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Old 08-25-2018, 05:43 PM   #1
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Default Did you pay cash for your Class B?

Yeah... it's an age old question......

Did you set a limit on what you wanted to pay cash for?

Here's the thing.... my Sprinter would have cost me $57,000 more in interest over a 20 years loan.... that's 72 percent more than the purchase price.....

I decided it was a better option to pay myself back the $600 per month payment I would have sent the finance company....

Everyone's situation is different....and I noticed that a lot of people on the forum are retired, so, how did this figure into your calculations.....

Thankfully, my Sprinter is paid for and the money saved is helping on any repairs and maintenance aside from being set aside for a rainy day....

When you have a steeply depreciating asset like an RV.... EVERY little bit helps to save money.... I could only imagine paying almost double for something that is losing money every year that passes and every mile driven......

I'm NOT as concerned about mileage.... due to the fact that it's a diesel, but a lot of people get hung up on "high mileage" vehicles....

In the meantime... I'm just going to enjoy the thing while I've got it and not worry about the deprecation... until I want to sell..... resale is only IMPORTANT when you sell...

I understand that a lot of people also finance...cost of money ..and investments elsewhere...I understand.. I have rental property investmets.....the RV is a toy..

Point is...you can't take it with you...so, enjoy while you can..
YES... having a brand new rig or car is exciting..... doesn't last too long...then it's just another depreciating asset......

That's why I purchased a FIVE year old 2012 in 2017....

Choices?? They're complicated.... I thought that it was a good compromise between the safety of pretty new vehicle and a late model.... my Sprinter only had 26,000 miles when I purchased it.... pretty new... not BRAND NEW.......

Your comments and experience???
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Old 08-25-2018, 06:59 PM   #2
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You borrow many to make money or save money. Otherwise don't borrow money that costs more than you can make or save.

Examples: Someone needs to interview for a job, but has no money for a new suit Well simple, borrow the money so you make the money with job. Might be better for most folks to not borrow money to buy clothes after landing the job. But maybe not:

If I had Warren Buffett's talent, I would borrow every dime I could. I would have a 20+ year rv loan with no down payment if possible.

A person does not want to own a home, rather rent. During a lot of the last 60 years, The person might buy the home because there was just too much money being saved to pass up.

Bud
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Old 08-25-2018, 07:36 PM   #3
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Default Financial sense??

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You borrow many to make money or save money. Otherwise don't borrow money that costs more than you can make or save.

Examples: Someone needs to interview for a job, but has no money for a new suit Well simple, borrow the money so you make the money with job. Might be better for most folks to not borrow money to buy clothes after landing the job. But maybe not:

If I had Warren Buffett's talent, I would borrow every dime I could. I would have a 20+ year rv loan with no down payment if possible.

A person does not want to own a home, rather rent. During a lot of the last 60 years, The person might buy the home because there was just too much money being saved to pass up.

Bud
Bud,

What part of paying almost twice for your vehicle don't you understand?
You think spending an extra $57,000 is a good idea.??

I disagree.

Your argument makes no sense...my opinion....... sorry...
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Old 08-25-2018, 07:51 PM   #4
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Bud,

What part of paying almost twice for your vehicle don't you understand?
You think spending an extra $57,000 is a good idea.??

I disagree.

Your argument makes no sense...my opinion....... sorry...
You wrote, "Your comments and experience???"

That quote was in a paragraph by itself. I did not comment on your rv purchase as I don't know anything about your financial circumstances. What I wrote will hopefully make sense now.

Bud
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Old 08-25-2018, 08:12 PM   #5
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Default Choices.... yes...I rather save the money......

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You wrote, "Your comments and experience???"

That quote was in a paragraph by itself. I did not comment on your rv purchase as I don't know anything about your financial circumstances. What I wrote will hopefully make sense now.

Bud
Let me repeat this for you......


I decided it was a better option to pay myself back the $600 per month payment I would have sent the finance company..

