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Old 01-09-2011, 09:17 PM   #43
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Nightwatch, you said it very well!

I had a Chinese student whose grandma said: The 65-year-old American man relaxed in his chair and said, "Ah. I have finally paid off my house." In China, the 65-year-old Chinese man relaxed in his chair and said, "Ah. I have finally saved enough to buy a house."

If you are responsible with your money and debt load, interest rates are low. As others have already stated, try to get your term as short as you can comfortably manage. Make extra payments when possible. Then you can sit by the fire and say, "Ah. The flames really make a beautiful pattern on that Airstream."


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2002 Chinook Destiny | 1973 13' Boler (fiberglass egg) "The Boiler"
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Old 01-12-2011, 07:53 AM   #44
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Thanks Nightwatch for your post. My rational is the same as yours. I'm 38 years old and wanted to enjoy an Airstream now rather than wait until i'm older and may be unable to do the things I can physically do now. Life is Good, but short, and I intend on enjoying mine within reason. Like you, I have a more than adequate income, and although I could have paid cash, I'm not going to tie up most of my "working" capital. I have a very low interest loan and a 10 year loan that is almost paid off.

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Old 01-12-2011, 03:17 PM   #45
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Originally Posted by bolerama View Post
Nightwatch, you said it very well!

I had a Chinese student whose grandma said: The 65-year-old American man relaxed in his chair and said, "Ah. I have finally paid off my house." In China, the 65-year-old Chinese man relaxed in his chair and said, "Ah. I have finally saved enough to buy a house."

For many years, Chinese man puts money in bank.

Chinese bank loans this money to US bank.

US bank makes sub-prime mortgage loan to American man with Chinese man's money.

Americn man defaults on loan.

65-year-old Chinese man THOUHGT he had finally saved enough to buy a house.

Problem resolved: Give house in US to 65-year-old Chinese man. Avert foreclosure!


p.s. My background was in corporate finance, which included being on the board of a multi-billion dollar credit company.

I see nothing wrong with credit worthy people borrowing money. I've borrowed money my entire life, and now 10 years into an early retirement, I continue to borrow money. Why not? I'm presently earning several times more on my investments than what I'm paying in interest.

I appreciate that many people take out 10 year loans to buy RVs. That may be ok if there is a substantial downpayment (loan equity). But it is too long and too risky in many cases as far as I'm concerned. (Where are all of those Chinese RVers when we really need them?)
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Old 05-26-2011, 09:06 AM   #46
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Those Chinese RV buyers are buying RVs made in California currently.

MVP RV featured on CNBC - - Business

Riverside-based MVP RV, which moved into Fleetwood's old factory after they secured more than $300 million in funding from a Chinese battery inventor, was featured on CNBC recently. The segment highlights the company's plans to export RVs to China, both Class Cs that look like trailers sitting in the bed of a truck and Class As that more closely resemble a tour bus.
I ran into CEO Brad Williams at Riverside County's foreign trade event Tuesday evening who said that his company is building the vehicles (that are a little shorter both in height and length for customers in China) while it secures certification to ship and sell them there. They have about 210 employees and plan to add another 30 to its payroll soon.
US Company MVP Exporting RVs to China | RV News, Videos & Reviews @ RV Buddies
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Old 08-16-2011, 04:25 PM   #47
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I wait til I have cash I will be dead. I want to build memories with my children. I have one of those rare pension jobs so my retirement will secure. My income and job are stable. I have full disability income insurance, if I were to become disabled. I do not have large cash and even if I did I would leave it alone alone for emergency. I'm going for memories, low affordable payment and building memories with my children. PS ,I'm thinking it'll b paid off bout time I retire. How sweet is that. I really don't know-how folks have ginormous amounts of cash these days.
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Old 08-16-2011, 05:24 PM   #48
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I am self employed so my income fluxuates from month to when we buy on time we finance for as long a period as we can at the lowest possible interest rate that will give us a monthly payment we know we can always make... then we religiously make double payments (or more) when we are able ... and always pay it off far before the term of the loan. We have never owed money on any car (or RV) for longer than two years. We hate paying interest on anything. PS: Remember that interest paid on a trailer or RV is tax deductible because it is considered a second home (as long as it's self-contained, which AStreams are.
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Old 08-16-2011, 06:52 PM   #49
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Looks like you have covered a number of bases however now you must determine how much you can afford for monthly payments and how long you want to make them. As stated above you can always double down and pay off early. Don't forget to include storage, insurance and other operational costs. Interest rates are still low at least on new AS. Not sure on used however ever I would suspect they are higher
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Old 08-16-2011, 07:50 PM   #50
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Let them try and get it

There’s the old saying:

It’s not the man who dies, but the man who dies with the most toys is who wins!

A friend of mine took it one step further:

It’s not the man who dies with the most toys, but the man who dies with the most toys “that are not paid for” who truly wins!
Paul Waddell
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Old 08-17-2011, 07:55 AM   #51
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Just refinanced and it's much more than a toy!

