Financial issue? In a good way

[Brute 23]

They have fooled people in to thinking that they refuse you if you don't have a credit score because you are a risk but look back on history. In the banking crisis of 08 they were canceling credit cards on people who always paid off their cards, not people carrying balances. I had a card out of college with like a 3K limit. It rarely carried a balance for more than a week or two. I would just log in every week or so and pay the balance, I didn't even wait for it to be due. They canceled my card. Was I, a person who always paid, a risk? No, I represented a $3K liability with no return on their money because it was always paid it off.

Do you think they give you higher limits for no reason? They just need you to slip and have a medical issue or lose a job or some thing like that one time and carry a balance so they can make money off you. They are just hyenas and vultures waiting for a moment of weakness.

They also know you will spread the marketing plan for them to your kids and friends and even though you never missed a payment, statistically, your kids or wife or husband or a young person you mentored will and you will have done their dirty work.

They don't get rich off of every one making their payments on time. People is the US are 1.142 TRILLION DOLLARS in debt. I always find that staggering considering every one you always talk to with a card always pays it off on time.

 

[chaded]

Speaking of buying a new vehicle, my wife and I having the twins now and with the potential of having more kids started looking for a new vehicle. Her little escape is not cutting it and my f350 isn't going to either.

We wanted a new toyota sienna platinum (you cool people don't make fun, we're practical lol). You can't hardly find one. Well, i finally did find one that was allocated and coming soon. I emailed on availability and i was contacted pretty quickly by an eager salesman. He said it wasn't reserved and I asked what I needed to do to reserve it.

He said "well we would have to go over numbers and consider if you had a trade in, were going to finance, or paying cash. Do you have a trade in and how will you pay?" Soon as I told him no trade in and I was paying cash his tone changed. He flat out told me that they do what is absolutely best for the dealership and people with a trade in and/or were going to finance take priority.

Ok….. I contacted another dealer and they want a 2k dealer markup on top of full price but they had no problem with cash. I kept looking and found one at a third dealer that took 1k off and will take my cash no problem. Funny thing is, the first dealer that didn't want my cash contacted me today to see if I was still interested. That would be a no…

 

[Twisted]

Speaking of buying a new vehicle, my wife and I having the twins now and with the potential of having more kids started looking for a new vehicle. Her little escape is not cutting it and my f350 isn't going to either.

We wanted a new toyota sienna platinum (you cool people don't make fun, we're practical lol). You can't hardly find one. Well, i finally did find one that was allocated and coming soon. I emailed on availability and i was contacted pretty quickly by an eager salesman. He said it wasn't reserved and I asked what I needed to do to reserve it.

He said "well we would have to go over numbers and consider if you had a trade in, were going to finance, or paying cash. Do you have a trade in and how will you pay?" Soon as I told him no trade in and I was paying cash his tone changed. He flat out told me that they do what is absolutely best for the dealership and people with a trade in and/or were going to finance take priority.

Ok….. I contacted another dealer and they want a 2k dealer markup on top of full price but they had no problem with cash. I kept looking and found one at a third dealer that took 1k off and will take my cash no problem. Funny thing is, the first dealer that didn't want my cash contacted me today to see if I was still interested. That would be a no…

Usually it's harder to buy with a trade-in vehicle because once that dealership sells a new car, it has to pay for it. If they took in a trade-in they have at least part of the new car's revenue tied up in another vehicle that has to be sold. Lots of times if the vehicle that you traded in isn't resold within a day or two, it is shipped to an auction to keep the cash flow going.

 

[Travlr]

Usually it's harder to buy with a trade-in vehicle because once that dealership sells a new car, it has to pay for it. If they took in a trade-in they have at least part of the new car's revenue tied up in another vehicle that has to be sold. Lots of times if the vehicle that you traded in isn't resold within a day or two, it is shipped to an auction to keep the cash flow going.

There are very few dealerships that own any cars. The cars are "floored" by a dealership and they don't own them. They also make a boatload on trades because they never give full value and that is part of the system they use to make money. Customers are always better off selling their vehicles instead of trading them in.

