Want to buy Bluebird

[Dorn Hetzel]

My favorite form of financing is the periodic credit card deals of 0% for a
year or so on balance transfers. If the fee has a cap, which they always
did until lately and some do still, I just take the money and put it in my
savings account at 4.75% $90 to borrow $19,000 for 12 months and earn
almost $1000 in interest... Who would turn that down?

Of course, they play the odds that you won't be ready or willing to pay it
all back before the special deal expires, and I'm sure many can't or don't,
but if you are willing to pay attention to the details, you can come out
ahead

On Nov 26, 2007 2:48 PM, bubblerboy64 wrote:

> Jon, You want the economy to crash? :-) Pay cash? What's cash?
> This is way off topic, but there is a generational difference isn't
> there? Interesting how priorities are affected by past experience
> and age.
> John
> The Big Napper
>
>
> >
> > --- In WanderlodgeForum@yahoogroups.com,
> "Gregory OConnor"
> > wrote:
> > >
> > > If you want it , buy it. If you cant afford it, borrow it.
> > >
> > > I understood 'Good reasons to finance stories' were
> justifications
> > > for making a financed purchase. A reflective look at my position
> > > reveal that my "financing is for idiodt theories" ARE healing
> > > justifications wence turned down for a loan.
> > >
> > >
> > >
> > > GregoryO'Connor
> > > 94ptRomolandCa
> > > "Motorhomes with slides are for idiots"
> > >
> > >
> > > --- In
WanderlodgeForum@yahoogroups.com,
> "Ryan Wright"
> > > wrote:
> > > >
> > > > On Nov 23, 2007 1:35 PM, martingregg598 wrote:
> > > > >
> > > > > Financing may be the way to go. Let's say that you are going
> to
> > > buy a
> > > > > $100,000 plus BB. If you get a 20 year note at 6% interest
> for
> > > 100g,
> > > > > the unit qualifies as a second home and you can deduct the
> > > interest,
> > > > > and you leave your 100g properly invested returning an
> average
> > > of say
> > > > > 10 %, you are making a 4%- plus gain every year on your 100g
> > > > > (depending on your specific tax situation).
> > > >
> > > > Sort of, not exactly. You need to take money out of that $100g
> > every
> > > > month to make the payments on the coach, so you're going to
> slowly
> > > > dwindle it down, reducing your return. Unless you make the
> > payments
> > > > out of your income, in which case I don't think you'll be all
> that
> > > > well off. Follow me here:
> > > >
> > > > In your example the payment would be $716.43 per month. If you
> > take
> > > > that same money and invest it at 10% over 20 years instead of
> > paying
> > > > it to the bank, compounded monthly you'd have almost $550k.
> > > >
> > > > On the other hand, if you leave your $100k in the bank for 20
> > years
> > > > and don't pay any extra into it because you're making payments
> on
> > > the
> > > > coach, at the end of the 20 years you'd have about $730k.
> > > >
> > > > Now 730 - 550 = $180k. Interestingly enough, at the end of the
> 20
> > > > years you'll have sent about $172k to the bank to pay for your
> > $100k
> > > > coach. Which leaves you only $8,000 ahead by financing it and
> > > keeping
> > > > your money in the bank.
> > > >
> > > > Let's look at the risk you get for your $8,000: You risk an
> income
> > > > crisis and not having the ability to repay your loan. If the
> > market
> > > > happens to be down about the same time, which is often the case
> in
> > > > financial hardships (Murphy's Law), you risk losing your
> > portfolio
> > > as
> > > > you yank everything out in a down market to get the creditors
> off
> > > your
> > > > back. You risk huge spikes in interest rates and fees should
> you
> > > miss
> > > > a payment by accident.
> > > >
> > > > Is it worth it? Not to me. Assuming you have the discipline to
> > > > re-invest the money you would have otherwise sent to the bank,
> I'm
> > > > paying cash for the coach and rebuilding my portfolio out of my
> > > > income.
> > > >
> > > > Now, if you're actually able to itemize the interest out on your
> > > > taxes, you might -- MIGHT -- be able to recover enough to make
> it
> > > > worth the effort. Typically, though, that isn't the case. The
> > > standard
> > > > deduction will typically be higher than the interest on the
> coach
> > so
> > > > unless you have other major things to itemize, you're no money
> > ahead
> > > > with the tax man.
> > > >
> > > > In my experience, financing for the interest or tax savings is
> > > usually
> > > > a negative to zero sum game, or otherwise close enough as to
> make
> > it
> > > > not worth the risk and/or the hassle.
> > > >
> > > > -Ryan
> > > >
> > >
> > I guess I'm from the old school of financing and that is pay for it
> > with cash!!! I really believe that is what is wrong with America
> > economy today and that is everything is on time payments. What
> > happen to the days that when you bought something and you paid for
> it
> > or you did not get it? Oh well if a person wants to pay 10 percent
> > interest on anything than go for it but for me its cash only and
> save
> > paying the interest. Product of the depression with a depression
> > attitude! Jon
> >
> > Jon
> > Rebel Bird
> >
>
>
>


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