I need to lose my car payment.

[srt4evah]

Originally Posted by Dadhawk

It's hindsight, so it looks good but doesn't prove anything. Using this same logic I could argue against it by pointing out its not a good idea because if you had NOT taken your money out before the .com crash or the real estate crash and paid for a car, it had the opposite effect.

You actually lost money by leaving your money invested rather than buying a car and losing your money more slowly that year.

Hindsight is understanding something after it's happened. If this were hindsight, that would require that I didn't understand the stocks would appreciate and did NOT buy them, only to understand TODAY that that's what happened.

I understood that these stocks were rising and would continue to rise, so I bought them. That's called "foresight".

Trading stock is always a gamble, but there are safe bets and risky ones. I don't bother with the risky ones.

And FWIW, I did lose about $400k in value in 2007 when the real estate market crashed the whole economy, but so did virtually every investment company and financial institution. The stock market has now surpassed the level it was at in 2007. All that matters is where you're at when you sell the stock, so dropping $400k 8 years ago didn't mean I lost a dime because I didn't sell.

If you don't own and trade stocks, I'm not here to give a seminar on it. The whole point here is it's not hard to beat 1.65% you're "losing" on a low-interest car loan if you know how to invest. 30-40% is not common or typical, but that's where I'm at over the last few years.

Don't ask me to set up your stock picks for you, making money off trading is not supposed to be layman's work, or easy, it takes a lot of insight and research.

[Dadhawk]

Originally Posted by srt4evah

Hindsight is understanding something after it's happened. If this were hindsight, that would require that I didn't understand the stocks would appreciate and did NOT buy them, only to understand TODAY that that's what happened.
....

My argument was only that using a successful single year (or multiple years) to prove your point does not mean your point applies to everyone. Single years (or multiple years) with losses disprove your point in the same way.

Again, for you and I (and yes, I do own stocks (OK, mutual funds, I do not buy single stocks), do make money on them, and was not asking for a seminar) it is a philosophical discussion about how we prefer to use our assets. I have no problem giving up the money because in the end money isn't really worth anything until you spend it (similar to your argument about loses not being a lose until you sell) and I am obviously more risk adverse than many here.

It's all good either way. Your approach is wrong for me, my approach is wrong for you. I think we can both live with that.

[stugray]

Originally Posted by Dadhawk

I think idiot is a strong word, its just a choice as to how you decide to spend your money.

Ok here's another one for you.
I currently put about $1100 per month into my 401K WHILE I am paying 3% financing on my BRZ.

Using your logic, that is Stupid because I should just use that $1100 to pay for the car instead of financing it.

However, that $1100 is matched 50% (so thats $550 in FREE money) by my Employer AND that account has been making me over 30% ROI for the last 10 years.
Which is smarter take that $1100 to pay for may car or finance my car at 3%?

So, I could have saved for about 23 months and had enough to buy the car outright or have: $37950 in my 401K making me 30% while paying 3% on the financing.

Sorry, but if I choose paying outright (at the expense of NOT putting the money in the 401K) then I AM STUPID.

[Braces]

It's funny. This same topic shows up on other hi-end car forums such as R8Talk or Ferrarichat. Some members say if you can't afford to pay cash for the car ... then you shouldn't have the car (we're talking Ferraris, Lambos, R8, etc). Other members mention the low finance rates (<2%) and how their money is making more money in their investments. Doesn't matter if we're talking about a 25K car or a 250K car. The attitude is the same.

IMHO: paying cash is the right way. There is something refreshing in knowing that you own something free and clear. It just feels good.

I also understand that not everyone is fortunate to pay cash and certain life situations require loans. But PLEASE!!!! Stay away from credit cards .... unless you pay the monthly balance off in full .... and receive travel points.

[PhantomX]

Just FYI, there's no such thing as "free money." The government will tax you either way. I could join in on this, but I'd rather just watch. Carry on.

[Dave-ROR]

Originally Posted by Braces

I also understand that not everyone is fortunate to pay cash and certain life situations require loans. But PLEASE!!!! Stay away from credit cards .... unless you pay the monthly balance off in full .... and receive travel points.

