Good Sam Club Open Roads Forum: General RVing Issues: Cash Vs. Finance
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Grit dog

Black Diamond, WA

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Posted: 01/05/20 01:51am Link  |  Quote  |  Print  |  Notify Moderator

js218 wrote:

Pay cash for everything, just put a deposit down on a new rig . Global Expedition Vehicle UVX-Max.


Good for you...you struck it rich in the stock market. Why the humble brag about it?


"Yes Sir, Oct 10 1888, Those poor school children froze to death in their tracks. They did not even find them until Spring. Especially hard hit were the ones who had to trek uphill to school both ways, with no shoes." -Bert A.

mich800

Pontiac, MI

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Posted: 01/05/20 03:42am Link  |  Quote  |  Print  |  Notify Moderator

Bobbo wrote:

Financing something instead of paying cash is no different that borrowing money to invest it. In a good economy, you can get away with it. If a recession hits, you can lose, big time. If you can't afford to pay cash, that is one thing. If you CAN afford to pay cash, you are betting your financial security on the economy staying strong.

I don't see anyone recommending taking out a loan and just investing that money.


Those two scenarios are not the same. Run the numbers again and you will realize your error.

Bobbo

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Posted: 01/05/20 07:01am Link  |  Quote  |  Print  |  Notify Moderator

mich800 wrote:

Bobbo wrote:

Financing something instead of paying cash is no different that borrowing money to invest it. In a good economy, you can get away with it. If a recession hits, you can lose, big time. If you can't afford to pay cash, that is one thing. If you CAN afford to pay cash, you are betting your financial security on the economy staying strong.

I don't see anyone recommending taking out a loan and just investing that money.


Those two scenarios are not the same. Run the numbers again and you will realize your error.

Both are owing someone money, paying interest on it, while you have money enough to pay it off, invested earning interest. Or "income" if you decide to quibble about the term "interest." How are they not the same? You are just betting that the interest you are earning is more than the interest you are paying. In a good economy, you can easily win. In a recession, you can easily lose.


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wing_zealot

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Posted: 01/05/20 07:09am Link  |  Quote  |  Print  |  Notify Moderator

Bobbo wrote:

Financing something instead of paying cash is no different that borrowing money to invest it. In a good economy, you can get away with it. If a recession hits, you can lose, big time. If you can't afford to pay cash, that is one thing. If you CAN afford to pay cash, you are betting your financial security on the economy staying strong.

I don't see anyone recommending taking out a loan and just investing that money.
The difference is "collateral". You should look up the meaning of that word. It makes a big difference, especially to the guy lending you the money. The point is, just because you "can" pay cash, doesn't mean you "should". Remember, I still have that money, I can pay off the loan anytime I want, and keep the money I already made.

But I do want to give you a big Thank-You. It's people like you that make it easy for me to borrow money so cheaply. So, THANKS, keep up the good work!

* This post was edited 01/05/20 07:31am by wing_zealot *

mich800

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Posted: 01/05/20 07:43am Link  |  Quote  |  Print  |  Notify Moderator

Bobbo wrote:

mich800 wrote:

Bobbo wrote:

Financing something instead of paying cash is no different that borrowing money to invest it. In a good economy, you can get away with it. If a recession hits, you can lose, big time. If you can't afford to pay cash, that is one thing. If you CAN afford to pay cash, you are betting your financial security on the economy staying strong.

I don't see anyone recommending taking out a loan and just investing that money.


Those two scenarios are not the same. Run the numbers again and you will realize your error.

Both are owing someone money, paying interest on it, while you have money enough to pay it off, invested earning interest. Or "income" if you decide to quibble about the term "interest." How are they not the same? You are just betting that the interest you are earning is more than the interest you are paying. In a good economy, you can easily win. In a recession, you can easily lose.


No, in one you can sell the rv and payoff the loan and still have your investments. The other you have nothing at the end of the transaction. No one is suggesting taking out a big loan to invest. Just that there is an opportunity cost to liquidating your investments when relatively cheap money can be use for the purchase of another asset. (and keep your investments)

Your scenario is very risk adverse. Nothing wrong with that. Risk of principle is very low. But so are your returns (hopefully staying ahead of inflation). Which is not always the case with that strategy.

js218

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Posted: 01/05/20 10:05am Link  |  Quote  |  Print  |  Notify Moderator

Grit Dog been paying cash long before I hit it in the stock market, thats how I was able to invest in the stocks market.


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time2roll

Southern California

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Posted: 01/05/20 10:54am Link  |  Quote  |  Print  |  Notify Moderator

OK and if I use all my liquid cash to buy a trailer and six months later my home needs a new roof or air conditioner.... a cash out financing on the trailer or rolling it onto the VISA is not quite as favorable. Again in this case I would finance the trailer at purchase to get best rate and terms. As long as nothing else needs the money pay it off in 2 to 5 years.


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Grit dog

Black Diamond, WA

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Posted: 01/05/20 11:25am Link  |  Quote  |  Print  |  Notify Moderator

js218 wrote:

Grit Dog been paying cash long before I hit it in the stock market, thats how I was able to invest in the stocks market.


I don't disagree with that philosophy in the least. Save for a mortgage, we typically don't finance anything else. 1. Becasue we've been hard working/smart/fortunate enough to be able to do that and 2. Because I'm not totally interested in playing the pay 4% on this and make 8% on that game. It works but it's work..lol.

goducks10

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Posted: 01/05/20 02:14pm Link  |  Quote  |  Print  |  Notify Moderator

Could you imagine the selection of RV's if everyone paid cash only?
My RV would be a 5x10 utility trailer with the best tent I could find.

time2roll

Southern California

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Posted: 01/05/20 02:41pm Link  |  Quote  |  Print  |  Notify Moderator

Grit dog wrote:

js218 wrote:

Grit Dog been paying cash long before I hit it in the stock market, thats how I was able to invest in the stocks market.
I don't disagree with that philosophy in the least. Save for a mortgage, we typically don't finance anything else. 1. Becasue we've been hard working/smart/fortunate enough to be able to do that and 2. Because I'm not totally interested in playing the pay 4% on this and make 8% on that game. It works but it's work..lol.
When I bought my RV trailer I had just paid cash for my house. Dang I was out of money and had to finance the trailer. Armageddon was upon me.

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