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Old 09-16-2011, 07:00 PM   #81
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Originally Posted by Getaways View Post
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!
Okay, I just wanted to weigh in on this issue. I am 50 and we just bought our first AS (Argosy) used and paid cash. What you left out in your explanation above is this: Say you really want to purchase a new AS and it will cost $40K and the only way to get it is to finance. So, what if...instead of purchasing new, you spend $6-8K cash for a used AS and then save for the new AS by putting away the amount that would be your monthly payments for the new AS until you have the cash for the new one? First, you can enjoy the used AS and get used to dealing with the issues you will have regardless of the age of the AS and you are saving for the new one and earning interest on the money you are saving so that in, say 5 years, you have the cash to purchase a new AS (even if the price goes up, you've earned additional money from interest on what you've saved) AND you haven't overpayed for the AS because of interest payments!!

Purchase a new AS for $40K at 2.5% interest for 5 years = $709.89/ month or $42,593.40.

Save $709.89/month for 5 years at 2.5% interest compounded annually and you have $48,190.52 to pay cash for a new AS. I do not believe that the mortgage interest tax write off is equal to $5597.12 difference.

Am I missing something? I know that you have to account for the $5-8K investment in the used AS, but you can sell it (or trade it in) and get at least 50% of that back and you had the use of it while you were saving for the new AS.
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Old 09-16-2011, 08:35 PM   #82
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Just surprises me that everyone seems to assume that everyone is in the same personal, family and financial situation as they are in so thus what is best for themselves must be best for everyone else.

At 32 years old I'm sure I am far from the typical Airstream owner. And to think that what is the smartest decision for a retired couple in their sixties is right for me and my situation is nonsense.

I've spent quite a bit of time breaking down my decision and by far financing makes the most financial sense for the long term for me and my family. How can someone criticize me for that without knowing anything about my situation?
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Old 09-16-2011, 11:49 PM   #83
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Let's put this another way. Back in 1993, I had 3 small children, a mortgage, a car payment, but really wanted to show my kids the country...and no way I could afford to do it in hotels. Plus, I'm a camper...it's a lifestyle!
I borrowed against my 401K..I KNOW WHAT THE LONG TERM COSTS OF THAT WERE AND ARE! I'm not stupid.

BUT, I showed my kids, over the years, 47 states, every historically significant place hither and yon, and spent a lot of quality time around a campfire and on trails.
Sometimes they loved it, sometimes they didn't.

As they progressed through high school, and history class and geography class subjects and they could say "been there, done that", I felt satisfied.

Now that they are adults, and really have experienced different American (a little Canadian) cultural subtleties, and truly have experienced diversity (not the kind the media and Govt. wants you to accept).......it's priceless, regardless of the cost.
Everybody is different in their needs and wants. How you get it done is irrelevant, IMHO.
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Old 09-17-2011, 06:01 AM   #84
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i think after foliowing this discussion the important thing is to do these activities while you have the health to do them.cash or credit only boils down to whether you can afford thr lifestyle in the first place.i dont have alot of time on my hands ,but when i can get away the airstream is in the driveway ready to go.for what i paid and the use i get it wasnt a decision based on frugality.my decision was based on a long term plan and the enjoyment of the lifestyle.bought new since i dont have time for a fixer upper,financed 90 percent of purchase and paid it off over 55 months.above all my time is the most valuable thing and when i have it i want to use it wisely.even when i get home from work after a long day i enjoy seeing the airstream in the driveway or sitting in it on early mornings with a cup of coffee.i waited till i was 45 to buy my first a/s and 9 years later i have alot of family memories that are priceless.cash or credit doesnt matter as long as you are not strapping yourself so that you cant use the coach.i have cash to pay for what i usually want ,but i like using opm to keep my options open.plus at least in my case debt keeps me motivated to get up and out everyday,and the dw thinking we have tons of disposable income that she can shop with.
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Old 09-17-2011, 07:27 AM   #85
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dznf0g (post#83), has the right perspective on this, if you ask me....
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Old 09-17-2011, 10:25 AM   #86
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I agree the family travel is a wonderful experience. We did it in a used VW camper, bought without financing.

