z987k
Well-Known Member
At 2.9% to!
For anyone thinking of taking out a loan
- Thread starter JJ8Flyer
- Start date
Patrick
Well-Known Member
Doesn't have to be $20k, or $100k. You can happily borrow $10k for under 3% right now on used car loans from a select few banks. It's still free money.
z987k
Well-Known Member
I'm aware. Loans are almost, and some actually are, free right now. That's not a reason in of itself to go buy depreciating assets though.
GypsyPilot
Mohawk Town
You're still going to take a huge hit on depreciation. I have two cars that are paid off. The first one I bought new, and that was just stupid. My second one, a 4Runner, I recently paid cash for. I patiently waited until the right deal came along on Craigslist. That was a much smarter purchase. I will ALWAYS buy used now.
CoffeeIcePapers
Well-Hung Member
Mortgage is a debt.
Pilot Fighter
Well-Known Member
You're right, but if you have positive cash-flow on your real estate investments and liquid assets that could satisfy those debts, I'm going to let you get away with saying you are debt-free.
genot
Well-Known Member
Mortgage is and isn't a debt. The writeoffs are nice, but lets be honest, not many can buy a house with cash. The alternative is rent which produces no investment and no tax breaks. That's probably the one gimmie.
I've bought a mechanically sound '66 Cessna 150 and a brand new factory order 400 horsepower fire breathing wingless type vehicle, both cash. I took a massive hit on the Cessna. The car you can pry from my cold dead hands. In one instance depreciation is a legitimate concern and in another it isn't. As I've said, in any instance, a blanket statement is a wrong one.
To each their own and woe be to those who make unsustainable decisions.
I've bought a mechanically sound '66 Cessna 150 and a brand new factory order 400 horsepower fire breathing wingless type vehicle, both cash. I took a massive hit on the Cessna. The car you can pry from my cold dead hands. In one instance depreciation is a legitimate concern and in another it isn't. As I've said, in any instance, a blanket statement is a wrong one.
To each their own and woe be to those who make unsustainable decisions.
🦈💜
Well-Known Member
Unfortunately, the reality is that debt is viewed (mostly correctly) as the only way to "buy" yourself out of poverty. No, not all (or most) poor people are poor because they don't know how to save... it doesn't matter how carefully you save if you're working two minimum wage jobs, or if you're working a dangerous job for higher pay but lose the game of luck, or a loved one does, or your father has a heart attack, or your mother has a stroke and there's absolutely nothing you can do but part with the little bit you'd been able to save.
Poverty is a situation characterized by extremely low liquidity, low opportunity, low collateral, and a perceived increase in risk. Many poor people are assiduous savers ... but frankly, when you have a choice to make between buying a cheap razor (as not shaving puts you at risk of losing your job) which will break in three months or an expensive razor which will last a few years and make it up in the long run ... you often have no choice but to buy the cheaper one.
I escaped poverty because I got lucky. My parents saved all their lives, and they both just retired on the $100k they were able to scrape together over the course of a 40-year marriage, both working several jobs the whole time. Medical issues, issues with the house, cars, etc., came up all the time and forced them to dip into savings to compensate. Discretionary spending was low.
Most people who thumb their nose at the poor don't realize how much help they received from their parents or society, and many refuse to acknowledge how lucky they were to escape it themselves.
I was lucky—I found a passion for computers, programming, unix, and networks as a kid, and it happened at exactly the right time. My only other option would have been going into debt to finish my certificates and ratings. Would I have been better off? Probably... but I refuse to second-guess myself or spend long on "might have been"s. (There's no point in living a life looking backward)
I wish I could help with perspective here ... there's a tremendous gap between perception and reality, and most people viewing from the outside have their perceptions colored heavily by the opinions they've developed or received from others... but the most insidious part is that people view their perceptions as objective and fail to recognize their level of bias.
(No, I do not claim to be immune to the perils of perspective—that is the sole reason I post here, or anywhere. If I believed that I was objectively right, I wouldn't bother reading or debating anyone else's points. Considered debate is one of the best mechanisms for challenging one's own viewpoints by attempting to examine those of others, and improving the objectivity of one's analysis.)
~Fox
Poverty is a situation characterized by extremely low liquidity, low opportunity, low collateral, and a perceived increase in risk. Many poor people are assiduous savers ... but frankly, when you have a choice to make between buying a cheap razor (as not shaving puts you at risk of losing your job) which will break in three months or an expensive razor which will last a few years and make it up in the long run ... you often have no choice but to buy the cheaper one.
I escaped poverty because I got lucky. My parents saved all their lives, and they both just retired on the $100k they were able to scrape together over the course of a 40-year marriage, both working several jobs the whole time. Medical issues, issues with the house, cars, etc., came up all the time and forced them to dip into savings to compensate. Discretionary spending was low.
