Debt is morally and ethically neutral, neither good, nor bad. Debt can destroy lives, but it can also allow people to do things that could never happen otherwise. The first park we bought cost $1.6 million dollars, a figure that would be unabtainable without financing, regardless of how good as savers we were. We were able to use our savings for the downpayment and borrow the remainder. Without financing, the rich would be the only people able to buy large assets, essentially eliminating the ability of all other people to ever climb the economic ladder.
Brent and Gina wrote: An opposing opinion easily validated by anyone wanting to conduct an internet search:
The average American has $20K in credit card debt. This doesn't include all other forms of debt such as housing, transportion, and "luxury."
The average American has much more debt than assets. We are NEGATIVE on average.
Most of us live in a "want it now" culture. It is not a wise thing to encourage any debt-related manipulation as we, as a whole, are stupid financially. As a whole, yes we are idiots.
It has been documented over and over, case after case by the individuals themselves, that financial responsibility, such as those taught by Dave Ramsey and others, lead to prosperous life choices, sound futures, financial responsibility, and overall happiness.
OP, I would recommend you consider your audience.
sorry......I was not speaking of your quote "yes, we are idiots"...or speaking in a general way regarding the entire population....I spoke in very specific terms about a specific retiree...nothing more or less..
I am surprised that you were not able to discern that..
There are 3 numbers you need to be concerned with, And one problem with all 3.
First is the interest rate on your loan. (NOTE: This is after adjusting for the tax deduction you may be able to take if any)
Second is the rate of inflation
Third is the rate of return (interest) on investments. (likewise tax adjusted)
If the loan interest (adjusted) is less than either of the other two it pays to finance.
If inflation is greater than the investment return, it pays to SPEND .. The only time investment pays is when the rate of return (adjusted) is greater than inflation... Which with a good investment program is most of the time.
Nothin adds excitment like something that is none of your business
Kenwood TS-2000 housed in a 2005 Damon Intruder 377
Debt is morally and ethically neutral, neither good, nor bad. Debt can destroy lives, but it can also allow people to do things that could never happen otherwise. The first park we bought cost $1.6 million dollars, a figure that would be unabtainable without financing, regardless of how good as savers we were. We were able to use our savings for the downpayment and borrow the remainder. Without financing, the rich would be the only people able to buy large assets, essentially eliminating the ability of all other people to ever climb the economic ladder.
Bravo. Well said. Debt is not the problem-it's how the debtor handles it.
Subscribe to the 3 "L" rule-don't stop livin', lovin' and learnin'
RV-less for now but our spirits are still on the open road.
as a whole most people are not idiots. they are not saying lets go buy a 100K rig when we make $25K per year. charge it!!!! finance it!!! No, I believe most of the stats we see are forced life changes that can affect anyone at anytime to a catastrophic end in finances. (don't get me wrong, there are some idiots who charge even if income is lacking to cover and they take the chances and lose)
Agreed. And particularly on this forum, I think the bulk of people here are responsible, that's why I get irritated with the posts that act like we are all idiots and buying more than we can afford on credit. Every single person has their own circumstances, and judging someone for financing something (like someone in the OP for example, who had good reason for financing) is ludicrous.
I don't care who buys their RV with cash, but a lot of people judge those who don't. For me, I do not want to take a lump sum out like that all at once, because to me that is more irresponsible (and again, I am talking about ME, as no one else's financial situation is any of my business) as I would rather have that nest egg of money in the bank for the unforeseen. IF something catastropic came up, and I just had sunk savings of $20k in a rig, I'm screwed, or forced to go out and get credit. If I have a payment instead, that affords me a few things - 1) the payments are smaller, easier to manage monthly payment, and 2) having the cash in the bank helps tide me over vs waiting to sell an RV that could take awhile. A heck of a lot more pressure in this type of situation is created when having taken money you saved to buy the RV because in the case of this situation you won't get any money back until you sell the RV. Who knows how long that could take. I would prefer to have my money in the bank to get me through, and have more time to sell the RV to recoup and no longer the payment.
I am incredibly responsible, and think out everything I do carefully before I make a major decision.
* This post was
edited 05/20/12 10:21pm by JayWalker2009 *
westernrvparkowner wrote: Debt is morally and ethically neutral, neither good, nor bad. Debt can destroy lives, but it can also allow people to do things that could never happen otherwise. The first park we bought cost $1.6 million dollars, a figure that would be unabtainable without financing, regardless of how good as savers we were. We were able to use our savings for the downpayment and borrow the remainder. Without financing, the rich would be the only people able to buy large assets, essentially eliminating the ability of all other people to ever climb the economic ladder.
Brent and Gina wrote: An opposing opinion easily validated by anyone wanting to conduct an internet search:
The average American has $20K in credit card debt. This doesn't include all other forms of debt such as housing, transportion, and "luxury."
The average American has much more debt than assets. We are NEGATIVE on average.
Most of us live in a "want it now" culture. It is not a wise thing to encourage any debt-related manipulation as we, as a whole, are stupid financially. As a whole, yes we are idiots.
It has been documented over and over, case after case by the individuals themselves, that financial responsibility, such as those taught by Dave Ramsey and others, lead to prosperous life choices, sound futures, financial responsibility, and overall happiness.
OP, I would recommend you consider your audience.
sorry......I was not speaking of your quote "yes, we are idiots"...or speaking in a general way regarding the entire population....I spoke in very specific terms about a specific retiree...nothing more or less..
I am surprised that you were not able to discern that..
I understood. I probably overreacted so I apologize. I see the title and some responses. I teach this stuff on a limited basis for those who want to hear it and every fiber of my being is screaming, "Noooooo, don't tell people this stuff." I'm sensitive to finances because of my poor background. My small bit of experience tells me folks might not understand your wealth and how you can play around. I'm afraid they'll simply hear "It's ok to go into debt." Personally, I'd like to hear more of how you've had a successful life, those steps and even more particularly, how you're earning 9%! I can't get close.
I like the fact that my hard earned investments are still there, and by financing I can have an RV at the same time. In time I'll have both, my money and an RV. What's wrong with that?
IMO,Financing an RV is different than running-up a credit card bill buying all your life supplies. At the end of the RV financing term, you have in your possession a valuable asset.
Another choice one could have, just stay home, get fat, and watch the 'Big Boys' head south in the winter with their fully paid-off RV's.
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