So who carries debt?
08-29-2007, 01:46 PM
#49
Mortgage, cc's paid off regularly, car, building lease and business.
Mortgage is not a bad thing. Highly recommend owning a home. It's forced savings and generally a solid and smart investment. (It's also known as borrowing a house from a bank) All the goofy loans getting the country in trouble right now never should have happened. 100% loans, interest only, uncontrolled ARM's, bad evil stuff. Recipe for disaster.
CC's get a lot of people in trouble. Undisciplined spending get's you in trouble quick. Gotta be paying these off regularly. If you can't you shouldn't be using them. Done right they are a pretty good tool. I built a house on them once. Way cheaper than a construction loan. Applied for every low interest card that came in the mail. Paid them off with the mortgage at the end and it cost me almost nothing.
Car loans are dispicable. Hate them. Bad deal all the way around. Never borrow money on something that depreciates. The main reason people own expensive cars, they can't afford without a loan, is ego. The vast majority of people could get by perfectly well with a 15 year old toyota corrolla. The vast majority of people wouldn't be caught dead in a 15 year old corrolla. I could have bought a Boxster but realized an old Miata would pretty much do the job for me. $3500 instead of $35000. Ego is the only reason cars haven't gotten more effecient in the last 20 years. Every year the new models are bigger and more powerful than the last.
Business loans/ lease. AAAARGH. Everyone makes money off my business but me.
Mortgage is not a bad thing. Highly recommend owning a home. It's forced savings and generally a solid and smart investment. (It's also known as borrowing a house from a bank) All the goofy loans getting the country in trouble right now never should have happened. 100% loans, interest only, uncontrolled ARM's, bad evil stuff. Recipe for disaster.
CC's get a lot of people in trouble. Undisciplined spending get's you in trouble quick. Gotta be paying these off regularly. If you can't you shouldn't be using them. Done right they are a pretty good tool. I built a house on them once. Way cheaper than a construction loan. Applied for every low interest card that came in the mail. Paid them off with the mortgage at the end and it cost me almost nothing.
Car loans are dispicable. Hate them. Bad deal all the way around. Never borrow money on something that depreciates. The main reason people own expensive cars, they can't afford without a loan, is ego. The vast majority of people could get by perfectly well with a 15 year old toyota corrolla. The vast majority of people wouldn't be caught dead in a 15 year old corrolla. I could have bought a Boxster but realized an old Miata would pretty much do the job for me. $3500 instead of $35000. Ego is the only reason cars haven't gotten more effecient in the last 20 years. Every year the new models are bigger and more powerful than the last.
Business loans/ lease. AAAARGH. Everyone makes money off my business but me.
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08-29-2007, 02:06 PM
#50
I guess there's one good thing about being old enough to father half of you guys. 
I'll keep a mortgage as long as I live. No reason to pay a house off at todays rates. Just sold my Forester and that's the only payment I had aside from credit card bills that get paid off every month.
I'm married though so I'll always owe at least half of what I make.
Frank
I'll keep a mortgage as long as I live. No reason to pay a house off at todays rates. Just sold my Forester and that's the only payment I had aside from credit card bills that get paid off every month.
I'm married though so I'll always owe at least half of what I make.
Frank
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08-29-2007, 02:15 PM
#53
My metallurgy teacher talked about that backpack in lecture yesterday. Saying that back in the day backpacks were just a convenient way to carry books costing no more than $50 tops. She was agast that backbacks are now hundreds of dollars and people seem to think they define "who they are."
Student loans have to suck. I actually wanted to get a stafford loan or whatever they are that have 0% interest till you graduate just so i could put it in a CD or something like that till i graduated and had to pay the money back. My fafsa wouldn't qualify me for one though.
Student loans have to suck. I actually wanted to get a stafford loan or whatever they are that have 0% interest till you graduate just so i could put it in a CD or something like that till i graduated and had to pay the money back. My fafsa wouldn't qualify me for one though.
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08-29-2007, 02:40 PM
#55
You probably are old enough to be my dad but still. these current rates will not last and this housing bubble is gonna burst didnt you notice wht happened just last month when something liek 1/4 of the subprime market laons got called and the dow and eveyrthing else had a rather large correction. Until the government bailed them out, wich is BS. There is 3/4 of the market comming due in about 5 months Im gonna wait and see what happens then, should be interesting. But yeah why ever own something outright, makes no sense, when you die your kids can pay it off. That money you are throwing at interest, and the mandatory cost of insurance each year is not costing you btu what 2-3K$ not that you wouldn't ensure your place if it was paid for but still. I get scared when i think of that much overhead even if it is something steady and safe. I like to be able to have full control on my stuff. and not have to deal with others to sell or modify it, in any way shape or form.
The trick when buying a house it to buy WELL with your means. Don't buy what the bank will finance you, but what you can easily afford. Because you are right, the interest rates will change over the life of your mortgage term. You need to be able to ride out the low points.
My plan is to keep upgrading my home until I get near retiring. Then sell it all off and buy smaller or rent. That an my pension will afford me a decent living.
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08-29-2007, 02:46 PM
#58
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Yeah rates change.... So what. Get a FIXED interest loan, then you don't have to worry about that.
Also, like everything else, the money is made in the buy, not in the sale. Buy smartly. New homes are typically better deals than used homes. But there are exceptions--like my house, I bought it before it was forclosed, got it for the mortgage payoff, $156k. Appraised at $205k. It was the least expensive house in the least expensive neighborhood in the area. A comp house to mine in my n'hood, but with a basement, just went for $260k. The surrounding n'hoods start at 500k, but most houses are 700k or so now, a few around 1M. I renovated the **** out of my house (flooring, granite counters, ss appliances, light fixtures, plumbing fixtures, master bath, and all sorts of ****). A friend of mine is a superintendant for a custom home builder, so we mostly used his contractors (and I got his prices) and he supervised for me. Haven't had it reappraised, but am expecting that the nearly $20k I put into the house did well for me.
Also, like everything else, the money is made in the buy, not in the sale. Buy smartly. New homes are typically better deals than used homes. But there are exceptions--like my house, I bought it before it was forclosed, got it for the mortgage payoff, $156k. Appraised at $205k. It was the least expensive house in the least expensive neighborhood in the area. A comp house to mine in my n'hood, but with a basement, just went for $260k. The surrounding n'hoods start at 500k, but most houses are 700k or so now, a few around 1M. I renovated the **** out of my house (flooring, granite counters, ss appliances, light fixtures, plumbing fixtures, master bath, and all sorts of ****). A friend of mine is a superintendant for a custom home builder, so we mostly used his contractors (and I got his prices) and he supervised for me. Haven't had it reappraised, but am expecting that the nearly $20k I put into the house did well for me.
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08-29-2007, 02:47 PM
#59
You probably are old enough to be my dad but still. these current rates will not last and this housing bubble is gonna burst didnt you notice wht happened just last month when something liek 1/4 of the subprime market laons got called and the dow and eveyrthing else had a rather large correction. Until the government bailed them out, wich is BS. There is 3/4 of the market comming due in about 5 months Im gonna wait and see what happens then, should be interesting. But yeah why ever own something outright, makes no sense, when you die your kids can pay it off. That money you are throwing at interest, and the mandatory cost of insurance each year is not costing you btu what 2-3K$ not that you wouldn't ensure your place if it was paid for but still. I get scared when i think of that much overhead even if it is something steady and safe. I like to be able to have full control on my stuff. and not have to deal with others to sell or modify it, in any way shape or form.
For you homeowners or potential homeowners out there. A good read:
http://www.ricedelman.com/planning/home/BLTmortgage.asp
Frank
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