Finance plan or I don’t care?

Anything that can be financed gets an inflated price. I.e., housing, college, health care, automobiles. If a purchase can be financed, people begin to evaluate the cash flow hit instead of the overall price, which the seller then adjusts higher. Since they're making more on the product, this helps car makers offer very low (or zero) interest rates. Of course carrying debt is incentivized today by tax laws and low interest rates.

Personally I traded a 2011 GMC Sierra 2500 Duramax for my 2017 Tundra. It was the end of the model year so I got a SR5 4x4 for $31k. I didn't care about extras, just wanted the V8. I financed the ~$10k at 0%. After 20 months or so, I found this site and am starting to make some upgrades on the truck.

I greatly appreciate all the Tundra owners here, you have helped a lot.

 

The only thing I pay interest on, are assets that make an even greater return than what I’m paying (rental houses, for example).

I’ve bought all of our previous personally owned vehicles the past 5-7 years with cash only.
On my business side, same deal (multiple large truck and equipment purchases are all with cash, same with payroll and accounts payable). It’s always a benefit in my opinion.

And let me tell ya, buying a used Tundra when you can easily buy new, isn’t easy LOL. But I know for a fact vehicles depreciate, and my truck was going to get beat and used like a truck. (I have a nice newer car for business)

Now I do have a new debate, which I wasn’t expecting. And that’s Daily Driving the Tundra because I love it so much. In that case, I might consider new. But it won’t be my farm truck. And I honestly didn’t expect to fall in love with the Tundra as much as I have. My daily driver has turned into the back-burner and Tundra into the DD.


So moral of my story, pay your truck off, save up enough extra to buy what you want outright with cash, then sell your Tundra and upgrade with no debt to bank.

Unless said bank is 0%, then use the shit out of their money and profit off your own.

 

You are my hero boosted! Thanks for sharing.

 

That sounds like sarcasm, but given the vibe of your initial post I’ll lean towards you are being sincere in your comment. Lol
You have done an absolute amazing job at paying down your Tundra so quickly. There is no reason at all you can’t keep going, once paid off, stick $xxx figures in the bank after payoff for a short time and have another new Tundra before you know it - paid in full. Then keep socking payments away anyways, so you can have a backup plan or benefit from hard cash via other avenues of investment.
So that’s my vote!

PS - your Tundra is gorgeous!!!

 

Completely serious Sir. Sorry the response sounded sarcastic, absolutely did not mean for that. My wife and I are working towards cash only spending to be prudent for the future of our daughters.

Appreciate the nice note, we are working extra jobs and such to get it paid off. Once we pay it off we need to find an investment. We suck at investing unfortunately.

 

I figured so!!
Excellent!!! Well congrats to you on trying to better you and yours!!
Kids will do that to you, especially little girls! I’m trying to groom my 11yr old girl into ruling the world
My wife and I were on opposite shifts for 9+ years to pay down the man and make shit happen.
Investing is rough. So many options.
I look at the investing side just like the vehicle side. Buy your first house (small enough where your payment is easy), pay as much down as possible over 5+ years, save up cash over said years, by a tad bigger house to live in, rent your 1st smaller house out, and keep going. Before you know it you’ll have 3 families paying the mortgages on your properties and 50-60yrs old will roll around quick and you’ll have multiple sources of income.

 

I'm lucky and had the cash saved up, so I bought my Tundra outright.

 

Leased then bought outright

2 years left

 

I follow the school that "savers are losers"... This does not mean that you should run at night with scissors when it comes to spending money!!! What it means is that the "banks" don't give you anything on savings and investments. Saving little green pieces of paper is a fool's dream. They don't want your pieces of paper because they have a printing press that makes more pieces of green paper for nearly free. Now you have to face the real dilemma that is literally a crime in our society. Where to invest? The market is rigged and over-valued. Companies don't have any hard assets... They lease their buildings and make everything they can outside of our country. If you default on your truck, they come and take your truck. If Facebook defaults what do you take? I do rental property but I have always worked the trades and can do my own repairs. If I wrote checks for the work I do I would lose my ass. Bitcoin? Not me, too volatile. Gold and silver? Maybe but there are guys who have waited 20 years for their ship to come in. Finally, with inflation the way it is your saved little green papers are worth a little less every day. The system is rigged to force you to spend, and punish you for saving. I have no answers, but I just like for people to think about the true value of their Chinese Nike shoes and their $6 Starbucks coffee. If we spent less then we wouldn't have to work so hard to make the payment. Do I save money? Absolutely. But as soon as I have enough to pay cash for another trashed out house, I buy it for cash. Then I fix it up and rent it to someone who will sadly never "own" anything. My properties are all working for me, everyday, so I don't have to make as much in the field. Wash, Rinse, Repeat. Rant over... Enjoy your weekend everyone, I'm off to finish some drywall!
(bonus points will be needed due to this being reply #69)

 

Bought my truck in the latter months of 2018, $5k down and financed $42k 0% for 60 months. I’m paying it out over 5 years.