doug k
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Old 09-17-2011, 10:55 AM   #87
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To me, the most important thing is to get out and have fun while you can. Wait, wait, wait wait....for what, cancer, heart attack the world economy collapsing into a depression? That said, don't be stupid about it, buy what you can afford and still sleep at night. Many "inexpensive" trailers AS or SOB will give you lots of fun. We purchased a '99 Safari in 2010. Paid 15k and it was in pretty much perfect shape except for a small area of wood rot in the rear trunk, THANKS AIRSTREAM...(that's another topic). PO had installed new cork floors and did a beautiful job. I put on new tires (need due to age) and new alum wheels (not need, couldn't stand the ugly factory steel wheels). Put in a new water pump, the old one was fine, but too noisy for me. Got rid of the factory charger, again I didn't have to, but I wanted a nice 3 stage IOTA. Anyway, I would venture to guess that we have had as much fun in that trailer as we would have spending 50-60k a a new one, that would be worth maybe, what? 40K or so now. I could sell mine today for more because I added solar panels and I know I could recover that cost and likely the cost of my other upgrades. My point is, if you have to crunch numbers to death to justify a purchase, then you likely shouldn't buy it. Instead there are lots of nice used, useable Airstreams out there. Or if you want something new, plenty of nice SOBS....yep lots of nice SOBS. We purchased out 23' Jayco Kiwi hybrid new in '04 for $11,600 from a dealer via ebay (List $18k+). Perfect transaction BTW. We used it a lot for 6 years and sold it last year for 6k, 1k a year depreciation. We had tons of fun in that trailer and are having tons of fun it our AS. If we wanted new, I likely would have purchased a nice new Jayco for under 20k and had the same fun that anyone is having with their AS, except I wouldn't have that whole cool factor.....which I like having too. However I restate: BUY WHAT YOU CAN AFFORD, if you have to juggle too many numbers and ask too much advice and finance for 10 or 15 years (and need that term to pay it off), you likely should think twice about whatever it is that you want. Heck you can have fun in a pop up if need be! Just get out there while you can!
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Old 09-17-2011, 11:18 AM   #88
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Well said
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Old 09-17-2011, 11:51 AM   #89
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As a CFP I often tell my clients to spend money on things that provide either education or experiences.

An airstream thats regularly used sure fits that description.
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Old 09-17-2011, 11:54 AM   #90
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That's the same advise my proctologist gives to his patients.
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Old 09-19-2011, 06:42 AM   #91
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A lot has been written on how to finance our toys. What works for one may not be the best fit for someone else However I would just say don't fall in the category of " I wish, I could a, should a" I also know that life can turn on a dime and then it may become to late to do it.
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Old 09-19-2011, 07:39 AM   #92
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Bike Addict, dznf0g and Others

You folks hit the nail on the head. As Nike says just do it. Cash or credit, new or used, size does not matter, just go for it and start building memories with your family.

I love to camp- I prefer the Stream but can also camp in a tent if the situation warrents.

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Old 09-19-2011, 08:04 AM   #93
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It is not rocket science, it is simple math . If you have the cash to buy something then:

Pay cash (or pay off the loan) when loan rate is higher than investment rate

Finance when investment rate is higher than loan rate
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Old 03-25-2013, 09:31 PM   #94
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I want to thank all you (taxpayer - including myself) for paying for my Airstream with my military/VA retirement.
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Old 03-25-2013, 11:50 PM   #95
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Just my two cents: Retired and plan on using my Cloud 25 3-4 months a year. I financed because my return on investments is greater then my loan (4.5% loan). Also not really concerned if it is ever paid off. Cash is King so I like to hang onto the cash. Needless to say the payments should not place a hardship on the buyer. Be comfortable with the payments or save for a bigger down payment.
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Old 03-26-2013, 06:28 AM   #96
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i believe interest on you airstream is tax deductible anyway.

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Interest on a first and second home qualifies for the home mortgage interest deduction on Schedule A. The IRS considers boats and RVs to be a home so long as they contain sleeping, cooking and bathroom facilities.
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Old 03-28-2013, 11:10 AM   #97
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i believe interest on you airstream is tax deductible anyway.
Remember that this only matters if you itemize deductions.

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