Comments on: Lesson From A Car Loan http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/ ... common and UNcommon viewpoints about money Thu, 19 Jan 2012 04:05:46 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Ed http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13268 Ed Thu, 06 Mar 2008 01:15:26 +0000 http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13268 Well done Francisco. With a income from a side business, you might even finish your home loan in less than 10 years. Well done Francisco. With a income from a side business, you might even finish your home loan in less than 10 years.

]]> By: Francisco (Bilingual Wedding DJ in Houston) Perez http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13267 Francisco (Bilingual Wedding DJ in Houston) Perez Wed, 05 Mar 2008 15:13:22 +0000 http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13267 Congratulations on your car loan being paid off!! I remember paying off our truck and car and feeling the same feeling of accomplishment. We paid off our cars a bit early and that felt even better. I am doing your first option, putting all that extra money into our home payment. I also started my own side business and it helps to have extra money to make it grow. We are expecting to pay our home loan in 10 years!!!!! Congratulations on your car loan being paid off!! I remember paying off our truck and car and feeling the same feeling of accomplishment. We paid off our cars a bit early and that felt even better. I am doing your first option, putting all that extra money into our home payment.

I also started my own side business and it helps to have extra money to make it grow.

We are expecting to pay our home loan in 10 years!!!!!

]]> By: Ed http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13264 Ed Tue, 04 Mar 2008 04:44:55 +0000 http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13264 Thanks AmyL for your thoughts. I'd definately take it into consideration. What I was thinking when I say "borrow to invest" is to invest in lower end house or apartments. Even if the economy takes a downturn, I'd probably still can rent it out, i.e. those who stay higher end property might need to move to lower end property when it happens. So I should be "safe". Like I said, its all theory for me. However, if we did LOSE our source of income altogether, than that would put us in a hole. Nope, I did't pay that much for interest in the car loan. Worked that out before I took the loan. I also got some tax deductions since the car is used partly for business. But I did lose out on the opportunity to invest because property prices when up a lot these last few years. Thanks AmyL for your thoughts. I’d definately take it into consideration. What I was thinking when I say “borrow to invest” is to invest in lower end house or apartments. Even if the economy takes a downturn, I’d probably still can rent it out, i.e. those who stay higher end property might need to move to lower end property when it happens. So I should be “safe”. Like I said, its all theory for me.

However, if we did LOSE our source of income altogether, than that would put us in a hole.

Nope, I did’t pay that much for interest in the car loan. Worked that out before I took the loan. I also got some tax deductions since the car is used partly for business. But I did lose out on the opportunity to invest because property prices when up a lot these last few years.

]]> By: AmyL http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13263 AmyL Mon, 03 Mar 2008 20:37:43 +0000 http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13263 :) I'm gonna side with Sherry on this one. I haven't read Total Money Makeover, but I did read the book prior to that (also by Dave Ramsey) and went through his debt reduction course. Hubby and I have been debt free for 3 years. The freedom is totally worth it. Sometimes there's a lot of pressure to go into debt just for a little while...just to make an investment...just to-whatever. But you never know what the future will hold. Yes, you could do a debt situation and have everything work out, but it's just as possible that something will go dramatically wrong and then you're stuck. In the state where I live, we had growth for years and years, and people with union jobs bought expensive houses that they ultimately couldn't afford when the economy took a downturn. We're now the worst economy in the US, and people are losing their houses in frightening numbers. It's sad, really. In the very small town where I live, there's a house for sale on almost every block. Larger towns are very hard hit as well. The people losing their homes took a gamble and lost big. To me, debt isn't worth the hassle or the risk. Figure out for a minute how much money you paid in interest over the life of your car loan. If it's anything like a US car loan, you paid half the value of the car again in interest, or perhaps even more. :) I’m gonna side with Sherry on this one. I haven’t read Total Money Makeover, but I did read the book prior to that (also by Dave Ramsey) and went through his debt reduction course. Hubby and I have been debt free for 3 years. The freedom is totally worth it. Sometimes there’s a lot of pressure to go into debt just for a little while…just to make an investment…just to-whatever. But you never know what the future will hold. Yes, you could do a debt situation and have everything work out, but it’s just as possible that something will go dramatically wrong and then you’re stuck.

