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Brute 23

Brute 23
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We don’t fit into Daves target audience. He gives allot of good advice and is enjoyable to listen to though. It’s hard to find a single “advisor” for our situation so I listen to several and use what works best for us.
Isn't that how most things are? There is never a one size fits all.

I deal with guys who don't fit either but you will find they follow some of the same basic financial principles.

I was talking with one who just built a multimillion dollar home in aspen and another who was buying a monster boat (poor them lol). Both have MBA financial guys who told them borrow the money because they have investments all over the place that earn more. Both ended up writing checks for both items. The banks wore them out with questions so they said screw it. Both said they are glad they did. Both told me the same thing... it's nice knowing you are making money on that difference but it's a lot nicer knowing you don't owe any one a darn thing.😄

... and I agree. That feeling is addicting and it's amazing the things you can will choose to do with out to maintain that feeling.
 

shaz

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With rising inflation we should expect high interest rates. That is the only tool the Fed has to curb inflation. High interest rates will kill our economies. Credit will dry up. Spending with stop in crucial sectors like housing.
Why raise interest rates on a problem that boils down to non-production?
 

Lucky

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I’d like to know what Dave would advise on the following situation.

You have $350,000 in an investment account earning an average 8% over the last 5-6 yrs. The land next to you comes up for sale for $180,000 and is appraised for $220,000. Do you make the 20% down payment (you have the down payment in another account) and finance the rest at 4% or, take the the money out of the investment account pay cash then start hitting the investment account hard to catch it back up? Lets also say the land payment won’t affect anything else you have going and you plan on stocking it to expand a cow herd. Also figure in a 8-10% increase in land prices every year and the fact that you know the basics of how to pay your bills. We all already know not to buy a new Bassboat on a 15 yr note at 18% when you’re pulling into the gas station on fumes every payday.
 
OP
HDRider

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I’d like to know what Dave would advise on the following situation.

You have $350,000 in an investment account earning an average 8% over the last 5-6 yrs. The land next to you comes up for sale for $180,000 and is appraised for $220,000. Do you make the 20% down payment (you have the down payment in another account) and finance the rest at 4% or, take the the money out of the investment account pay cash then start hitting the investment account hard to catch it back up? Lets also say the land payment won’t affect anything else you have going and you plan on stocking it to expand a cow herd. Also figure in a 8-10% increase in land prices every year and the fact that you know the basics of how to pay your bills. We all already know not to buy a new Bassboat on a 15 yr note at 18% when you’re pulling into the gas station on fumes every payday.
I'm not Dave, but,,,

Borrow every nickel you can and buy the land.
 

Brute 23

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I’d like to know what Dave would advise on the following situation.

You have $350,000 in an investment account earning an average 8% over the last 5-6 yrs. The land next to you comes up for sale for $180,000 and is appraised for $220,000. Do you make the 20% down payment (you have the down payment in another account) and finance the rest at 4% or, take the the money out of the investment account pay cash then start hitting the investment account hard to catch it back up? Lets also say the land payment won’t affect anything else you have going and you plan on stocking it to expand a cow herd. Also figure in a 8-10% increase in land prices every year and the fact that you know the basics of how to pay your bills. We all already know not to buy a new Bassboat on a 15 yr note at 18% when you’re pulling into the gas station on fumes every payday.
That's not a Dave question.

Couple of things.

Why are you buying the land? Just because it's value is a little more at this moment doesn't mean it's a good buy. What is your plan? If it's to run cows will the cows pay for it?

Are you buying it to add to your personal portfolio and are going going to lease it back to the cattle operation?

Have to know the plan to decide how to go about buying it.

Next, if a person had interest in buying some thing like that they should have had an account with cash being saved for that purpose. Dipping over to another account which may be retirement or some thing else to fund another project is a slippery slope and can end badly.

Personally, I'd at it to my personal portfolio, lease it to my cattle. I'd get a healthy down payment from selling assets or saved money for that purpose and buy it as long as the payment was easily manageable.

It's rarely the payment that actually gets smart people, imo. It's the lack of planning leading up to the purchase that gets them... even if it's long, slow death.
 

Nesikep

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I think @HDRider missed one. It's almost always less expensive to make repairs to a used vehicle than it is to make payments on a new one, and in any case, buying a vehicle new is rarely a good financial decision. The value drops too much as soon as you leave the dealership with it.
I agree that an off-the-lot new vehicle is often not a good choice, especially on more expensive vehicles, but a 5 year old vehicle would be good and have depreciated a lot, the thing is you often won't get purchasing incentives and 0% financing on them, so you lose some there as well

For me, I have a decent amount of fluid cash, no debt, but instead of investing in stocks, I'm investing in things I need to keep the farm running.. I've got 5 years of diesel I bought in Mar 2020, I've got a few years of bale twine, oil, filters, grease, tires for the vehicles... If there's a serious inflation coming it should at least tide me over for the prices of my goods to catch up a bit

Wish the text was more clear on this image
248969346_4214587968649944_7793353168622503074_n.jpg
 

Rafter S

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I’d like to know what Dave would advise on the following situation.