By the way.... I didn't borrow the money to pay for the RV...
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Old 08-25-2018, 08:56 PM   #6
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In Cash - See my signature.
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I have a 1989 Dodge XPLORER RV Class B - Purchased 10/15/10 IN CASH
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We've got the best of both worlds
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Old 08-25-2018, 09:22 PM   #7
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In Cash - See my signature.
I understand.... you didn't pay close to 100k....
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Old 08-25-2018, 09:47 PM   #8
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Opportunity Cost should factor in when deciding to pay cash or finance.

Example: You have $100,000 invested in dividend paying stocks earning 5% annually = $5,000 per year coming in. Additionally you are realizing 3% growth annually on that portfolio. The Opportunity Cost of spending that money might cost you $8,000 per year.

If you can finance at 7% then you'd be better off financing and keeping your invested and growing portfolio.

That financing might be in the form of a mortgage which I think is tax deductible in the US.

There's risk when investing though. Worst case scenario would be that your portfolio value plummets and you're still stuck with the financing expense.
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Old 08-25-2018, 11:15 PM   #9
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What markopolo said. The only time I took out a loan for anything other than a mortgage it was to buy a car for my daughter. I could have paid cash for it but Honda was offering a loan at an interest rate less than what I was making in the bank. He is right, though, in the sense that interest rates could have fallen to change that relationship. Lucky they didn't. But is your real question "why not buy a used RV where the steep depreciation has already occurred to the point where you can pay for it in cash?" Markopolo's example assumes that someone actually does have the money that they could spend; but many don't. In other words, avoid loan interest costs by not taking out a loan to begin with.
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Old 08-25-2018, 11:24 PM   #10
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Cash (plus trade in of our Airstream trailer and 2500HD diesel.) - otherwise would not have bought it!

Never liked loans and only ever had them as mortgages and paid them off as quickly as I could afford - long ago!

We have a new 2019 on order - on the one hand I know how much I will lose just driving it off the lot, but I have owned precious few vehicles over my life that I bought brand new and so I felt the heck with it - I'm doing it! Likely will be the last major expenditure - and still a decent amount left for the kids anyway!

What do they say? "If you don't spend it your kids surely will," and to this point we have been pretty frugal all those years!

Brian.
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Old 08-26-2018, 12:08 AM   #11
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Part of the reason for buying a 1999. That, and we're cheap.
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Old 08-26-2018, 01:03 AM   #12
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I am simply Old School. I never discuss my personal finances with anyone and certainly not with strangers. The old French derived word "gauche" comes to mind. To each his own. The fact that I have operated in fiduciary capacities for fifty years probably explains my reluctance.
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Old 08-26-2018, 01:21 AM   #13
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What do they say? "If you don't spend it your kids surely will," and to this point we have been pretty frugal all those years!

Brian.
I like your thinking, Brian.

I love my kids, and we will leave them something when we're gone due to hard work and frugal living. Yet, I don't want them waiting around for Mom & Dad's money. I would rather they work and save for their own future.

That being said, I have told them if their Mother & I knew the day and time of our deaths (I'm glad we won't by the way), that we would spend everything except to leave just enough in the bank to pay funeral expenses.

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Old 08-26-2018, 01:28 AM   #14
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I like your thinking, Brian.

I love my kids, and we will leave them something when we're gone due to hard work and frugal living. Yet, I don't want them waiting around for Mom & Dad's money. I would rather they work and save for their own future.

That being said, I have told them if their Mother & I knew the day and time of our deaths (I'm glad we won't by the way), that we would spend everything except to leave just enough in the bank to pay funeral expenses.

.
An interesting book: 'Die Broke'

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Old 08-26-2018, 02:26 AM   #15
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We seem to have done things differently than most in buying the RV. We did it the way that we paid for cars over the years also, most bought new and driven until dead, or near dead.


We made payments to ourselves BEFORE buying the vehicles, staying at least one vehicle ahead, so the money was earning interest the whole time, and ready when we needed it. 5 years before we felt we would be getting some type of traveling equipment (RV, trailer, luxury car and hotel, etc) we just started putting extra into the vehicle account every month. By the time we bought our new, but on the lot 15 months, 07 Roadtrek C190P for $58K, the money was there ready to go when the very good price came by.
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Old 08-26-2018, 02:55 AM   #16
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What markopolo said. The only time I took out a loan for anything other than a mortgage it was to buy a car for my daughter. I could have paid cash for it but Honda was offering a loan at an interest rate less than what I was making in the bank. He is right, though, in the sense that interest rates could have fallen to change that relationship. Lucky they didn't. But is your real question "why not buy a used RV where the steep depreciation has already occurred to the point where you can pay for it in cash?" Markopolo's example assumes that someone actually does have the money that they could spend; but many don't. In other words, avoid loan interest costs by not taking out a loan to begin with.

