GSI

T.O. Drives a beetle convertible.

poohlikeshunny

you're shittin me...i can see it, yet i can't....

That's kinda funny if he does though...

On another note, how reliable are XK8's? I heard they got better with age, but not sure about reliability. I've seen some used ones for more than fair prices (not sure if that is a sign to be worried or not...)

spdy0001

Hey Pooh are you having a BustedJack moment?

If your such a baller and have twenty five years worth of dedicated mortgage payments sitting in the bank why not pay them on your house now and save the hundreds of thousands of dollars you will end up paying in interest over the next 25 years

poohlikeshunny

lol...i wish i had a bustedjack moment...my e-strip club would be doing much better with my e-ferrari sittin out front...lol...but the money we have saved and/or invested is years of my asian cheapness coming to fruition...we have enough to pay off 25 years of mortgage payments, but it also = our savings. So if I blow through that, we have no savings and there would be no way I could afford anything nice at all. Some of the chinks here may agree...i like to make sure that if anything happens where we NEED to pay off our mortgage (company fails or bankrupt...etc.) we can feasibly do most of it and survive. But otherwise we live with what we have and just keep score.

iTimmy

Typical mortgage interest rates are still pretty cheap and if you don't enjoy life there is no point living it. The last thing you want to do is be sitting on your death bed thinking of all the things you wished you had done.

if it was bustedjack he would be talking about trading in his leer on a gulfstream because his wife got new implants and he wants a more spacious plane.

spdy0001

Yes interest rates may be fairly low, but still higher than what you would normally be making in the bank.

Figuring a normal 30 year mortgage he is claiming he has almost enough to pay off the house. In a normal mortgage you end up paying 2-3 times what the house is worth by the time its paid off.

Maybe its just me being cheap but I wouldn't want to blow like 300K in interest payments if I didn't have too. Pooh is only 25 and has plenty of time to "live life" with a house that would be paid for. Just the money he would save in interest would pay for his Lambo

iTimmy

Nonsense, if he did that he would be buying the car when he was 55 and the interest would not be enough to cover a lambo then. While I have nothing against the older guy driving a sports car, your not going to enjoy it in your 50's like you would in your 20's.

The OP is 25, married with a kid and mortgage, his days are numbered and he should be enjoying life as much as possible.

spdy0001

poohlikeshunny

lol...now THAT's keepin it real...thanx for the vote of confidence. I agree, I don't think my back will be able to handle a sports car the same way when I am in my 50's. Sounds like you guys are more of the mortgage experts here...maybe you could shed some light on helpin me save some cash... I trust our broker...but only so much ya know...i wish we were multi-millionaires...unfortunately I think those days are still a few years away...

spdy...also owning a business makes you think about other expenses as well. If anything happened to the company legal or otherwise, I'm pretty sure what we have now is still not enough to bail our company out...we are only in our 3rd year of business, so we are still real young. Anything could happen. If business goes south, I'd like to know I have a large comfy sum to take care of my wife and kids until I could get another business going. But if you have some advice for saving money on a house, I'm all ears. We just bought it not too long ago and kinda jumped in since it was a foreclosure (ie we saved a shitload buying the crappiest house in a nice neighborhood), so I'm not sure if I have many other options or not. lol...if you have advice that can help me buy a lambo in the future I'm all ears!

btw...wifey officially nixed the idea of an NSX... too wild for her taste...looks like you still may get an NSX before me yummy chan...

iamandypark

where has boostedjack been?

pooh, whatever you get im coming over to christen your car haha

phile

TheMirror

e-gear I believe.

Fibonacci

Check your numbers. A conforming 30 yr fixed can be had for around 6.50% right now - so assuming a 35% fed/state nominal -- after tax cost of funds is 4.25ish, well below the after tax rate of return one could assume to make by investing in the stock market over a 30yr period.

30 yr mortgagee will pay roughly double the original cost of the home in combined principle and interest over the life of the loan. Time value of money and inflation works into the borrowers favor however.