You have $350,000 in an investment account earning an average 8% over the last 5-6 yrs. The land next to you comes up for sale for $180,000 and is appraised for $220,000. Do you make the 20% down payment (you have the down payment in another account) and finance the rest at 4% or, take the the money out of the investment account pay cash then start hitting the investment account hard to catch it back up? Lets also say the land payment won’t affect anything else you have going and you plan on stocking it to expand a cow herd. Also figure in a 8-10% increase in land prices every year and the fact that you know the basics of how to pay your bills. We all already know not to buy a new Bassboat on a 15 yr note at 18% when you’re pulling into the gas station on fumes every payday.

I can't speak for him, but I've listened to him enough to be pretty confident he'd advise you to go for the option I highlighted.
 

faster horses

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If you are a cattle rancher, whether you die rich or poor
Depends on the cattle market the day before.
------------------------------------------------------------

What people don't understand about farming and ranching.
you live poor and die rich.
 

D2Cat

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I’d like to know what Dave would advise on the following situation.

You have $350,000 in an investment account earning an average 8% over the last 5-6 yrs. The land next to you comes up for sale for $180,000 and is appraised for $220,000. Do you make the 20% down payment (you have the down payment in another account) and finance the rest at 4% or, take the the money out of the investment account pay cash then start hitting the investment account hard to catch it back up? Lets also say the land payment won’t affect anything else you have going and you plan on stocking it to expand a cow herd. Also figure in a 8-10% increase in land prices every year and the fact that you know the basics of how to pay your bills. We all already know not to buy a new Bassboat on a 15 yr note at 18% when you’re pulling into the gas station on fumes every payday.

In today's environment that is a hypothetical question because if you hesitate only a few days it will have already been sold. Maybe even have a bidding war and end up selling over the appraised value.
 

faster horses

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Just get it bought, one way or another. Rarely does the place next to you come up for sale at a price that is reasonable. You are fortunate. Good luck to you!!
 

Lucky

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What if we just work hard don’t spend all our money on frivolous things and concentrate our efforts on making money more than we do on saving and living like a miser. I don’t see a thing wrong with buying a $75,000 new truck, IF YOU CAN AFFORD IT. I’ve got a few friends that would be multimillionaires if they spent half the time trying to make money as they do worrying about were every nickel goes.

A friend of mine bought a property recently for $400k , this property was fully rented out and was going to make the payment plus pay him $1,200 a month with a 10 yr ROI. Everyone but me told him he was crazy for going into that kind of debt. To me it was a no brainer even if he had to borrow 100% to get it. I guess different lines of thinking make the world go around. My guess is some of the folks that called him crazy will be renting from him.

We put 20% down out of the cattle account and borrowed the rest to buy the land. I can fertilize and plant grass next year I guess. We didn’t think twice about it.
 

D2Cat

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What if we just work hard don’t spend all our money on frivolous things and concentrate our efforts on making money more than we do on saving and living like a miser. I don’t see a thing wrong with buying a $75,000 new truck, IF YOU CAN AFFORD IT. I’ve got a few friends that would be multimillionaires if they spent half the time trying to make money as they do worrying about were every nickel goes.

A friend of mine bought a property recently for $400k , this property was fully rented out and was going to make the payment plus pay him $1,200 a month with a 10 yr ROI. Everyone but me told him he was crazy for going into that kind of debt. To me it was a no brainer even if he had to borrow 100% to get it. I guess different lines of thinking make the world go around. My guess is some of the folks that called him crazy will be renting from him.

We put 20% down out of the cattle account and borrowed the rest to buy the land. I can fertilize and plant grass next year I guess. We didn’t think twice about it.

Lucky, I agree with you. If one can purchase property with a positive cash flow you almost have to work at getting upside down!!
 

herofan

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Apparently things vary greatly depending on where you live. A million dollar house in rural Ky would be a super-nice house. If a person here had things paid off, a million in cash, an a good job with retirement, that person is set.

Most people i know here in Ky act as if they don’t have two dimes to rub together. A guy told me recently that he had to pay $2,000 up front for dental surgery, and he said it was rough. He said he didn’t have that kind of money just lying around; however, he has a nice house, cars, etc.
 

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