Dave Ramsey, debt, credit cards, retirement, etc

[SuperJETT]

So, one has to die old, rich and bored because he should not take a loan for a toy?

I know your record is stuck, hasn't it worn through and broken yet?

 

[Matt_E]

I am not old, I am not rich, and I am not bored.

I got toys that are paid for.

Are loans the only way you can afford stuff? :dunno:

 

[Big Kahuna]

I am not old, I am not rich, and I am not bored.

I got toys that are paid for.

Are loans the only way you can afford stuff? :dunno:

for some, yes.......

 

[SuperJETT]

for some, yes.......

And in the long run, you get to buy fewer toys if you do because a good portion of your money goes to the bank.

 

[SuperJETT]

Here's an example, 3 years ago this month, when we had 2 car payments plus a home equity line of credit, we paid over $155 in interest alone in August of 2005.

Last month, we paid no interest and actually earned over $18 from our ING accounts.

That's one month, a $170 swing. Over the course of a year, that's over $2000 to the positive.

 

[douglee25]

Here's a scenario... I don't know your friend MattE, but this could apply to anyone.

1. 30k loan, 6% interest, 10 year term - Payment $333/month, $3996/year

2. If the parents have kids age 10 and 12, they have roughly say 8 - 10 years before they leave the house and go out on their own. Ideally these next 8 - 10 years are prime years to spend time with your children.

3. If the parents saved vs. buying with a loan, it would take them 7.5 years. We'll round that up to 8 years because boating season would basically be over by the time the funds would be available.

4. Now the parents have the funds available but the kids are out of the house/college/etc. Opportunity is now lost to spend time boarding/tubing etc on the boat.



If you have the cash available, go for it. If you don't have 100% of the funds, loans make it possible for those with good credit.

So in summary, $4k per year is the opportunity cost to spend more time with your kids prior to them leaving the house. Some say you can't put a price on time spent with your kids.

Doug

 

[Big Kahuna]

Here's a scenario... I don't know your friend MattE, but this could apply to anyone.

1. 30k loan, 6% interest, 10 year term - Payment $333/month, $3996/year

2. If the parents have kids age 10 and 12, they have roughly say 8 - 10 years before they leave the house and go out on their own. Ideally these next 8 - 10 years are prime years to spend time with your children.

3. If the parents saved vs. buying with a loan, it would take them 7.5 years. We'll round that up to 8 years because boating season would basically be over by the time the funds would be available.

4. Now the parents have the funds available but the kids are out of the house/college/etc. Opportunity is now lost to spend time boarding/tubing etc on the boat.



If you have the cash available, go for it. If you don't have 100% of the funds, loans make it possible for those with good credit.

So in summary, $4k per year is the opportunity cost to spend more time with your kids prior to them leaving the house. Some say you can't put a price on time spent with your kids.

Doug

Bingo

 

[SuperJETT]

OMG, if that's the only opportunity there is to spend time with my kids, then I might as well kill myself now.

That is a ludicrous example.

 

[The Penguin]

and how about saving/investing that $4000 per year in your kids college fund?

or why does it have to be a financed $30K boat? why not pay cash for something not as nice (and cheaper)?

it's all part of the terrible "i want everything now" mindset of a large part of this country....especially those aged 40 and under. I know - I lived it, and now that I'm out from under that burden - it's a huge relief.

 

[douglee25]

OMG, if that's the only opportunity there is to spend time with my kids, then I might as well kill myself now.

That is a ludicrous example.

and how about saving/investing that $4000 per year in your kids college fund?

or why does it have to be a financed $30K boat? why not pay cash for something not as nice (and cheaper)?

it's all part of the terrible "i want everything now" mindset of a large part of this country....especially those aged 40 and under. I know - I lived it, and now that I'm out from under that burden - it's a huge relief.

It's not a terrible example. It's a typical example.

The college funds are already taken care of, that's why they couldn't afford buying the boat outright.

Everything is a compromise guys. I swear the people that listen to Dave are almost 'cult like'. There are 10 different ways to skin a cat. Dave may have a lot of good things to say, but Dave's way isn't the only way.

Doug

 

[The Penguin]

I don't listen to Dave.

But I do agree with you on the "cult like" following he has....just look at JETT oke:

 

[Big Kahuna]

It's not a terrible example. It's a typical example.

