barely putting a dent in the mortgage if I had used it in the down payment.
Congrats! I am not sure why everyone on this site thinks it is so hard to to be debt free in today's world. I am a college student, own my own car, and I am completely debt free.. I have never been in debt. I have a credit card, but I use it like cash, as in I will only use it if I have more than enough cash to cover it. I pay it off every month well before the due date. I paid cash for my truck (used), and I have never had a car payment. Debt free can be done, and it's really not that hard.
Nick1994
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Originally Posted By: ClutchDisc
Congrats! I am not sure why everyone on this site thinks it is so hard to to be debt free in today's world. I am a college student, own my own car, and I am completely debt free.. I have never been in debt. I have a credit card, but I use it like cash, as in I will only use it if I have more than enough cash to cover it. I pay it off every month well before the due date. I paid cash for my truck (used), and I have never had a car payment. Debt free can be done, and it's really not that hard.
I'm in the same boat as you. College student and completely debt free. If I don't have the money for something, I just don't buy it. Simple really. I've never owed a penny in my life, but I guess life has only begun.
Congrats! I am not sure why everyone on this site thinks it is so hard to to be debt free in today's world. I am a college student, own my own car, and I am completely debt free.. I have never been in debt. I have a credit card, but I use it like cash, as in I will only use it if I have more than enough cash to cover it. I pay it off every month well before the due date. I paid cash for my truck (used), and I have never had a car payment. Debt free can be done, and it's really not that hard.
I'm in the same boat as you. College student and completely debt free. If I don't have the money for something, I just don't buy it. Simple really. I've never owed a penny in my life, but I guess life has only begun.
I couldn't get out of the student loan thing. Not from a family with money and the local Kommunitey Kolladge provided such a poor education that it would hurt me more than not having any college at all.
But they are getting down to a reasonable level. Below what I make in a year so that's good.
Never had any credit card debt.
I graduated college with a few people who had no college debt. They got better jobs than me. But somehow they are always broke. I'm not sure how that works.
But they are getting down to a reasonable level. Below what I make in a year so that's good.
Never had any credit card debt.
I graduated college with a few people who had no college debt. They got better jobs than me. But somehow they are always broke. I'm not sure how that works.
Originally Posted By: Tdbo
It only really makes sense IF you have the money to buy the car for cash but take advantage of a subsidized by the manufacturer and then dollar cost average the purchase of the car.
In 2012, I could have paid cash for my Accord but chose to take advantage of .9% Honda financing to purchase the car so that I could take advantage of the return (16.9% average return over the last 3 years in a variety of mutual funds through American Funds) and conserve capital at the same time. I can then cash flow the payment. In the end, it obviously is a 16% gain.
However, I'm not borrowing $ just to throw in a mutual fund. I am using inexpensive financing to augment an ongoing investment.
I don't think this is the same situation as the OP is in.
I'm really happy for you that it worked out so well. But I think you need to place a "*" next to that "16% gain" remark, because that is *not* typical. In fact, I would like to know which funds you had that performed so well so I can have a look at them, because it is rare for any single fund to beat the market by such a wide margin.
I'm sure you disagree, but my opinion is that if you're holding debt, and you're investing, that debt may as well be funding those investments because otherwise those funds could have gone to paying down your debt. It doesn't much matter to me that the collateral for that loan is a car.
It only really makes sense IF you have the money to buy the car for cash but take advantage of a subsidized by the manufacturer and then dollar cost average the purchase of the car.
In 2012, I could have paid cash for my Accord but chose to take advantage of .9% Honda financing to purchase the car so that I could take advantage of the return (16.9% average return over the last 3 years in a variety of mutual funds through American Funds) and conserve capital at the same time. I can then cash flow the payment. In the end, it obviously is a 16% gain.
However, I'm not borrowing $ just to throw in a mutual fund. I am using inexpensive financing to augment an ongoing investment.
I don't think this is the same situation as the OP is in.