That being said, I do much prefer the 15yr fixed though...

teranfon

I think this is a rather broad statement. I'm in my fourties and enjoy cars more now than I did when I was younger. It can be argued that my enthusiasm for particular cars hasn't increased from when I was younger, but the ability to truly enjoy them has. Any car, for the most part, is a depreciating luxury item. Personally, I have found a number of collectors can devote more time to driving, maintaining, and enjoying their cars because the commitments of earlier years have diminished, whether this being economic, family, or career in nature. As you get older you find that you are also uninhibited from previous influences that may make decide to purchase a particular automobile.

Terry

poohlikeshunny

very well spoken! I guess that's one thing I never put too much thought into. I can only imagine once my kids are away at school and we've had more time...seems so far away it feels like it's not even an option...lol...

dallison

pay the house off early and you will save like 100k -150k or so.

enough for a 911

juniorbean

iTrader: (5)

Although I'd say that I kind of agree with Tireguy and teranfon as well.... so I'd say don't pay off the whole mortgage, just refinance to a 15-year mortgage. Saves a bunch of interest but still keeps some money lying around for him to buy the luxury items he wants.

As for the original question... that's easy. I never do anything for anyone else. I never give a crap what anyone else will ever think or say. I do (or buy) things for me b/c I want them. I'm not out to impress or please anyone. I could care less about everyone else. So if I want something, I buy it. If not, then I don't.

So do what you want to do (and what makes most sense financially)...

iTimmy

Great advice!

poohlikeshunny

indeed...looking into refi for a 15 year sounds like a good idea...not lookin to own a house and have practically nothing to my name...lol...

Costco

If you thought this would make me think more highly of the Beetle, think again! I'm a 49ers fan. The best part is that T.O. called Jeff Garcia a homo! I just woke up and you already made my day. + reps

I used to think that the Beetle convertible was the ultimate chick car. Now I simply think its a turd with pieces of corn in it. Plus what's he doing driving a Beetle convertible? Cheap ass.

poohlikeshunny

I'm still wrapping my head around the mental image...lol..I STILL think it's the ultimate chick car...and the CLK cabrio is the ultimate rich chick car...

teranfon

Poohlikehunny,

Have you ever considered paying the house off now, using the equity of your home for a credit line, and purchasing a car that way? You say you bought your current home as a foreclosure, and that it requires some work. Any sweat equity you put into your home will undoubtedly increase its value. Pay off the house, save the interest charges, add value to you home, and then appraise its worth. Establish a credit line against its value. If your credit is good and you have a substantial net worth, prime certainly wouldn't be out of the question.

It sounds as if you are unsure what car you want, but if you buy something a year or two old where a good chunk of the depreciation has occurred, you can enjoy it for a moderate amount of cost and resell it and move onto something else. And the great thing that besides a small amount of depreciation, you have only paid the interest of the money used from your credit line to purchase the car. The important thing is your home is paid for, increasing you net worth.

Terry

spdy0001

^^^^^^^^^^
Yes a home is something that appreciates, while almost every vehicle will depreciate. Yeah the vehicle may be more fun, but invest wisely

Yumcha

Very good words of advice IMO. But, again...that's the Chink in me talking. The Western mentality is more alike to spend now, save later.

poohlikeshunny

wow...awesome advice...u may have to walk me through some of this though...like I said, I'm still pretty new to the whole home ownership thing, so forgive me if I need to be schooled in the basics a little more... We have a lot of equity built in since we bought it so cheap, but we are trying not to use that because our original plans are to finish with this house, then sell out and out the equity that we would get out of the sale into the new home...our credit is excellent so does that mean we have other options we should look into?

btw, we would definitely be giong with a used vehicle...i've only ever bought used so why stop the streak now...lol..

yummy...you damn asian!!! wait...there's one inside me too...

Yumcha

^ I dunno...I did sleep through a chunk of my finance classes in Business School...but, I always was under the impression that debt is...debt.