The college funds are already taken care of, that's why they couldn't afford buying the boat outright.

Everything is a compromise guys. I swear the people that listen to Dave are almost 'cult like'. There are 10 different ways to skin a cat. Dave may have a lot of good things to say, but Dave's way isn't the only way.

Doug

There is always another way.

 

[Matt_E]

Here's a scenario... I don't know your friend MattE, but this could apply to anyone.

1. 30k loan, 6% interest, 10 year term - Payment $333/month, $3996/year

2. If the parents have kids age 10 and 12, they have roughly say 8 - 10 years before they leave the house and go out on their own. Ideally these next 8 - 10 years are prime years to spend time with your children.

3. If the parents saved vs. buying with a loan, it would take them 7.5 years. We'll round that up to 8 years because boating season would basically be over by the time the funds would be available.

4. Now the parents have the funds available but the kids are out of the house/college/etc. Opportunity is now lost to spend time boarding/tubing etc on the boat.



If you have the cash available, go for it. If you don't have 100% of the funds, loans make it possible for those with good credit.

So in summary, $4k per year is the opportunity cost to spend more time with your kids prior to them leaving the house. Some say you can't put a price on time spent with your kids.

Doug

Is spending 4k on a loan per year the only way to spend time with the kids? :dunno:
Is money a pre-requisite to having a good time with children?

I don't have loans, and I spend plenty of time with my 3 boys. We go camping, back-packing, take trips to the beach, etc.
I'd rather teach them proper money management, invest in their college fund, and spend time with them that doesn't involve getting into debt.

Now....if going into debt were the ONLY way to spend time with my children, I might consider it.
But far from it, and you know that.

 

[SuperJETT]

In that example of $30k at 6% for 10 years, that's $9967.38 in interest, they paid 33% more for the boat!!!

You want to spend time with your kids, how about this, go for a walk with them, go out and play in the backyard WITH THEM (not just tell them to go play), go camping with them, etc.

BTW, we're saving up to replace one of our vehicles, and will probably have the money by spring time. It's amazing how much you can save up when you're not making payments every month.

 

[Matt_E]

Not having payments is a special peace of mind that's kind of hard to explain.
Not owing anybody anything is great.

 

[douglee25]

You guys all missed the point. I didn't once say that taking a loan for a boat was the ONLY way to spend time with the kids. It was one option. One scenario. One possibility that MattE's friend may have used as justification for their purchase. They still may camp, take walks, play catch, all with their children. Boating is just another piece of the pie.

I don't know their position, their finances, their anything. Maybe they got the boat at a 33% discount off of blue book? So in the end, they break even? Again, I don't know. For every answer I give, there is always going to be a (Dave) rebuttal.

Doug

 

[Big Kahuna]

In that example of $30k at 6% for 10 years, that's $9967.38 in interest, they paid 33% more for the boat!!!

You want to spend time with your kids, how about this, go for a walk with them, go out and play in the backyard WITH THEM (not just tell them to go play), go camping with them, etc.

BTW, we're saving up to replace one of our vehicles, and will probably have the money by spring time. It's amazing how much you can save up when you're not making payments every month.

Is there anything wrong with one of your vehicles? Why not just keep saving and keep what you got?

I would like to be debt free. Who would not be. Only debt we have is house, Cars and 1 card that we are paying off, we dont use it. Oh, it is Zero %. Toys are paid for. (SXR, SJ, Road Bike, 2 Mountain Bikes, Anita's Bike, Lawn Mower, Shop Construction)

But, if someone wanted to buy a boat, and they were in the position to where they could afford it, all other obligations are taken care of, there is nothing wrong with it. I dont know anybody that can save up 25k for a boat, by the time they did, you are looking at years down the road. Hopefully one day when Izzy is old enough, we will have a boat, most likely it will be financed. But it would be worth it. My fondest memories growing up were on the lake with my family skiing. That is where my love for the water came from. I hope she will be the same.

 

[Matt_E]

Hey, whatever floats your boat. :biggthumpup:

It happens to work for me, and I like sharing that knowledge.

 

[Big Kahuna]

Free Advice is the best!!!!!!!!!!!

 

[Matt_E]

You get what you pay for. :haha: