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GOONx19's avatar

GOONx19

An exceptional poster.

7,147 posts
Jun 27, 2017 10:01 PM
My only debt is from student loans and I've never missed a payment. I think I'm around 750 because my accounts are young and I've opened 2 credit cards in the last three years. I don't picture it ever going down from here.
Jun 27, 2017 10:01pm
Laley23's avatar

Laley23

GOAT

29,506 posts
Jun 27, 2017 10:17 PM
GOONx19;1860536 wrote:My only debt is from student loans and I've never missed a payment. I think I'm around 750 because my accounts are young and I've opened 2 credit cards in the last three years. I don't picture it ever going down from here.
No car payment?
Jun 27, 2017 10:17pm
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gut

Senior Member

15,058 posts
Jun 28, 2017 12:15 AM
Laley23;1860539 wrote:No car payment?
Actually surprising his number is that high (without a car payment). Usually you need more credit history than just a couple of cards ("recently" opened, at that) to get a good credit score.
Jun 28, 2017 12:15am
GOONx19's avatar

GOONx19

An exceptional poster.

7,147 posts
Jun 28, 2017 6:23 AM
Laley23;1860539 wrote:No car payment?
Forgot about that, do have one.
Jun 28, 2017 6:23am
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Con_Alma

Senior Member

12,198 posts
Jun 28, 2017 11:06 AM
Laley23;1860539 wrote:No car payment?
Car payments suck. I haven't had one since my wife's when we got married. We fund a car savings account each month and when we get to the point of needing a new one we pull from it. I hate having debt on a depreciating asset like that.
Jun 28, 2017 11:06am
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QuakerOats

Senior Member

8,740 posts
Jun 28, 2017 11:16 AM
ernest_t_bass;1860525 wrote:400. Thinking about buying a boat.
LOL
Jun 28, 2017 11:16am
Q

QuakerOats

Senior Member

8,740 posts
Jun 28, 2017 11:17 AM
iclfan2;1860498 wrote:^^maybe our brilliant education system should add this to a finance class that should be mandatory for all juniors/ seniors in high school.

Amen to that. Why is Home Economics class about sewing and cooking.......not finance and budgeting?
Jun 28, 2017 11:17am
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gut

Senior Member

15,058 posts
Jun 28, 2017 11:19 AM
Con_Alma;1860577 wrote:I hate having debt on a depreciating asset like that.
Depends on the APR....when the manufacturers get desperate, they'll offer 0%. Even at 4.5%, I hope to be able to make at least that after tax in the market, plus you can "double-purpose" the funds having it as a reserve savings vs. dumping it all into a car purchase.

If you want to build credit, you can take out a car loan and then [making sure there are no penalties] pay it off after 12 months.
Jun 28, 2017 11:19am
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gut

Senior Member

15,058 posts
Jun 28, 2017 11:20 AM
QuakerOats;1860581 wrote:Amen to that. Why is Home Economics class about sewing and cooking.......not finance and budgeting?
Maybe because most people will live paycheck to paycheck, even if they know better....and doing your own sewing and cooking saves more money than working with a $0 budget.
Jun 28, 2017 11:20am
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Con_Alma

Senior Member

12,198 posts
Jun 28, 2017 11:21 AM
I get the free money game. 0% on anything is nice....but so is not having a mortgage or car payment.
Jun 28, 2017 11:21am
iclfan2's avatar

iclfan2

Reppin' the 330/216/843

6,360 posts
Jun 28, 2017 11:29 AM
gut;1860585 wrote:Maybe because most people will live paycheck to paycheck, even if they know better....and doing your own sewing and cooking saves more money than working with a $0 budget.
Budgeting would explain to them how to not live paycheck to paycheck, or how compounding interest works, or how to not get in stupid amount of school debt, etc.


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Jun 28, 2017 11:29am
iclfan2's avatar

iclfan2

Reppin' the 330/216/843

6,360 posts
Jun 28, 2017 11:31 AM
Con_Alma;1860586 wrote:I get the free money game. 0% on anything is nice....but so is not having a mortgage or car payment.
I have plenty of cash to pay down my mortgage more or pay cash for a car, but I make more money in the market than the interest on these so why would I? I do get the train of thought though and just not wanting to have debt.


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Jun 28, 2017 11:31am
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Con_Alma

Senior Member

12,198 posts
Jun 28, 2017 11:37 AM
iclfan2;1860593 wrote:I have plenty of cash to pay down my mortgage more or pay cash for a car, but I make more money in the market than the interest on these so why would I? I do get the train of thought though and just not wanting to have debt.


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I don't know that you would want to nor that you should. My post wasn't necessarily a* recommendation for others.
Jun 28, 2017 11:37am
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gut

Senior Member

15,058 posts
Jun 28, 2017 11:37 AM
iclfan2;1860592 wrote:Budgeting would explain to them how to not live paycheck to paycheck, or how compounding interest works, or how to not get in stupid amount of school debt, etc.
Maybe. But most people live paycheck-to-paycheck because they insist on living beyond their means and simply don't have the discipline to save. That's why debt/payment plans are so enticing because people actually do budget monthly.

It's simply a reckless financial decision to use credit they can't really afford because it's just their opportunity cost of getting something now. They'd rather figure out how to get an extra $150 to finance and enjoy their tv now, then save up for it for a year or two.
Jun 28, 2017 11:37am
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Con_Alma

Senior Member

12,198 posts
Jun 28, 2017 11:40 AM
gut;1860597 wrote:Maybe. But most people live paycheck-to-paycheck because they insist on living beyond their means and simply don't have the discipline to save. That's why debt/payment plans are so enticing because people actually do budget monthly.

It's simply a reckless financial decision to use credit they can't really afford because it's just their opportunity cost of getting something now. They'd rather figure out how to get an extra $150 to finance and enjoy their tv now, then save up for it for a year or two.
Those same people likely don't know what "opportunity cost" is either.
Jun 28, 2017 11:40am
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gut

Senior Member

15,058 posts
Jun 28, 2017 11:53 AM
iclfan2;1860593 wrote:I have plenty of cash to pay down my mortgage more or pay cash for a car, but I make more money in the market than the interest on these so why would I? I do get the train of thought though and just not wanting to have debt.
I think about this a lot.

It's easy to say "I make more on that money in the market than my mortgage interest cost" when in a bull market. But consider the risk you're actually taking - recession hits, markets donk off 40% of your savings AND now you've lost your job....meaning you have to finance your life and home out of savings that's just been decimated by a bear market. But the historically low interest rates today definitely make that a smarter bet.

The flip side of all this is a conservative/safety savings fund gets crap in a money market or CD. And it would be very painful to have to drawdown your portfolio to live after it got whacked in the market. But long-term that just might be a fact of life.
Jun 28, 2017 11:53am
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gut

Senior Member

15,058 posts
Jun 28, 2017 12:06 PM
Con_Alma;1860598 wrote:Those same people likely don't know what "opportunity cost" is either.
They wouldn't care if they did. Rather than save 5 years for that tv, they'll pay an extra 20% to have it now.
Jun 28, 2017 12:06pm
iclfan2's avatar

iclfan2

Reppin' the 330/216/843

6,360 posts
Jun 28, 2017 12:16 PM
gut;1860597 wrote:Maybe. But most people live paycheck-to-paycheck because they insist on living beyond their means and simply don't have the discipline to save. That's why debt/payment plans are so enticing because people actually do budget monthly.

It's simply a reckless financial decision to use credit they can't really afford because it's just their opportunity cost of getting something now. They'd rather figure out how to get an extra $150 to finance and enjoy their tv now, then save up for it for a year or two.
Agreed. But I still think it should be taught in school to everyone so at least they have the basis of why you shouldn't be making these decisions. I'd argue it is more important than an extra music/language/gym/health semester. When I was in HS (not THAT long ago) finance wasn't even an option. But global studies, sociology/psychology/drama survey and other useless classes were. If HS is supposed to get kids ready for the real world, then finance shouldn't even be an elective but a requirement. A lot of these kids don't know anything other than what their parents do, which keeps them in the same shity cylce of not saving, living beyond one's means, and working until they're 70 (or sucking off the gov't teet). I get it that a lot of people would still be dumb with finances, but I don't think there is any plausible argument against having a finance class in high school.
gut;1860600 wrote:I think about this a lot.