If you have a bunch of $$$$ that can net you a very nice "toy"...the rule of thumb I always had in me was to use that $$$$ instead to pay off the debt. And I'm not sure where you are in your morgage, PLH...but, seeing your age, you're likely very early INTO it and guess what? A gigantic chunk of all your payments are towards interest to the bank...not towards your principle owing.

So...like I said, the Chink in me says: pay off your debt. And if you REALLY must have a nice car, spend SOME of the $$$$ and buy something affordable (i.e. used NSX) instead of putting your eggs in one basket for a high-end new car that in the end...depreciates to virtually nothing.




...or, buy lotsa robots.

teranfon

Oriental here too boys.

Equity, investments, and cash flow. Nothing should jeopardize these principles.

Terry

poohlikeshunny

we're early in our mortgage..but isn't there a way for you to pay nothing but interest first and then principle later? Right now the only debt I have is the house. I finished my student loans and am paying my own way to go back for an MBA and religiously do not use credit cards unless I need to.

since the wife already nixed the NSX idea...I'm thinkin maybe i score some brownie points by getting her a prius (her wish, not mine) and then finding myself something else not so high end...lol..maybe that'll give me the leverage to get what I want next time we have this chat...

As for the robots...ummm...how about i just look at pics of your collection and leave it at that... with my kid around I'd be too afraid to have any nice toys boxed away for anything...sooner or later he'll be old enough to find it and probably rip it apart...just like daddy...

Terry, rock on! We've got quite an asian e-posse now...lol...so the best way to take advantage of my equity would be to get a line of credit through equity? wouldn't that put me at a disadvantage with a second "mortgage" we have to pay every month? Or do you mean after we pay it down?

Yumcha

Um...that's exactly what you're trying to avoid. The whole formula of morgage payments is that banks set it up so that you're paying nothing but interest to them for the first several years. I'm referring to the payments that you owe regularly each month to the bank.

So, guess what? Your principle--which is your debt is still sitting right there literally untouched and close to the full amount. Therefore, the BONUS for anyone to eating away at debt is to pay extra payments (banks refer to this as "double-up" payments) which go completely into the principle. This is what I was alluding to for you to do with your extra saved $$$ instead of putting it all into a monster-sports car.

Yumcha

^ And PS: I'm kidding about the robots.

I budget pretty carefully since I'm a single guy (GF does not live with me or contribute overall), so...I always make sure there is enough for the necessities, payments, savings, investments...and the leftover is play-money (aka robot/nice clothing/eating out-money).

poohlikeshunny

i sees...well looks like a refi is in order anyway from what most people tell me...lol...fortunately or unfortunately...I think another g35c is in my future...

you were kidding about the robots?? PUH-lease...lol..I wish I were still budegting for just myself...it's so much easier...live it up while you can yummy-chan...before little yummettes start prancing around your bachelor pad...

Yumcha

There you go. AZ has saved yet another citizen from debt and for future prosperity.











Well, I was kidding to YOU about buying robots. I'm not stopping my illness...ever. I have probably every intention of one day setting the WR for the largest and $$$$ robot collection in Canada...okay, North America even.

poohlikeshunny

lol...yeah...gotta love the AZ...we even get news here before MSN.com...car news before the big magazines get em...gotta love it! and I never called it an illness...maybe more like a feverish addiction...lol...but if you ever hit the WR books, you know I'm taking the new car (whatever the hell we end up getting) and driving up to your bachelor pad personally to salute you!!!

teranfon

I'm not exactly sure what you're asking, but yes, pay for the home completely and use the equity you would have in it. Within reason. Buying an expensive car to put in a garage that you currently have mortgaged isn't really a wise thing to do. If you got your home for a good price and perform the necessary upgrades and any additions you so choose, the value of your home will most likely increase. Well over and above the initial purchase price. And best of all you aren't paying any carrying charges as you don't have a mortgage. Cash flow basically remains unchanged, but your net worth has increased dramatically. Banks generally look at net worth and debt serving to establish parameters on any future money borrowed. You will be ahead because of your assets and income. I'm not really sure what you are referring to as a "second mortgage", but its still very important not to use your credit line for frivolous purchases. Again, remember most luxury goods are DEPRECIATING items. Your credit can also be used for business purchases, and the applicable interest can be expensed against future taxes.