Most people who thumb their nose at the poor don't realize how much help they received from their parents or society, and many refuse to acknowledge how lucky they were to escape it themselves.
I was lucky—I found a passion for computers, programming, unix, and networks as a kid, and it happened at exactly the right time. My only other option would have been going into debt to finish my certificates and ratings. Would I have been better off? Probably... but I refuse to second-guess myself or spend long on "might have been"s. (There's no point in living a life looking backward)
I wish I could help with perspective here ... there's a tremendous gap between perception and reality, and most people viewing from the outside have their perceptions colored heavily by the opinions they've developed or received from others... but the most insidious part is that people view their perceptions as objective and fail to recognize their level of bias.
(No, I do not claim to be immune to the perils of perspective—that is the sole reason I post here, or anywhere. If I believed that I was objectively right, I wouldn't bother reading or debating anyone else's points. Considered debate is one of the best mechanisms for challenging one's own viewpoints by attempting to examine those of others, and improving the objectivity of one's analysis.)
~Fox
jtrain609
Antisocial Monster
Cars aren't investment, they're an expenditure, just like your washing machine.
I don't think about the depreciation on my washing machine, because I have no intention of selling my washing machine.
I also have no intention of selling my cars. I will drive them until the wheels fall off, and then I'll get new wheels.
jtrain609
Antisocial Monster
Also, let me give you guys two more examples of how things CAN work out.
I started flying in 1998. In the summer of 2001 I finished my private, and in the fall of 2001 I enrolled in undergraduate.
9/11 happens, everything comes to a halt in this industry.
I fly slowly during undergraduate, finishing my training in the summer of 2005. I instruct during 2006, work at a freight company in 2006/2007, I'm hired by a regional in the summer of 2007, and I'm furloughed by the fall of 2008. In the fall of 2009 I enter grad school, and through a very long, complicated process, graduate from that program in the spring of 2013 and go back to work for the regional.
If things keep moving, I'll upgrade in another year.
There's another guy on here who is the same age as me. He got his training done QUICKLY, and flight instructed in college, and also tried to get out ASAP. He graduated in something like 2004 with 1,500 hours, goes to a regional, upgrades in 2006, spends a year or so in the left seat, and goes to a legacy carrier.
He's AT his last job, and I've been at a regional (on and off) for 6 years and I'm still in the right seat.
Timing matters, and because timing matters, speed can matter. When 9/11 hit, if I had a better education on all of this, I would have saw that as the perfect opportunity to strike hard when the entire economy is in a lull and get training done quickly. Let's say I had done ATP's program during the summer after I graduated high school, before I got to undergraduate. At the time, their program was something like $25,000, which seemed like A COMPLETE SCAM at the time.
Adjusted for inflation, that $25,000 only costs $33,000 now. The PROGRAM has doubled in price, and you get the exact same thing. That wasn't a scam, it was the deal of a century and I wasn't interested in pursuing it "because it cost too much money."
Protip: Things will ALWAYS cost more tomorrow.
If I had done that, and then paid it off while in undergraduate, I would have been WAY ahead of where I am right now. That would have been about $600 a month to pay FOR FOUR YEARS while I was in undergraduate. That's EASY. When I was 18, that looked like HUGE money, but looking back, I could have EASILY made that much every month flight instructing part time.
I started flying in 1998. In the summer of 2001 I finished my private, and in the fall of 2001 I enrolled in undergraduate.
9/11 happens, everything comes to a halt in this industry.
I fly slowly during undergraduate, finishing my training in the summer of 2005. I instruct during 2006, work at a freight company in 2006/2007, I'm hired by a regional in the summer of 2007, and I'm furloughed by the fall of 2008. In the fall of 2009 I enter grad school, and through a very long, complicated process, graduate from that program in the spring of 2013 and go back to work for the regional.
If things keep moving, I'll upgrade in another year.
There's another guy on here who is the same age as me. He got his training done QUICKLY, and flight instructed in college, and also tried to get out ASAP. He graduated in something like 2004 with 1,500 hours, goes to a regional, upgrades in 2006, spends a year or so in the left seat, and goes to a legacy carrier.
He's AT his last job, and I've been at a regional (on and off) for 6 years and I'm still in the right seat.
Timing matters, and because timing matters, speed can matter. When 9/11 hit, if I had a better education on all of this, I would have saw that as the perfect opportunity to strike hard when the entire economy is in a lull and get training done quickly. Let's say I had done ATP's program during the summer after I graduated high school, before I got to undergraduate. At the time, their program was something like $25,000, which seemed like A COMPLETE SCAM at the time.
Adjusted for inflation, that $25,000 only costs $33,000 now. The PROGRAM has doubled in price, and you get the exact same thing. That wasn't a scam, it was the deal of a century and I wasn't interested in pursuing it "because it cost too much money."
Protip: Things will ALWAYS cost more tomorrow.