Our RS Adventurous wasn't particularly inexpensive..... with all of the necessary stuff like tires, batteries etc and what I did..it adds up quickly.....
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Old 08-26-2018, 03:06 AM   #17
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We seem to have done things differently than most in buying the RV. We did it the way that we paid for cars over the years also, most bought new and driven until dead, or near dead.

We made payments to ourselves BEFORE buying the vehicles, staying at least one vehicle ahead, so the money was earning interest the whole time, and ready when we needed it. 5 years before we felt we would be getting some type of traveling equipment (RV, trailer, luxury car and hotel, etc) we just started putting extra into the vehicle account every month. By the time we bought our new, but on the lot 15 months, 07 Roadtrek C190P for $58K, the money was there ready to go when the very good price came by.
Booster... I understand.... let's see... maybe in 10 years I will have paid back all the money to myself for what I laid out to acquire the vehicle??? Less maintenance and repairs.....

These Roadtrek vehicles really hold their value well....I hope I'm as lucky as you are....mine is a 2012.....

How many miles are on the 2007??

Do you put a lot of miles on it each year or is it not linear??? We put a lot of miles on the the first year... I don't expect that to be the case this year..... that 11,000 miles USA tour was unusual....

Was this your model??? Says it sold for $74,000 .... maybe you got a fantastic deal???

https://www.nadaguides.com/RVs/2007/...3046760/Values

You got this brand new???

My 2012 RS Adventurous had 26,000 miles on it when I purchased it...
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Old 08-26-2018, 03:09 AM   #18
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Default Five percent per year??? Very ambitious...

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Opportunity Cost should factor in when deciding to pay cash or finance.

Example: You have $100,000 invested in dividend paying stocks earning 5% annually = $5,000 per year coming in. Additionally you are realizing 3% growth annually on that portfolio. The Opportunity Cost of spending that money might cost you $8,000 per year.

If you can finance at 7% then you'd be better off financing and keeping your invested and growing portfolio.

That financing might be in the form of a mortgage which I think is tax deductible in the US.

There's risk when investing though. Worst case scenario would be that your portfolio value plummets and you're still stuck with the financing expense.
That is a bit optimistic..??

Real Estate would be a better idea.....
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Old 08-26-2018, 03:11 AM   #19
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Default There another name for this .... Skiing.....

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An interesting book: 'Die Broke'

Bud
Spending Kids Inheritance.....that presumes you have kids.....
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Old 08-26-2018, 03:44 AM   #20
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Booster... I understand.... let's see... maybe in 10 years I will have paid back all the money to myself for what I laid out to acquire the vehicle??? Less maintenance and repairs.....

These Roadtrek vehicles really hold their value well....I hope I'm as lucky as you are....mine is a 2012.....

How many miles are on the 2007??

Do you put a lot of miles on it each year or is it not linear??? We put a lot of miles on the the first year... I don't expect that to be the case this year..... that 11,000 miles USA tour was unusual....

Was this your model??? Says it sold for $74,000 .... maybe you got a fantastic deal???

https://www.nadaguides.com/RVs/2007/...3046760/Values

You got this brand new???

My 2012 RS Adventurous had 26,000 miles on it when I purchased it...

Yes, brand new, model year old 2007 C190P with a sticker of $77K+ with options. It had been on the lot a while (bought in fall 200 and Roadtrek was dumping the dealer, so $58K with only delivery miles on it We had allotted nearly that much for finding a nice used one, so there was no question on getting the new one.



We are mid 40K miles now, as the early years we were still working, and "stuff" just seems to come up every time we try to get out. Our 2 month, 7500 mile, planned spring trip got cut short to 1 month and 6K miles because we had to get home due to a friends serious illness.
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