I'm really happy for you that it worked out so well. But I think you need to place a "*" next to that "16% gain" remark, because that is *not* typical. In fact, I would like to know which funds you had that performed so well so I can have a look at them, because it is rare for any single fund to beat the market by such a wide margin.
I'm sure you disagree, but my opinion is that if you're holding debt, and you're investing, that debt may as well be funding those investments because otherwise those funds could have gone to paying down your debt. It doesn't much matter to me that the collateral for that loan is a car.
Originally Posted By: Mykl
I'm sure you disagree, but my opinion is that if you're holding debt, and you're investing, that debt may as well be funding those investments because otherwise those funds could have gone to paying down your debt. It doesn't much matter to me that the collateral for that loan is a car.
I know your post wasn't directed at me - but my thought process is the same.
I'm sure you disagree, but my opinion is that if you're holding debt, and you're investing, that debt may as well be funding those investments because otherwise those funds could have gone to paying down your debt. It doesn't much matter to me that the collateral for that loan is a car.
I know your post wasn't directed at me - but my thought process is the same.
Originally Posted By: Miller88
I graduated college with a few people who had no college debt. They got better jobs than me. But somehow they are always broke. I'm not sure how that works.
I wonder if it is semantics. "Broke" as in they spent their money elsewhere--they maxed out retirement, put some into savings, some into an index fund; and then after rent and food, have "nothing" left to spend frivolities.
Or they just had college paid for and are poor spenders. Can't tell.
I graduated college with a few people who had no college debt. They got better jobs than me. But somehow they are always broke. I'm not sure how that works.
I wonder if it is semantics. "Broke" as in they spent their money elsewhere--they maxed out retirement, put some into savings, some into an index fund; and then after rent and food, have "nothing" left to spend frivolities.
Or they just had college paid for and are poor spenders. Can't tell.
Originally Posted By: Fordtrucktexan
Congrats dude!!
I did the same thing last year, owed $4k on my F250.
In Jan 13' I moved out of the last place I was renting and after draining my bank account in high bills and high rent, I told myself I was finished. Come heck or high water, I was going to pay off my debts and buy my own house.
I swallowed my pride and moved back in with my folks and continued to pay rent - to myself. I put the exact amount I was paying for rent into my savings every month. To compensate the 'rents for putting up with me, I fixed all the misc broken items around the house and on their cars. I think they came out on the better end of that deal, LOL. I also used what little extra money I had to buy old non-running cars to flip and earn money towards the goal - house down payment.
In March 14' after a good bonus from work, income tax return, and selling my last 'flip' truck, an 02' F250 7.3, I met my goal. I actually negotiated a good enough deal on the house that I was able to pay the $4k cash payoff on the truck as a bonus, that lowered my monthly bills by $350 a month, vs barely putting a dent in the mortgage if I had used it in the down payment.
Very cool...that is a great success story.. Congratulations on having the discipline and wisdom to get on track to financial independence.
Congrats dude!!
I did the same thing last year, owed $4k on my F250.
In Jan 13' I moved out of the last place I was renting and after draining my bank account in high bills and high rent, I told myself I was finished. Come heck or high water, I was going to pay off my debts and buy my own house.
I swallowed my pride and moved back in with my folks and continued to pay rent - to myself. I put the exact amount I was paying for rent into my savings every month. To compensate the 'rents for putting up with me, I fixed all the misc broken items around the house and on their cars. I think they came out on the better end of that deal, LOL. I also used what little extra money I had to buy old non-running cars to flip and earn money towards the goal - house down payment.
In March 14' after a good bonus from work, income tax return, and selling my last 'flip' truck, an 02' F250 7.3, I met my goal. I actually negotiated a good enough deal on the house that I was able to pay the $4k cash payoff on the truck as a bonus, that lowered my monthly bills by $350 a month, vs barely putting a dent in the mortgage if I had used it in the down payment.
Very cool...that is a great success story.. Congratulations on having the discipline and wisdom to get on track to financial independence.
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