Originally Posted by urnmor View Post
Looks like you have covered a number of bases however now you must determine how much you can afford for monthly payments and how long you want to make them. As stated above you can always double down and pay off early. Don't forget to include storage, insurance and other operational costs. Interest rates are still low at least on new AS. Not sure on used however ever I would suspect they are higher
I'm preparing for the worst as I expect to be a downsizing victim effective
September 30. I'm home right now burning my vacation that I will lose if I don't take the time off...(four weeks of it) and I have already applied for a couple of jobs in my industry but they will be 100 or more miles away from home. There is no way I would sign a lease in another town or city when I have a stocked and furnished home I can pull behind me. No, I don't necessarily want to leave my comfortable home, my dad, my wife, the four legged children but I have to keep working if at all possible. We just refinanced the Airstream and dropped the rate 1.7 through our credit union and that means our payment went up $38 a month but will be paid off in eight years or earlier (at retirement age) so we knocked off five years of the original note. Also paid off the tow vehicle. If I am correct in what I feel is coming with the loss of my current job, then the toy becomes a very important piece of property.
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Old 08-17-2011, 01:14 PM   #52
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Wow. Surprised at the answers on this thread.

I am a CPA by background and have worked in Finance/Accounting for 30+years. There is an old addage at play that most people who want to pay for their trailer in cash are missing, called: OPM - Other People's Money.

Rarely, does it pay, from a cash flow/net value perspective, to pay for an asset out of your own pocket.

It doesn't matter what value you use for the price, $20,000 or $40,000, or $60,000 or whatever. I used in my analysis $40,000. That you had on hand to buy a trailer.

You have two options, borrow money to get your AS or pay in cash. 1) you pay in cash you just reduced the value of your investments. And I assumed you take the money that you would have paid for the monthly loan payments and invested that - to replenish your portfolio. 2) you leave that $40K in your portfolio let it increase in value, and make monthly payments.

In option 1) your monthly investment will grow slowly, but build up steam over time as you keep adding that monthly amount. However, in option 2) the full value of that $40K earns from day one. In the vast majority of cases you will have more money in your pocket using option 2. The only way option 1) yields a better return is if the markets stay low to flat for many years. However, if the markets return to historical levels in anywhere less than 4 years from now option 2 is still ahead. This was all calculated on a 10 year payment. On a 20 year payment the difference is huge.

Just so you know, when I did my analysis I calculated tax impacts too.

That is for those with the cash who insist on paying for their trailer in cash. Most of America usually doesn't have that much disposable cash available so they would borrow the money anyway. I was just addressing those who were advising to always pay cash. It doesn't make as much "cents" as you think. It actually costs you more "cents" in the long run.

just my 2 cents!
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Old 08-17-2011, 01:31 PM   #53
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Sounds great, But:

Is it your opinion that you can earn more money on an investment than you will pay out in loan interest/fees for a loan used to buy a trailer? I am talking about the current world, not a potential future world.
“Courage is being scared to death, but saddling up anyway.”
...John Wayne...........................
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Old 08-17-2011, 02:14 PM   #54
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I'm a cpa/cfp and rarely do I find one solution/answer that fits everyone.

For me personally, unless it's an appreciating asset, I wait until I can pay cash.
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Old 08-17-2011, 04:04 PM   #55
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I have a friend who is shopping for a new car. He is early 60's, modest tract house isn't paid for, still works, has a very modest retirement savings account (less than 100K), and doesn't own any investments. He's going to take out a home equity loan to buy the car (about 20k).

I asked him why he didn't just buy a car he could afford? He said, "I wouldn't want to drive a car I could afford". Hahahaha!! There it is:-) Hard to argue with that kind of reasoning:-)

I was trained in business to never borrow money to buy a depreciating asset. I did when I was younger. Since I was about 35 I started paying cash for everything personal. I did borrow to build a couple commercial buildings in the 80's. I paid those off in short order. I borrowed to buy a rental house in 2004. I paid that off last year.

Not servicing debt has given me tremendous advantage the last 30 years, not to mention the elimination of risk. My strategy has been to live below my means, accumulate cash and buy income producing real estate. I still drive my '87 Chevy pickup I paid cash for new in '87:-)
Click on the link to see a picture of the Sioux River falls near my home.
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Old 09-14-2011, 08:06 AM   #56
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I am newbie here. I am 62 year young, I do not know anything about RV. We decide that we would like to give it a try. Looking at used AS just one a sport safari 20 ft 2008, the owner wants 25K for it , I said I am worried about the body damage which cause a gigantic dent on the driver side, I said I do not feel comfortable with that, he immediately lower the price to 22K. I still walked away. Now, I do like 2012 20 ft flying cloud, but the dealer wants 54K solid, I read somewhere in this forum that I should pay 80% MSRP, so I told them 40K then. They all look at me like I am a three eyes martian or something. Anyway, there is no way that I could get it for that price. A week later still no luck. Now, I might still going to do it anyway. I have >50K in my bank earning decimal interest, I left it there just in case if I could not go to work. I am a physician so is my wife. I have my money mostly in CD and bank note, paying anywhere from 8 % to 15 % federally insured for the principal. I have income from my investment more than I am making from my work. I also have more than 100K of shiny gold sitting in my vault as well as SPDR GLD and SLV stock. Just curious the guy run my credit and his eyes were popping out when the credit score return 840. I have no mortgage on our home which I am paying county tax based on 800K value, the kids are gone , I have 2 kid 1 owe me 50K and another owe me 30K interest free for their home down payment, one just sold her home and hopefully will return me the 50K soon, I hope. Now, back to the RV, the dealer said the bank could do 5% for 180 m , of the 40k balance, payment would be $300 a month, interest should be tax deductible, of course there is no pre payment penalty. If I stick with the term it will cost me 80K to do this deal. My mind got stuck at $300 a month, shoot, that's pocket change. I might do it. So I will not have to touch my investment or parted with my shiny asset, and I still have 50K sitting in the bank doing nothing but just for emergency. What do you all financial guru think of my situation?

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