 

I totally get what you are saying and agree 100% with pretty much everything - market rigging, the printing press, inflation, incentives. You're dead on. I'm not going to try to sell you on bitcoin. But I want to respond to your mention of it, for the record. You probably know all I'm going to say.

Paper is not a bad technology for money. In fact, paper is a great money substitute. The problem with our paper money is the banks' secrecy and dishonesty. We can never see the Fed's ledger. It is a secret. As a result, we will never know the truth - about anything involving money. Hiding the truth about paper money is certainly how markets are manipulated. And this manipulation can be kept going for a very long time - as long as people continue to chase after the bankers' paper. So what I'm saying is, secrecy and dishonesty are the real problems with paper.

Bitcoin solves these problems by making the ledger public information. You always have audit access to the bitcoin ledger, you can even keep it in your possession if you want. So, bitcoin is essentially just an honest unit of account. Given an honest unit of account, people can hold their institutions accountable. That's really why bitcoin is dangerous. The public nature of the ledger also makes it immutable and permissionless. You can't be prevented from recording transactions in it. (There are some caveats - bitcoin has forked - I won't discuss it all here).

Anyway, and you probably know all this. Thinking of bitcoin purely as a speculative instrument is misleading. But people today are highly susceptible to this kind of thinking, and easily seduced by it. The speculator thinks, "I'm going to make dollars!" The bitcoin user thinks, "I'm going to avoid dollars!" This is why the incumbent payment system works hard to get video and media published which calls bitcoin "digital gold" and which talks up the idea of "hodling". Also, as you pointed out, there is market manipulation -- another attack vector is making sure the "price" (in USD) goes back and forth so adoption is disincentivized.

And they are slowing adoption. Slow governments needed time, they're finally moving. Eventually we'll have SanctionedCoin and TerroristCoins. But, at the same time, in bitcoinworld, these problems are all being dealt with. Bitcoin may or may not succeed. It's still just an experiment. It is being fought very hard, primarily with narratives first. We'll see what happens.

Btw, bitcoin users can gain privacy, by obfuscating the source of their coins - after coups and forks and much BS and many delays, this is finally being built into the wallets now, it's called shuffling. Incidentally, I am in real estate too. Mostly commercial, when someone doesn't pay, I lock the door!

 

I have a good friend who likes gold and silver... I commented that the price of gold swings and moves constantly. His reply was one I will never forget. He said that gold and silver are god's money. There is a limited amount, and the cost of their extraction maintains the value. His best words were that the US has become so arrogant with their fiat paper that they think that gold moves around their dollar. His belief is that the value of the dollar moves around the gold. If he is right then we are in for one hell of a ride.

 

I’ll typically do my paid off trade in plus 5k or so when I buy new vehicles which has worked out to financing 22-25k over 60 months at the lowest rate I can get.

Beginning of next year my 09 Crewmax and my 2016 Challenger will be paid off. The little guy on my right shoulder is telling me wait 2-3 years and handle other priories. The little guy on my left shoulder is telling me I could trade both on something pretty nice and probably only finance about 10-15k.

We’ll see which one wins.

Retirement fund doing OK, good head start on 529. No other family debt except a mortgage. The key to happiness in marriage in my opinion is a joint pot for joint expenses and separate pots on top of that so you don’t kill each-other over money. Otherwise I’d always be waiting in line to satisfy my priorities behind travel.

But you have to trust eachother not to build a mountain of secret debt and have good income on both sides to make it work.

 

Personally, I'd just rather not carry any debt, except for my mortgage. We haven't had a vehicle payment for 15 years now and, we like it that way. Yes, it means we have to drive vehicles that are a little older and without all the latest and greatest tech but that's ok by me. Simpler is sometimes better and I really don't care what the "Jones's" are up to. Plus, that car payment money, for us anyway, is better used for travel and other things we like to do.

When shopping for my Tundra a couple of years ago I set my budget at $20k cash. It took awhile but I eventually found my '10 4x4 with 67k on the clock. To be honest, I REALLY wanted a '14 1794 but they were just too much over the budget we had set.

