Keep your cash. While debt free is nice and saying you'll repay the savings is a great idea it often doesn't work out that way. If you have to make the payments you make them, if they're optional it's too easy to find some other use for the money and it may or may not get put back.
Murphy, who rules the earth, also says that if you have money in the bank you won't need it - if you don't have money in the bank you will need it. So if you pay off the RV with your savings, something will come up and you'll then need the money you just spent and have to take out a loan on the house to cover the expense. I'd think you're better off keeping the money in the bank and the loan on the RV instead of the house.
What we're doing is leaving the cash in the bank and doubling up on our payments - we make a payment twice a month instead of once and them pay a little extra in each of those payments. That get's the loan paid off in a reasonable amount of time and still leaves our cash available if we were to need it for some emergency.
John Ewing
2007 Allegro Bus 42QRP ("TisIt")
2005 Sportster/HydraLift ("Dinky")
2002 Miata toad ("Mellow Yellow") www.jandse.com
FMCA 104106
What goes around comes around - always treat others the way you'd like them to treat you.
trkrhelp wrote: Keep your cash. While debt free is nice and saying you'll repay the savings is a great idea it often doesn't work out that way. If you have to make the payments you make them, if they're optional it's too easy to find some other use for the money and it may or may not get put back.
Murphy, who rules the earth, also says that if you have money in the bank you won't need it - if you don't have money in the bank you will need it. So if you pay off the RV with your savings, something will come up and you'll then need the money you just spent and have to take out a loan on the house to cover the expense. I'd think you're better off keeping the money in the bank and the loan on the RV instead of the house.
What we're doing is leaving the cash in the bank and doubling up on our payments - we make a payment twice a month instead of once and them pay a little extra in each of those payments. That get's the loan paid off in a reasonable amount of time and still leaves our cash available if we were to need it for some emergency.
Yep what John says too. I met Murphy lol. He's not a reasonable guy.
We are doing the same thing as John, plus for us, the savings is mostly in tax deferred accounts, so we don't want to disturb them, if possible, until we have to start taking minimum distributions because of the tax implications.
And Murphy does hang around RVers, especially if you buy a used coach. We had our share of "oops" when we first started and have since built a certain amount each month into repairs - actually put it in a separate account (along with routine maintenance). Sure is nice to have it there just in case.
Barb
Barb & Dave - full-timing Traveling catpanions Kit (age 18) and Shadow (age 11) Figment II (2002 Alpine 36 MDDS) Mischief (2004 Subaru Forester Toad) FMCA - F337834, SKP #90761 http://homepage.mac.com/barbaraok/ Our blog
Grannyx6 wrote: Would you pay off mtr hme with savings?
Quick answer? Yes, absolutely. There is no substitute for being totally debt free...... It frees up all your lines of income and savings for much better things when there are no payments to make.
That said, I never borrowed a nickel in my life until I was out-of-state several years ago, and happened upon a new Mercedes-Benz automobile I wanted to buy on-the-spot at a MB dealer. I didn't happen to be carrying $45,000 in cash on me, however I did have my checkbook, which had $5,000 in it. I wrote a down payment check for $4,000 and applied for the first loan in my life at 47 yr. old. LOL! When I got home, I paid the car off in 14 months with ongoing income.
Depending on your cash or liquid balances vs. the cost of the MH would be a matter of personal consideration. The question you need to ask yourself is this; if the RV was paid for, would you borrow that much money from the bank to invest in the stock market? No one ever says 'yes' to this question, so you can see the exposed risk you are carrying by not paying cash for the RV in that exercise. My rule of thumb is if you can write a check any day of the week on the balance you owe, then you have a good shot at completing your obligations of bite-sized payments on the coach. It's hard to part with large sums of money in cash for toys, but it is best to have 'em paid off.
Murphy moves in your coach with you, when it's financed.......not when it's paid for. I believe that most folks have that exactly backwards......but debt is a normal state for most folks, regardless of their ages.
as a former banker, consider the post about borrowing against your savings. I look at cash as an insurance policy. Sure I can pay off loans but then if a need arises, what will I do. I have cash back as my insurance policy for problems. Also, what is your ability to borrow? If you will not be able to borrow and have serious problems, you are in trouble. Bankers love to loan money to people who do not need it, those with need have trouble borrowing, which one are you. You may want to pay the loan down and keep some cash until you see where you really stand on everything. In terms of renting the house out. I have many rentals and it is a hands on job. Do you have someone to be your eyes, ears and fixer when problems occur? The real answer to your question is what are you comfortable with? Some sleep well with lots of debt on the theory that if the world goes south, they enjoyed it while they could. Others want to know they are debt free. The point of RVing is to enjoy yourself, you have a history of handling money, only you can answer the question. I dealt with all types of people, advice is good but it is up to you. You also need to think about what you would do if you have a problem, one-3 or 5 years from now and need cash. Good luck
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