 

[who cares]

I know you keep saying they won't refuse you for poor credit but that's simply not true. I've been refused many times, banks here even have the gall to charge you $500 to apply for a loan ( no I have never done that lol), and I ended up borrowing money from my dad for our first house because the banks determined our debt to income ratio was too high, and they wouldn't loan us $30,000... Paid it off in 2 years and tried to get land for $30,000 and bank said we were still a risk even though we had paid $2,000 more on our student debt every month by a living in the parts room of a John deere building, selling everything we could and bicycling miles to work.. A local guy heard we were wanting to buy land and he let us buy the land in two lump sums with zero interest. Talk about a blessing. But then we proceeded to only do things as we had the cash to afford so when we wanted to buy a place later, we had no credit history of paying.... I even pointed up to the bank managers that we had a property with value that we bought everything in cash, banker told me they don't even want to hear things like that.
Then we owned a business and had no credit line as didn't go into debt for anything. Every Bank still refused and when we showed them our all of our credit card bills that we paid off every single month, and how much student debt we had paid off in 5 years, and they said it had nothing to do with how much we had already paid off, but everything was based on loc and their calculators said we didn't have good enough credit for $90,000 house. At this point I felt like dirt and was sick of begging for money that I knew I'd pay off in a quarter of the time anybody expected. We'ed learned living on nothing, DH bicycling 7 miles to work every day to save money and us squishing our kids into a little 30 year old Ford escort that had been painted three tones because it hit a beaver before we bought it with cash. I am extremely debt-averse for any reason so paying debt off is very important to me because it reduces the amount of money I need to make but it makes getting loans really hard. And it just gives me tremendous peace of mind to pay off things, as my dad lost homes, boats etc in the crashes in the '80s, and then he lost another 180,000 with mutual funds and such decades later. But I wondered how anybody in the world was getting a loan if we couldn't get one. Then I remembered, we needed debt to get a loan - every one of my brothers had followed the same cash principles and been refused loans, so they got smart, went to the bank and got a 6-month loan that they paid off, and then the bank let them get mortgages. It's exhausting playing their games.
Now we can play their game because we have more land and a mortgage that I'm going to have paid off in 2 years which will do nothing to my loc. Thanks to an insane market, our place has tripled in value.

 

[cowman82]

every bank is different.. even the branches. best bet is to talk to the MAIN loan officer. Call in and ask for them. Its usually the VP or president. If they suck.. go to a different bank. On most of my places I've bought, i'm usually in talks with 3-4 banks. sometimes it takes 10 banks for someone tto want to do the loan. But once I started talking to the man in charge, things go 10x easier, 10x smoother, and you get a better rate. Life got a lot easier when I found this out.

 

[fnfarms1]

There are very few dealerships that own any cars. The cars are "floored" by a dealership and they don't own them. They also make a boatload on trades because they never give full value and that is part of the system they use to make money. Customers are always better off selling their vehicles instead of trading them in.

I can attest to that. Guy I know had 2002 Ranger. Traded it in got $500 for it in really good shape. I have no use for it and would have gave $2000 just because it was well worth it, but didn't know he was trading it. Now the dealer claims $5grand is bottom dollar to resell same Ranger. Buttholes!

 

[cowman82]

I can attest to that. Guy I know had 2002 Ranger. Traded it in got $500 for it in really good shape. I have no use for it and would have gave $2000 just because it was well worth it, but didn't know he was trading it. Now the dealer claims $5grand is bottom dollar to resell same Ranger. Buttholes!

yea.. don't let them fool you into thinking they just "sell them at auction" I sold a F250 and traded it in. got 5k in trade.. salesman told me the same shyster BS lies. I didn't care, just needed a new truck. a few days later it was on their lot 12,500.

 

[Moparmaniac07]

It's like playing against the house when you take a loan. They don't get rich by borrowing money and from their customers and paying interest...

Actually they do, that's what CDs are. They then take that money and use it somewhere they'll get a higher return than what they're paying out.

 

[Travlr]

Actually they do, that's what CDs are. They then take that money and use it somewhere they'll get a higher return than what they're paying out.

Never thought of it like that... but paying at 5% when they loan it at 8+% and the actual "handling costs" are a fraction of a percent is still making people rich or they wouldn't be doing it.

 

[Moparmaniac07]

Just for fun lets say you put a $1,000,000 in the market and hoped to average 5% a year over 10 years. How much would that be on avg every year? Now just for fun lets say you weren't willing to get a job that paid what the business you sold made. I didn't have anywhere near a million dollars but I think big numbers show how little 5% is. I know the gurus say you can make 10-12% but in reality 5-6% is what you can count on, plus you gotta pay tax on what you make if you plan to live on it.

5% is really conservative, unless your talking withdrawal rate. Then you'd be at 50k per year, essentially indefinitely, and backtesting it would have you winding up with more money you started with in all but 3 or 4 starting years. 4% includes the great depression.

