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ferndaleflyer
everywhere
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Joined: 03/31/2011
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I haven’t financed anything since my first home. I paid that off in 1966—that’s right, 1966.
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OkieGene
oklahoma city
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Joined: 01/06/2004
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It's not just RV loan rates.
The "cost" of money has shot up.
IIRC the Fed was below 1% but is now up to about 4% or so. I'm probably not accurate on those exact numbers but what is correct is the basic underlying rate has jump up a huge amount, percentage wise.
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jimh406
Western MT
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Joined: 06/11/2006
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I think it depends on your level of investment expertise. I make a lot more money on the money invested vs what I lose financing. I can make more money in the stock market over time than even rates back to the 90s. I'll also take the tax deduction. YMMV.
On the other hand, I avoid buying new vehicles which is the opposite of some of you who pay cash. After years of trading in pretty good vehicles/boats/RVs, etc, I came to realize that other people probably are too. So, I buy used and let them take the depreciation.
It does take some research, but there is nothing to guarantee that a new vehicle/RV will stay together past the warranty. Also, if you've been listening/reading, you'll know that most RV/vehicle problems are usually discovered in the first year or two. If you feel lucky, go for it. I will go used from now on. You guys can take the depreciation and hope for luck that you bought a good one ... pay off your houses.
Do what you are comfortable with ...
'10 Ford F-450, 6.4, 4.30, 4x4, 14,500 GVWR, '06 Host Rainer 950 DS, Torklift Talon tiedowns, Glow Steps, and Fastguns. Bilstein 4600s, Firestone Bags, Toyo M655 Gs, Curt front hitch, Energy Suspension bump stops.
NRA Life Member, CCA Life Member
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3 tons
NV.
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Joined: 03/13/2009
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The correct answer varies per individual, retirement window and one’s age - each strategy will be somewhat situational and different…Fortunately, my ‘cobbled together’ strategies (over a time…) ended up working out, and I’ve been enjoying emancipation now for 10 years…However, post trowing in the towel, humility is a component - this is why I’m often reminded that “I’m a success in spite of my reckless self”!!
3 tons
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valhalla360
No paticular place.
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Joined: 08/19/2009
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Operating on leverage works great until it doesn't...then it multiplies the losses. The ones talking about being savey, always gloss over this part and it would never happen to them...until it does.
The trick is to get ahead of the game. Once you have no loan payments, it's easy to save up for big ticket items.
Tammy & Mike
Ford F250 V10
2021 Gray Wolf
Gemini Catamaran 34'
Full Time spliting time between boat and RV
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Grit dog
Black Diamond, WA
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Joined: 05/06/2013
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3 tons wrote:The correct answer varies per individual, retirement window and one’s age - each strategy will be somewhat situational and different…Fortunately, my ‘cobbled together’ strategies (over a time…) ended up working out, and I’ve been enjoying emancipation now for 10 years…However, post trowing in the towel, humility is a component - this is why I’m often reminded that “I’m a success in spite of my reckless self”!!
3 tons
Thumbs up!
2016 Ram 2500, MotorOps.ca EFIlive tuned, 5” turbo back, 6" lift on 37s
2017 Heartland Torque T29 - Sold.
Couple of Arctic Fox TCs - Sold
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JimK-NY
NY
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Joined: 05/12/2010
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valhalla360 wrote:Operating on leverage works great until it doesn't...then it multiplies the losses. The ones talking about being savey, always gloss over this part and it would never happen to them...until it does.
The trick is to get ahead of the game. Once you have no loan payments, it's easy to save up for big ticket items.
You are certainly correct. It is possible to lose money when investing leveraged money. At the current borrowing rates and current investment returns that is highly likely.
Sadly very few people have any financial knowledge. I find it appalling that our schools do not teach anything regarding household finances. It is no surprise since the teachers are not educated in that regard. When I took out car loans and a mortgage, the rates were low and historical analysis predicted my 60:40 conservative portfolio would double my money with less than a 2% risk of falling short. Note that is falling short, not losing anything but a very small fraction of what I borrowed. That type of information is readily available with free online calculators.
Years ago I even bought a $40K truck totally with credit cards. It took a couple of cards and calls to up my borrowing limits. We paid our daughter's $30K tuition with credit cards. We paid off the cards immediately and had points for trips to Hawaii and to visit relatives on the other side of the country. As someone else pointed out, even taking a high cost RV loan can make sense it you get substantial incentives and there is no pre-payment penalty.
This is probably the wrong place to discuss financial matters including financing an RV, but if you blindly avoid all debt and pay off debts as soon as possible, it might be a good idea to gain some financial knowledge.
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nickthehunter
Midwest
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Joined: 07/18/2005
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valhalla360 wrote:Operating on leverage works great until it doesn't...then it multiplies the losses. The ones talking about being savey, always gloss over this part and it would never happen to them...until it does.
The trick is to get ahead of the game. Once you have no loan payments, it's easy to save up for big ticket items. Even when the market goes down, I still have the money to pay it off; and still get to keep the difference on what I already made.
I have a 15 year RV loan at just over 4% that I've had for about 8 years. I'm way ahead of the game at this time. Today, I can pay it off any day I want, and still keep a pretty nice sum of money.
What it boils down to is: What works for you, doesn't necessarily work for everyone else. There is not only one right answer.
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HawkTX
TEXAS
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Joined: 09/18/2005
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I've never financed an RV, but maybe some of these people that are financing their RV's might have it in their mind that they can write the interest off if they claim it on their taxes. With that said, it raises a new topic of how much of the interest they can truly write-off and if cost justifies financing it in the first place?
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nickthehunter
Midwest
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To answer the question, I can write off 100% of the interest on a second home. However, that doesn't put me over the top for exceeding the standard deduction. So financing to write off the interest gains does absolutely nothing for me. That overall is probably a bad strategy. At most, if you paid $1,000 in interest in a year, it would net save you $370 in taxes (37% or less depending on Taxable Income).
But keeping my money invested and using other peoples money while only paying them 4.49% in interest is a winner. The money I kept invested is right now worth almost 70% more over the last 8 years, and that is even after it went down over 36% last year.
Now to head off the naysayers, the money is invested in a Roth IRA, total market index fund (VTSMX). I've had the fund for about 20 years, nothing fancy, moderate to above average risk. If I was going to pay cash for the RV, this is the fund the money would have come out of.
* This post was
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