After almost 2 years with my '10 I couldn't be any happier. It doesn't have all the latest and greatest but it certainly meets my "needs".

The day I bought it:


As it sits now:


I still have a ways to go but it's getting there, a little bit at a time.

 

@Taco-Bender... You're not missing out on any tech. The new "tech" in my 18 drives me nuts. I don't like the adaptive cruise, the auto dimming headlights are annoying, and the buttons on the steering wheel are different than they are on my '15 tacoma. Every time I try to turn up the radio my phone tries to make a call. That and the fact that every now and then it starts screaming BRAKES! for no reason.

 

Almost completely agree with your post! Good points. Mine was don’t buy vehicles you can’t afford, just like your mention of Nike’s lol.
And you do have to save to an extent: from a business standpoint, having hard assets and saving money to some extent, is a must. Is all we have is hard assets, minus $70,000,000 in buildings we lease. In order to buy those buildings (my plan) I need to save hard cash, and that takes time. Sure I’ll drop big chunks into short term CD’s (moving a chunk over next week at 2.37% for 12 months), but overall I’m saving cash. And our EBITDA is very strong because of that, in turn making the company more valuable if we decide to sell (no plans as I’m no where near retirement).
There are benefits to having a good chunk of green on hand from a business standpoint and personal!

 

I used to spend all my play money on hunting until I got on this damn forum and saw what everyone is doing with their Tundra's. I don't buy vehicles brand new. The instant depreciation sucks. My company gives me a vehicle allowance every month so I will have my 2014 paid off in a few months. I bought it 2 years ago. Then use my vehicle allowance to do interesting things to my truck......It is a vehicle allowance Definitely do whatever is possible to not have payments!!

 

Have to finance the one I'm getting this weekend but I'm hopeful that the next one after that I'll be able to get without being a slave to the bank. I don't hate having to finance a vehicle too much especially since I'm fairly young, I just feel fortunate that even though my basement just.flooded and appliances and furnace are fried, I can go get them replaced in cash. I'm pissed and would rather have that money but at least we don't have to think twice about getting it done asap.

 

At your age you are doing well. Sounds like you have a better grasp on money and it's real purpose. If you are so inclined, I will give you a small piece of advice... People like to categorize things to justify the purchase. There are "wants and needs"... You "need" new appliances, but they make you "want" super fancy front loaders and a refrigerator with a TV in the door. This is marketing trying to get you to spend more for shit you don't need. Then you can finance it for 6 months "same as cash"... For a little bit bigger payment, you can live this amazing lifestyle. This is why I drive an SR5 rather than a 1794... Same damn truck, less fancy shit.
I have really only three categories... Assets, Liabilities, and Food.
1.Assets make you money. Investments, rental properties, tools, etc...
2.Liabilities are things you need, but cost money... Cars, toys, personal home.
YES your personal home is a liability. It costs money and only can make money if you sell it. Home equity loans are a scam designed to keep you poor.
3. Food self explanatory
If you need a truck and the truck can make you money, then financing the truck is no big deal. If you want a truck as a toy, then that is fine too, just realize it is stealing from other areas of your finances that will hold you back later.
If you have the cash to buy the appliances then you have good fiscal control. Just remember that saving isn't enough anymore.
FYI, I'm not as old as most would think... I'm 41 with 5 rentals and my own home, and HVAC company. I was trained by some stubborn hard nosed old timers that taught me their way at a very young age LOL,

 

Selling / trading your older reliable Tundra in order to finance a newer Tundra just because it has some fancy shit that your current truck doesn't have makes no sense to me. If your current truck is doing the job you need it to do, keep it going.

 

Absolutely this. I went through FPU then lead several classes. Debt free including house and in a couple of months when I get my Tundra I will just write the check for it.

 

Everything paid off except the house and don’t plan on going back! Dave Ramsey FTW

 

For me(purchased a '16 used in '17) it came down to the trade value of my FJ(beat to pieces) and final price out the door. I then worked back into financing.

The dealer gave me an astonishing price for my FJ that has been abused on the trailer for 11 years(needed $3-5k in work), didn't additionally markup the truck price(saw it two weeks in advance), and once we agreed upon the price, I was able to finance through my bank for right at 1%. At a rate that low, I was able to take my cash and place it back in stocks/savings where it could attempt to(partially) battle inflation.

I doubled payments monthly for the first twoish years of the loan, and then backed down to <$100 payments for the remainder to avoid cutting the loan short.

It's all about the price out the door and if you can make more than the interest rate with the money in your control.

Just my $0.02