10-12 percent is based on the historical return of the market. Most people are assuming the future won't be worse than the great depression and ww2, but if you are, that's fine. Though in that scenario, I don't think it's necessarily safe to assume you'd be able to keep your land.

But in any case, if you put the money in an earning account (savings, money market, index fund, etc.) that was higher than the mortgage rate, in no cases do you have to work longer because the money is earning you more.
Take your $1,000,000, say that's your mortgage, 30 year fixed ath the 3.8% mentioned. That's a payment of $4,660/month. Put it in the market at your 5-6% or spread it across a few savings accounts at 4.5% if you need even safer (to keep under the 250k fed insured rate). That money grows while paying off your mortgage, and when it's done, you'll still have a pile of money to keep growing.

 

[fnfarms1]

Im sure this will ruffle feathers, but our plan is to sock as much as we can toward the mortgage. Come April at tax time, pay the taxes and stick remainder (90-100k) toward it. Should be paid off Oct25. We will be 100% debt free except normal bills. Insurance, phone, etc. both with nice cars that should have 3-5yrs left in them, farms self sufficient.
I think this comes down to comfort level and goals. This has been my goal since buying this place. Honestly just hoped to be close by retirement, that's still 18-20yrs off.

 

[Brute 23]

Good plan. You won't regret it.

 

[wbvs58]

Im sure this will ruffle feathers, but our plan is to sock as much as we can toward the mortgage. Come April at tax time, pay the taxes and stick remainder (90-100k) toward it. Should be paid off Oct25. We will be 100% debt free except normal bills. Insurance, phone, etc. both with nice cars that should have 3-5yrs left in them, farms self sufficient.
I think this comes down to comfort level and goals. This has been my goal since buying this place. Honestly just hoped to be close by retirement, that's still 18-20yrs off.

It's none of their business to have their feathers ruffled, it's all about your comfort level. They can keep putting in their lucky numbers for the Gold Lotto draw each week and when they have a windfall they can do what they are comfortable doing.

Ken

 

[chaded]

Im sure this will ruffle feathers, but our plan is to sock as much as we can toward the mortgage. Come April at tax time, pay the taxes and stick remainder (90-100k) toward it. Should be paid off Oct25. We will be 100% debt free except normal bills. Insurance, phone, etc. both with nice cars that should have 3-5yrs left in them, farms self sufficient.
I think this comes down to comfort level and goals. This has been my goal since buying this place. Honestly just hoped to be close by retirement, that's still 18-20yrs off.

Wise choice.

 

[1982vett]

Im sure this will ruffle feathers, but our plan is to sock as much as we can toward the mortgage. Come April at tax time, pay the taxes and stick remainder (90-100k) toward it. Should be paid off Oct25. We will be 100% debt free except normal bills. Insurance, phone, etc. both with nice cars that should have 3-5yrs left in them, farms self sufficient.
I think this comes down to comfort level and goals. This has been my goal since buying this place. Honestly just hoped to be close by retirement, that's still 18-20yrs off.

That's all fine and good. Now after you've done that, in addition to any retirement and savings you may already be contributing to, continue to pay to yourself what you would have spent on the mortgage in some sort of investment account. You won't regret that in 18-20 years either. After all, you weren't planning on the "windfall" when you bought the place.

 

[fnfarms1]

That's all fine and good. Now after you've done that, in addition to any retirement and savings you may already be contributing to, continue to pay to yourself what you would have spent on the mortgage in some sort of investment account. You won't regret that in 18-20 years either. After all, you weren't planning on the "windfall" when you bought the place.

Exactly what we have been thinking. We understand using it to boost investments strategy, but we plan to just put it on principal and act like we never had it. Except we are going to hammer that mortgage and be done with it. Then up the investments and use some to live life.
The wife loves Disney, so had planned a trip there, instead we are staying closer to home this year. Going to Kansas City for Chiefs game etc and planning that Disney trip in Oct2025 as a mortgage pay off celebration. Honestly I don't care for Disney but cows aren't her love either. So farm gains a lot of usable income from mortgage pay off, she gets a trip.
My wife has battled breast cancer the last 2yrs and is done with it 6mths ago. I watched my dad at 35yrs old battle cancer for 2-3yrs. Both survived but aren't the same afterward. I'm a guy who tends to "nose to the grindstone", trying to step back and enjoy things alittle more after her cancer deal. None of us are guaranteed tomorrow, and doubt anyone cares how good I invested when I'm gone unless it benefitted them. My goal is not to set my kids up for life.