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Old 05-19-2019, 04:36 PM   #11
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There are a variety of financial circumstances where financing makes sense. Many, most do not make financial sense, some do.
Nobody said that borrowing money never made sense. What I said was:

I would NEVER purchase a luxury item for which I couldn't pay cash.. (emphasis added)
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Old 05-19-2019, 04:36 PM   #12
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Of course its silly. There is no good reason people shouldn't borrow for things that they will use in the future while they are making payments on the money they borrowed. Its called paying as you go. It may cost you more, but you get the use of the thing when you need/want it. Its becomes an investment when you are still using it long after the payments stop.

And, as you point out, paying cash can end up being more expensive. That is especially true for people with savings tied up in tax deferred retirement accounts. For the past decade it has been true for anyone who left that cash in the stock market.
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Old 05-19-2019, 04:46 PM   #13
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IMO, this is becoming silly.

Unless someone knows the op's financial circumstances, there can be no opinion about financing.

Yes, and it ok, to discuss financing rv's, boats, houses,...............

I've had 3 loans in my life, all made financial sense. About 45 years ago one minimum payment with a credit card, one house 39 years ago, one vehicle 6 years ago (not rv). If I buy a new Crossfit, I'll be looking for the lowest cost loan just like the op here. Why? Cash WILL cost more given my financial circumstances even though I can come up with the cash, that cast will cost more.

There are a variety of financial circumstances where financing makes sense. Many, most do not make financial sense, some do.

Of course all circumstances are different, and I spoke about us and our way of doing it. The OP may look at it differently and not be uncomfortable with financing and thinks it is worth to have the RV now. We financed the house (2 of them), also, as the rent/own balance justified it. If I needed a new car because I was putting on 50K a year to keep a good job, sure it makes sense if the option is no job. Especially for necessities like housing or transportation, you know that the costs are coming a long ways ahead, so planning is much easier.



Is buying an RV different? For us it would be totally not the same as a house or even necessary vehicle to survive and work. Basically a luxury so then the balance is really only monetary vs fun factor and everyone's idea of that will be different. Immediate gratification vs more later, just like we have all seen in the kids and marshmellow tests so many times. The goal for us is to have as many marshmellows as we want and need without missing out on anything important or that we want to do.



There certainly is a lot of middle ground between the person who dies with $2 million in the bank but never did anything he wanted to, and the one who brags about all the new stuff he got one week and few weeks later is complaining about all the payments or getting it repossessed. Moderation is the key for either end.
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Old 05-19-2019, 06:27 PM   #14
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Nobody said that borrowing money never made sense. What I said was:

I would NEVER purchase a luxury item for which I couldn't pay cash.. (emphasis added)
There are folks that do borrow for a 'luxury' item because they can make money with the borrowed money, more than it costs them after taxes and whatever expenses.

Again, nothing wrong with the discussion. But here is a quote from this discussion: "Donít finance it! RVíS depreciate like crazy. Save up and pay cash or buy used. Itíll make those drives down the road so much sweeter!" The point is you can't make that kind of categorical statement without knowing someone's financial circumstances."

avanti, you said a little more than above: "I've always believed that there are two kinds of people: cash people and credit people. The differences are (a) it takes cash people a few extra years to get to any given level of consumption; and (b) it costs 20% more to be a credit person (and so in the long run, you will be able to afford 20% less stuff). I would NEVER purchase a luxury item for which I couldn't pay cash."

The first part could be quite false for someone or not apply at all. The money borrowed enables the person to make more money than the cost of the loan. It does not have to be an RV, it could be anything used to borrow money, even someone's reputation.

Borrowing money should save or make more money. Buying, financing a new suit to interview for a job could be an example of making money. Continuing to finance new clothes usually does not make financial sense, but it could.
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Old 05-19-2019, 07:09 PM   #15
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There are folks that do borrow for a 'luxury' item because they can make money with the borrowed money, more than it costs them after taxes and whatever expenses.
...

Borrowing money should save or make more money. Buying, financing a new suit to interview for a job could be an example of making money. Continuing to finance new clothes usually does not make financial sense, but it could.
Although, I agree that there are times when borrowing money makes sense, IMO conflating the decision to buy an RV with the wholly-independent decision of whether your current financial situation calls for the use of borrowed money is dangerous in the extreme. We are all subject to bounded rationality and I am very skeptical that very many of us can properly separate the emotion involved in the Call of the Open Road with a completely independent, coldly-rational calculation about ROI vs interest rates.

If you think you should buy an RV, decide what you can afford and buy it.

If you think you should borrow money, look around at your potential collateral, and pick the best one for the purpose. If that turns out to be your RV, so be it. But color me skeptical that that will be the correct answer very often.

Combining the two will frequently lead to irrational decisions.

I am bored with this discussion. Over and out.
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Old 05-19-2019, 07:38 PM   #16
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Although, I agree that there are times when borrowing money makes sense, IMO conflating the decision to buy an RV with the wholly-independent decision of whether your current financial situation calls for the use of borrowed money is dangerous in the extreme. We are all subject to bounded rationality and I am very skeptical that very many of us can properly separate the emotion involved in the Call of the Open Road with a completely independent, coldly-rational calculation about ROI vs interest rates.

If you think you should buy an RV, decide what you can afford and buy it.

If you think you should borrow money, look around at your potential collateral, and pick the best one for the purpose. If that turns out to be your RV, so be it. But color me skeptical that that will be the correct answer very often.

Combining the two will frequently lead to irrational decisions.

I am bored with this discussion. Over and out.
Hey, even though you're bored, I'll mention that I agree with all of the above.
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