Why do so many of the 'Personal Finance' threads...

[Ima saver]

My husband is a builder who charges material at home depot every month. We get the money up front (in the form of draws) to pay for this material, so we always have the money to pay off that credit card when it comes due.
As far as how i built up my assets, I started slowly. I read and learned about mutual funds and then I opened, one, than two, than three. I had $50 a month automatically going into these funds, each month. If I had extra money , I sent it. I opened these funds for only $50 each. Then I opened IRA's for each one of us.
It seemed like for years, my balances were so low, but I keep plugging away, a little at a time. I have had some great years in mutual funds, and some not so great! But I know that the funds are worth a lot more than the money I put into them.
I now have over 300K in my mutual funds and I had stopped contributing in order to build up the money in my savings and money market funds.

[cbmeeks]

That is great.

At least you get the money up front. But wouldn't you agree that most people don't and if the customer doesn't pay, then guess who does? :-)

[lrjohnson]

I was surpised to think many come to this site to get out of debt. I haven't had debt in years, and it was maybe somewhere between $4000 and $6000. A small amount was consumer, the rest were fines and medical. I didn't/don't have any need for a site that focusses primarily on debt, but I loved this site when I found it.

[Ima saver]

I have never had much of a problem with debt either. I usually do finance my cars, but it is at low rates, so that does not really bother me. That is just the cost of having a car.

[cbmeeks]

Originally Posted by Ima saver

I have never had much of a problem with debt either. I usually do finance my cars, but it is at low rates, so that does not really bother me. That is just the cost of having a car.

With your finances, why do you go into debt for a car???? Even at 1%, you are paying 1% when you don't have to.

That is not the cost of having a car. You can totally own a great car and not pay any interest. :-)

[DivaJen]

Originally Posted by lrjohnson

I was surpised to think many come to this site to get out of debt. I haven't had debt in years, and it was maybe somewhere between $4000 and $6000. A small amount was consumer, the rest were fines and medical. I didn't/don't have any need for a site that focusses primarily on debt, but I loved this site when I found it.

I agree - we aren't in debt and haven't been, but I still enjoy this site and get a lot out of it.

[cbmeeks]

Plus, some people like helping others...

[debtfreesteve]

Originally Posted by cbmeeks

With your finances, why do you go into debt for a car???? Even at 1%, you are paying 1% when you don't have to.

That is not the cost of having a car. You can totally own a great car and not pay any interest. :-)

I know this is a Dave Ramsey thought, but, it's true.... if you had paid for cars, would you borrow against them to invest in mutual funds? Same thing isn't it?

[wwjdmsl]

Originally Posted by cbmeeks

Plus, some people like helping others...

Yes ! Encouragement, help, treating others the way we like to be treated...awesome !

[cbmeeks]

Originally Posted by debtfreesteve

I know this is a Dave Ramsey thought, but, it's true.... if you had paid for cars, would you borrow against them to invest in mutual funds? Same thing isn't it?

Egggxactly

If I had 200k in the bank, car loans would be the LAST thing I would do.

[slimcustomer]

Originally Posted by debtfreesteve

I know this is a Dave Ramsey thought, but, it's true.... if you had paid for cars, would you borrow against them to invest in mutual funds? Same thing isn't it?

I personally would, as that is the type of thinking I use to make money. However, some car insurers mandate a more costly lower deductible insurance policy when you have a car loan. Plus, I don't like driving my personal wealth around, so there's probably not enough equity in my cars to make borrowing against them worthwhile.

[Ima saver]

The last car was at 0% interest! I keep a lot of cash to pay for the houses we build, so we do not have to get a loan at the bank. When we sell, we get a big check and get to keep all of it!

[slimcustomer]

Originally Posted by debtfreesteve

"revolve" around finding the best rates on credit cards, or concern the use and management of borrowed money.

Am I the only person on this board that sees a problem with this?

I guess I'm Crazy for thinking this, but I've realized over the past 3 years, that the object of personal finance, is to increase our net worth, and the less I paid the bank, either in lump sum monthly, or in payments, the wealthier we have become.

Just curious to see if anyone else here felt the same way, not trying to be argumentative, at all.

When you borrow at a lower rate than you invest at, you are increasing your net worth. You can do this with quite little risk or you can be an outright gambler. The former deserves more discussion than the latter IMO.

[Ima saver]

Well, I am not a gambler, but who wants to turn down 0% interest?

[jmjj215]

Originally Posted by debtfreesteve

I know this is a Dave Ramsey thought, but, it's true.... if you had paid for cars, would you borrow against them to invest in mutual funds? Same thing isn't it?

If I could borrow money at 1% and stick it in ING (now at 4.25%) I'd do it in a heartbeat. That 200k that ima has in savings is probably making her much more money than the 1% she's paying to borrow for the car.

That being said, I personally pay cash for cars.

To each his own. Both methods are perfectly fine in my opinion.

[lrjohnson]

jmjj:

The only caveat I would add, myself, is that both are fine if they are conscious decisions. A lot of people, myself included, don't always weigh all the factors, especially in areas in which we aren't fully educated. There may be people who have a 1% car loan due to good credit, and didn't even think out that the extra made in savings was a better value. (Not Ima, I'm sure.)

[Ima saver]

Believe it or not, my husband believes that his cars are an investment!! Since he works so hard, 7 days a week, I indulge his one vice, cars!! That said, we have a 1933 ford victoria that we paid $40,000 for, it is now worth $60,000. Our 1978 corvette is appraised at more than what we paid for it in 1978. (There were only 16 cars that came into the dealership in primer color and were painted non corvette colors and we have one) Now if we can just hang onto this vette for about 30 years, we may get our money back on that one too.

[Ima saver]

In the meantime, we drive purdy!!

[poundwise]

Was one of the previous posters actually saying that he would be willing to LOSE money to avoid having a loan?

If you can get a car loan at, let's say, 2.5% you would pull money out of a 4.5% interest money market account just to be able to buy the car with cash? That doesn't make mathematical sense. You are 2% to the positive to take the loan and keep your cash earning the higher interest.

I appreciate the desire to avoid loans/debt, etc. but math is math.

[Tree0164]

Originally Posted by Fern

Hey, I think Steve had a valid point.

I've been a member for over a year now, i think, and i've noticed not just the over-emphasis on credit card rates but also, i hate to say, what i think is a really misplaced emphasis on saving $3 here or $4 here, dropping quarters in a jar, picking up loose change at the ATM and things like that.

I never said anything in the past becus i realized thta everyone is at a different personal stage as far as investments/saving/debit goes, and I didn't want to offend anyone.

i know that many will respond, well, every dollar counts. Yet, we all have just so much free time in the day to devote to this stuff, so i just have never understood why so many people obssess about the small change when, if they just focused their attention on bigger payback issues like saving on car insurance, refinancing their mortgage, etc., they could reap much bigger dividends.

I was going to post something but I will just say a simple ditto!!