Yep, keeping those CC balances at zero is probably the only advice everyone in here will agree with haha

I do embrace their daily usage because of cash back cards, and point/mileage cards. I took a 11 day vacation the last two weeks and only paid $120 in hotels because of daily usage of CCs for points (paying off monthly).

Had points from the Amex I used for work that paid for the majority of the car rental too

If you are spending the money anyways then it makes no sense to buy gas, groceries, tires, etc with a debit card instead of a CC you get something back from - as long as you don't end up paying CC interest...

[Dadhawk]

Originally Posted by stugray

Ok here's another one for you.
I currently put about $1100 per month into my 401K WHILE I am paying 3% financing on my BRZ.

Using your logic, that is Stupid because I should just use that $1100 to pay for the car instead of financing it.

However, that $1100 is matched 50% (so thats $550 in FREE money) by my Employer AND that account has been making me over 30% ROI for the last 10 years.
Which is smarter take that $1100 to pay for may car or finance my car at 3%?

So, I could have saved for about 23 months and had enough to buy the car outright or have: $37950 in my 401K making me 30% while paying 3% on the financing.

Sorry, but if I choose paying outright (at the expense of NOT putting the money in the 401K) then I AM STUPID.

There is no reason you can't do both, unless the only savings you do is into your 401K since you are, after all, making a car payment and therefore reducing the amount of money you can invest each month by the cost of the car payment that could (in theory) be put into your employer's matching program and earn the rate of return.

Like it or not, you are spending the money to purchase the car, you are just doing it after the fact, paying someone else for the privilege by paying them for "investing" in you. I prefer to do it before the fact, having someone pay me for doing so.

Again, neither one of us is going to convince the other that our method is better.

[stugray]

Originally Posted by PhantomX

Just FYI, there's no such thing as "free money." The government will tax you either way.

I am sorry, but HOW does the govt tax me on my 401K contributions OR the company match?
Oh... that's right - they dont.

[Dave-ROR]

Originally Posted by PhantomX

Just FYI, there's no such thing as "free money." The government will tax you either way. I could join in on this, but I'd rather just watch. Carry on.

Until they tax company contributions at 100% then it is free money.

[Dadhawk]

Originally Posted by Dave-ROR

I do embrace their daily usage because of cash back cards, and point/mileage cards. I took a 11 day vacation the last two weeks and only paid $120 in hotels because of daily usage of CCs for points (paying off monthly)....

You trying to start a whole other argument string???

[PhantomX]

Originally Posted by stugray

I am sorry, but HOW does the govt tax me on my 401K contributions OR the company match?
Oh... that's right - they dont.

Are you getting angry? o.O

I'm pretty sure 401k isn't entirely safe from being taxed. As I recall, it's taxed as a form of income once you retire and start receiving it. There's more to it, but like I said, I'm not interested in being IN this debacle.

[Dave-ROR]

Originally Posted by Dadhawk

You trying to start a whole other argument string???

Haha maybe You have something against points cards when one doesn't carry a balance ?

[Tcoat]

Originally Posted by Dave-ROR

Yep, keeping those CC balances at zero is probably the only advice everyone in here will agree with haha

I do embrace their daily usage because of cash back cards, and point/mileage cards. I took a 11 day vacation the last two weeks and only paid $120 in hotels because of daily usage of CCs for points (paying off monthly).

Had points from the Amex I used for work that paid for the majority of the car rental too

If you are spending the money anyways then it makes no sense to buy gas, groceries, tires, etc with a debit card instead of a CC you get something back from - as long as you don't end up paying CC interest...

I have company card and a personal Canadian Tire card that gives me 4% back on everything I charge. When I travel (a lot) I do everything I can on my card and then just pay it off with the company card before the interest is applied. The company is fine with it and I have got thousands over the years.

[Dave-ROR]

Originally Posted by PhantomX

Are you getting angry? o.O

I'm pretty sure 401k isn't entirely safe from being taxed. As I recall, it's taxed as a form of income once you retire and start receiving it. There's more to it, but like I said, I'm not interested in being IN this debacle.

Of course. However the free money he is talking about is a company match. If he puts in $100,000, with a 50% company match they put in $50,000. For easy math, let's assume a 25% flat tax rate when he retires.. and we will assume that money made nothing for easy math also, that would be $37,500 of free money that he himself did not pay out of his income.