Now let's say you find a car you want, it's still very important not to go over your head. And for the most part it's not advisable to hold on to it unless it's something you truly want for years to come. Buy something pre-owned because someone else had paid the depreciation. Lets say its a pre-owned Boxster. Pay for it from the credit line, enjoy it, drive it, make it your hobby, and then sell it when you tire of it. Lets assume you drive the car for two years and something else catches your eye. What has it really cost you? A small amount of depreciation and the interest charges accumulated monthly. At the end of the day, not a huge amount in relation to the enjoyment you received. Now if you go out and buy a new Aston and expect to have it for an extended period of time, this approach will not work for you. You will eventually need to pay the principle. And of course, the principle owning for the car will not match the value of it once its depreciated.

For the last few years I've attended and participated in the Barrett-Jackson Scottsdale event. You would be absolutely amazed at the same cars that return from year to year. People buy them, enjoy them, sell them, and move onto something else. Do it wisely and your net worth remains the same, cash flow isn't jeopardized, investment schedules and opportunities are still realized, and you still enjoy your automotive hobby. Again, be reasonable and astute.

Terry

iamandypark

poohlikeshunny, just thought i shoud let you know, lower providence car show this friday at the lower providence firehouse.

poohlikeshunny

wow...lots of good stuff here...I wish i had an older asian mentor to teach me these things...my dad is a big fan of "do it yourself" to the nth degree...so once i went to college I was literally on my own 110% in regards to the second mortgage, I thought that was what you referred to when suggesting using the equity as a line of credit...I guess I am wrong?

iamandypark...where at??? I am very interested!!!

Shadzilla

When LaVar Arrington first signed with the Redskins, he bought one of these standard cookie cutter townhouses that are littered all over the Northern Virginia area. They are nice, but nothing special. Anyways, you could see his house from a main roadway, and he would always, ALWAYS, leave his Ferrari 360 Modena Spider sitting in the driveway. Rain or shine. Those cars had just come out, and those townhouses were worth about $300,000. So his car was worth about half of the value of his house. But that didn't stop him from buying it. So I say, if LaVar can do it, so can you

teranfon

A credit line is not a second mortgage. The bank will most likely use your home as security against the credit line however. Paid off house and other assets=the higher the credit line. Another type of credit line is unsecured. No assets placed as security. As you grow older and prove to the bank you have an excellent payment history and income, you can eventually move into an unsecured CL. My experience of course are with Canadian institutions, but would imagine US banks to be similar. The important thing with A CL is to use it wisely. Yes, you are only charged the interest of the amount used and not required to pay the principle, but eventually you will have to pay for the item you purchase if you intend to keep it. Think of it as a credit card with a very attractive interest rate. Moderation, maturity, and responsibility are most important.

Terry

Yumcha

And on a slightly related note, this is why I guess I have a bit of a negative stigma with people who spend a heap of $$$$ on a nice car...but, have no property and still live at home with their parents.

Just doesn't make any sense to me...Debt is never good. But, there is good debt and bad debt. Car debt is money towards something that is losing money every day. House debt is money towards something that will GAIN money every day (well, for the most part...you don't wanna buy a house on top of a nuclear waste dump. )...

iamandypark

The car show is across the street from the K-mart and Genaurdi's on ridge pike. If you are coming from 422w towards giant you go straight on trooper road until you hit the intersection with the Burger King. Make a left when you see the Burger king and go straight on Ridge Pike for about 2 miles you will see a firehouse on your right.

http://www.lowerprovidence.org/documents/CarShow.pdf