If I had done that, and then paid it off while in undergraduate, I would have been WAY ahead of where I am right now. That would have been about $600 a month to pay FOR FOUR YEARS while I was in undergraduate. That's EASY. When I was 18, that looked like HUGE money, but looking back, I could have EASILY made that much every month flight instructing part time.
Pilot Fighter
Well-Known Member
Not a very good tip. Some things will cost more, some things will cost less, and some things will stay about the same.
The idea that things will always cost more tomorrow helped plunge our economy into recession as millions bought houses they couldn't really afford on the premise that they would appreciate in value.
jtrain609
Antisocial Monster
Fuel.
Housing.
Food.
Find me something that was cheaper now compared to 10 years ago. I'll give you electronics, they're way cheaper now overall for what you're getting.
Pilot Fighter
Well-Known Member
Thanks for the hint. In terms of percentage of household income, the cost of food has continued to fall for about three decades.
My point was that every purchase should be evaluated on its merits and the likelyhood of something increasing in price still might not justify its purchase.
The recession has been a yard sale for those with some cash, so the market for many items is more attractive than ten years ago.
Pilot Fighter
Well-Known Member
Obviously, real estate is THE example that matters.
Old cars, boats, planes (some categories), and motorcycles are cheaper now than ten years ago while new examples of those items have certainly increased. I'm in the horse business and Thoroughbred prices have fallen compared to a decade ago. The recession has been a yard sale for those with cash.
Getting back to the context of the thread, how often is a purchase justified on the sole basis that it will be more expensive tomorrow?
Last edited:
Well, that war hammer of beer and basket of buffalo wings I had last night are probably cheaper too, but there is also a extreme loss of utility!
I'd pay you to take away the end product!
stormchaser
Well-Known Member
For every man that gets a free loan, there are 7,417 that don't. Ford just released Ford Credit results for the 3rd quarter of 2013. They have a profit of $427 million in that quarter alone. And this is NOT from the sales of cars...this is only the financing on those cars. Hardly free.
I respect any man's control over his finances, but the sad reality is you are the exception, NOT the norm. Ramsey simply addresses the norm.
exneophyte
Well-Known Member
Getting a 0% loan on a vehicle is hardly free. It's a sales gimmick and the cost of that loan is simply imputed into the sales price. It's similar to the same self-justifying logic that people tell themselves when they get a new $99 iPhone every two years because they can. That iPhone did not cost $99 in fact it was more like $600 but your carrier subsidized the cost up front in exchange for your contractual promise to pay them the agreed upon rate for two years without being able to take your business elsewhere.
Dave Ramsey can be a bit extreme, but he has to be to change peoples deep-seated minds and feelings on money. While he gets vilified for being a debt-free at all costs guy, his bigger theme is living within your means. One of his core concepts is "Keeping Up With The Joneses"...PS "They're Broke." I see way too many people, including pilots, trying to keep their heads above water financially so that they can appear from the outside like they are successful. Taking out a loan on a car isn't the end of the world as a car is a very important tool, but replacing said car every few years because you can does have costs. The drive it until the wheels fall of mentality is unfortunately very uncommon these days.
Take a drive through what you consider a rough residential neighborhood sometime and take note of the cars that are there. There will be some beaters, but you might be shocked at how new many of the cars are. To each his own, but living in a crap-hole so you can spend your money on monthly car and phone payments is lunacy. Then again when we pull up side by side at the stoplight the rims on your 2014 Escalade keep spinning and the rusted out rims on my 2000 Celica do nothing but get my wife and I to work and the store.
Dave Ramsey can be a bit extreme, but he has to be to change peoples deep-seated minds and feelings on money. While he gets vilified for being a debt-free at all costs guy, his bigger theme is living within your means. One of his core concepts is "Keeping Up With The Joneses"...PS "They're Broke." I see way too many people, including pilots, trying to keep their heads above water financially so that they can appear from the outside like they are successful. Taking out a loan on a car isn't the end of the world as a car is a very important tool, but replacing said car every few years because you can does have costs. The drive it until the wheels fall of mentality is unfortunately very uncommon these days.
Take a drive through what you consider a rough residential neighborhood sometime and take note of the cars that are there. There will be some beaters, but you might be shocked at how new many of the cars are. To each his own, but living in a crap-hole so you can spend your money on monthly car and phone payments is lunacy. Then again when we pull up side by side at the stoplight the rims on your 2014 Escalade keep spinning and the rusted out rims on my 2000 Celica do nothing but get my wife and I to work and the store.
Pilot Fighter
Well-Known Member
Some folks don't get it. Last week a friend of mine teased me about my toys (dirt bike, street bike, ATV, bass boat, sailboat, canoe, travel trailer, horse trailer, kayak, and my partially completed powered parachute), suggesting that I was living some lavish lifestyle. I pointed out that all of those toys and my car and truck cost a third what his new financed Mercedes will cost him.