In the state where I live, we had growth for years and years, and people with union jobs bought expensive houses that they ultimately couldn’t afford when the economy took a downturn. We’re now the worst economy in the US, and people are losing their houses in frightening numbers. It’s sad, really. In the very small town where I live, there’s a house for sale on almost every block. Larger towns are very hard hit as well. The people losing their homes took a gamble and lost big.

To me, debt isn’t worth the hassle or the risk. Figure out for a minute how much money you paid in interest over the life of your car loan. If it’s anything like a US car loan, you paid half the value of the car again in interest, or perhaps even more.

]]> By: Ed http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13262 Ed Mon, 03 Mar 2008 10:41:40 +0000 http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13262 Sherri - thanks for the suggestion. We do have an emergency fund. Good debt for investment might not be bad actually. Together with an exit strategy, it can leverage the money. Having said that, I've never had the experienced of being burnt so this is theory for me. Raymond - well there are stuff that "don't" increase in value but we still need to spend it, like a reliable, low cost and safe enough car for transportation. But off course reliable, low cost and safe is relative to each individual. Personally I don't think we should go on either extreme. Sherri – thanks for the suggestion. We do have an emergency fund. Good debt for investment might not be bad actually. Together with an exit strategy, it can leverage the money. Having said that, I’ve never had the experienced of being burnt so this is theory for me.

Raymond – well there are stuff that “don’t” increase in value but we still need to spend it, like a reliable, low cost and safe enough car for transportation. But off course reliable, low cost and safe is relative to each individual.

Personally I don’t think we should go on either extreme.

]]> By: Raymond Chua http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13261 Raymond Chua Mon, 03 Mar 2008 03:16:44 +0000 http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13261 Hi James, Thanks for sharing the great lessons. I always believe in spending my money for something which increase in its value. Hi James,

Thanks for sharing the great lessons. I always believe in spending my money for something which increase in its value.

]]> By: Debt Free or Bust - Sherri http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13260 Debt Free or Bust - Sherri Sat, 01 Mar 2008 19:55:32 +0000 http://www.personalmoneytips.com/blog/lesson-from-a-car-loan.htm/#comment-13260 Great post and I'm glad you learned some money lessons from this experience. I recommend taking that car payment and creating an emergency fund of 3-6 months of your monthly expenses. Put it into a good savings account that you can access easily without penalty. Do Not Invest this money. It isn't an investment. It's insurance against emergencies. Next, take some money and start saving cash for your next car, and don't ever borrow money again to buy a vehicle. If you have any other debts besides your house, pay them off as fast as you can and never borrow money again. The math may make sense, but not when you include the risk of having debt. After that, start saving 15% of each of your incomes for retirement. Then work on paying off your home mortgage. When your home is paid off, invest for wealth. I recommend the book "The Total Money Makeover" by Dave Ramsey. It will help you get on track from here and stay on track to a life of wealth and abundance. Best of luck in your money future. If you read my blog, you will know I'm doing all this the hard way. Sherri Great post and I’m glad you learned some money lessons from this experience.

I recommend taking that car payment and creating an emergency fund of 3-6 months of your monthly expenses. Put it into a good savings account that you can access easily without penalty. Do Not Invest this money. It isn’t an investment. It’s insurance against emergencies.

Next, take some money and start saving cash for your next car, and don’t ever borrow money again to buy a vehicle.

If you have any other debts besides your house, pay them off as fast as you can and never borrow money again. The math may make sense, but not when you include the risk of having debt.

After that, start saving 15% of each of your incomes for retirement.

Then work on paying off your home mortgage.

When your home is paid off, invest for wealth.

I recommend the book “The Total Money Makeover” by Dave Ramsey. It will help you get on track from here and stay on track to a life of wealth and abundance.

Best of luck in your money future. If you read my blog, you will know I’m doing all this the hard way.

Sherri

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