It's easy to say "I make more on that money in the market than my mortgage interest cost" when in a bull market. But consider the risk you're actually taking - recession hits, markets donk off 40% of your savings AND now you've lost your job....meaning you have to finance your life and home out of savings that's just been decimated by a bear market. But the historically low interest rates today definitely make that a smarter bet.

The flip side of all this is a conservative/safety savings fund gets crap in a money market or CD. And it would be very painful to have to drawdown your portfolio to live after it got whacked in the market. But long-term that just might be a fact of life.
I also think about this a lot. B/c if the market does go down, I'm not going to take my already undervalued portfolio to pay off the debt. The real issue for me is say the market is terrible, I'm not touching what is in the market, but do I stop putting more in to pay off debt at a higher interest rate, OR take advantage of the low market to put more cash into it. I have a financial advisor but it still makes you think. Most of my money in the market isn't THAT risky, and a good portfolio should have funds that do well in a stagnant market, but like anything it is always a risk. As for jobs, that or a serious illness would definitely be a problem, but our industries should be sustainable for the most part.
Jun 28, 2017 12:16pm
ernest_t_bass's avatar

ernest_t_bass

12th Son of the Lama

24,984 posts
Jun 28, 2017 12:53 PM
Anyone want to buy a boat? Like new.
Jun 28, 2017 12:53pm
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gut

Senior Member

15,058 posts
Jun 28, 2017 1:01 PM
iclfan2;1860604 wrote:The real issue for me is say the market is terrible, I'm not touching what is in the market, but do I stop putting more in to pay off debt at a higher interest rate, OR take advantage of the low market to put more cash into it.
Ehh, I think it's more complex than that. The average bear market lasts 15 months and donks off 32%. By the time you realize we're in a bear market, it's probably time to start buying low rather than selling or sitting on cash.

The more interesting and relevant question is, after a historically long bull market, is it more financially savvy to take the guaranteed 3-4% return paying down mortgage debt with your additional savings right now? Even if the market runs 25% over the next 2+ years, and then drops 20% - you have exactly what you started with [and I think those numbers may be conservative].

The cool thing you could do is if you have an ARM that is up in, say, 3 years....you could get 3% paying down principle, and then when the bear market hits you take the cash back out in your refi to put to work in a bull market. I'm really just talking risk management here not advocating you pump 50% of your net worth into paying down your mortgage.

Of course, I'm the same guy who was worried about market valuations and recessions last year (still am), and markets have gone up over 15% since then.
Jun 28, 2017 1:01pm
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isadore

Senior Member

7,762 posts
Jun 28, 2017 1:58 PM
822
Jun 28, 2017 1:58pm
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gut

Senior Member

15,058 posts
Jun 28, 2017 1:59 PM
isadore;1860626 wrote:822
Credit score, not SAT score.
Jun 28, 2017 1:59pm
I

isadore

Senior Member

7,762 posts
Jun 28, 2017 2:10 PM
gut;1860628 wrote:Credit score, not SAT score.
gosh a ruddies that would be 2120
Jun 28, 2017 2:10pm
Laley23's avatar

Laley23

GOAT

29,506 posts
Jun 28, 2017 2:14 PM
Con_Alma;1860577 wrote:Car payments suck. I haven't had one since my wife's when we got married. We fund a car savings account each month and when we get to the point of needing a new one we pull from it. I hate having debt on a depreciating asset like that.
Yes they do. Thankfully, mine will be paid off and I'll likely have under 25k miles on it. It's a 2014 Ford Focus, I was able to put a decent amount down, but my job requires very little driving (mostly flying lol). So when it's paid off, it "SHOULD" be able to go for awhile before I need a new one.
Jun 28, 2017 2:14pm
S

Sonofanump

Jun 28, 2017 2:32 PM
ernest_t_bass;1860613 wrote:Anyone want to buy a boat? Like new.
No. I am looking into buying some horses and rental property in the middle of nowhere.
Jun 28, 2017 2:32pm