Looking at an 2014 AR192 This Weekend

[DavisAR195]

I use credit for everything because I find that it can be used for leverage. Responsible credit use is an art between keeping positive net worth, manageable payments, reducing interest fees, and leveraging savings. I'm crazy about careful planning through amortization calculators, and estimating depreciation.
I won't bore everyone with the numbers

I’m in agreement, use someone else’s money at 4 to 4.5% and keep my cash in the market at 8-10%.

 

[I_squared_r]

Yes! Many people don't realize that. I graduated college a few years ago and finally i'm earning decent money. The problem is that I speculate that the market is at it's peak and i'm waiting for a significant down turn so I can buy stock at discounted prices.

Of course I should be saving every penny for that time, but I can't put my life on hold while I wait for that opportunity. So I bought the boat. I decided that I could borrow money at 4.8% while receiving 3% on low to no risk investments. By keeping my money, I have an emergency fund, and the ability to buy in to real estate and discounted stocks if the opportunity happens. I know buying into real estate could be difficult because I am carrying debt, so I am getting rid of my leased car and buying a pre-owned pick up instead of getting into a new lease. That puts me into less debt then the average American. It also helps that i'm in my 20's and single. In other words, it's unlikely I will get married and have children soon (typical large expense people don't prepare for).

The boat is not the best financial decision, but at least I didn't buy new from Yamaha at 6% (sorry if you did )

 

[DavisAR195]

Yes! Many people don't realize that. I graduated college a few years ago and finally i'm earning decent money. The problem is that I speculate that the market is at it's peak and i'm waiting for a significant down turn so I can buy stock at discounted prices.

Of course I should be saving every penny for that time, but I can't put my life on hold while I wait for that opportunity. So I bought the boat. I decided that I could borrow money at 4.8% while receiving 3% on low to no risk investments. By keeping my money, I have an emergency fund, and the ability to buy in to real estate and discounted stocks if the opportunity happens. I know buying into real estate could be difficult because I am carrying debt, so I am getting rid of my leased car and buying a pre-owned pick up instead of getting into a new lease. That puts me into less debt then the average American. It also helps that i'm in my 20's and single. In other words, it's unlikely I will get married and have children soon (typical large expense people don't prepare for).

The boat is not the best financial decision, but at least I didn't buy new from Yamaha at 6% (sorry if you did )

If your in your 20’s why are you trying to time the market and keeping your funds to in a conservative fund? You should be dollar cost averaging into a more aggressive fund or target date fund depending on what your ultimate plans are for the funds.

 

[I_squared_r]

If your in your 20’s why are you trying to time the market and keeping your funds to in a conservative fund? You should be dollar cost averaging into a more aggressive fund or target date fund depending on what your ultimate plans are for the funds.

You have a valid point, but I have expectation of another recession in the near future and I don't feel comfortable investing with the current volatility. I'm trying to learn the market through reading and simulated trading in ThinkorSwim. In a few years (or less) I will be better prepared for investing. With that said, thank you for bringing up the "Target date fund" because I wasn't aware of the existence of those. I will think about this.

 

[Peter simon]

Just my thought. If you are financing why not buy new. If you had 20k cash to spend then you have a 20k budget. If you finance the difference between a 20k used boat and a 30k new boat is like $70-$80 a month more.

Boats are fun. Not an investment.

I financed 12 years (258 a month) at which point both my kids will be done with college/graduate school and maybe we will go for a 24'.

Life is about having fun. Houses, cars and boats are not investments. 401ks are.

 

[I_squared_r]

I don't think of a boat as an investment. We have different schools of thought.You are committed for 12 years in your boat. It's likely that I will only have this boat for a few years because I am known for changing things a lot. The difference in our loans is that my loan is 6 years and most of the depreciation has already happened. It's likely that I can change boats in a few years and only lose a few thousand dollars. If you decided to get a different boat, you may be in the negative for $10-$15k. But you are fine with that because you will keep your boat for 12 years

 

[DavisAR195]

I don't think of a boat as an investment. We have different schools of thought.You are committed for 12 years in your boat. It's likely that I will only have this boat for a few years because I am known for changing things a lot. The difference in our loans is that my loan is 6 years and most of the depreciation has already happened. It's likely that I can change boats in a few years and only lose a few thousand dollars. If you decided to get a different boat, you may be in the negative for $10-$15k. But you are fine with that because you will keep your boat for 12 years

If you are only going to have the boat for a few year and plan buying a house and are worried about your debt ratio. I would put enough down to cover the depreciation over two years and finance at 15 years. That gives you a buffer if you need it and debt to income ratio will look better.