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Old 02-26-2020, 09:26 PM   #41
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Financing a RV

I've been camping when my kids were toddlers in 1979. Started out in a pop-up that cost $2,500 new. Future RVs were used TT. I believe keeping your debt down when you could be laid off. You never know when some bas$%$#d CEO will sell the company you work for and there you are with no job. Family members may get sick and we all know how the co-pays in medicine can eat you alive. Everybody brags about how well they do in the markets, but for some in the last recession took 8 years to recover from where they started. Don't be foolish and think markets will be your savior - what go up, goes down, sometimes drastically. The last two days maybe just be the beginning of disaster with the virus. I suggest you think carefully about financing a large ticket item that you could start out used. Need a new vehicle? Financing will be higher with that RV outstanding loan. What happens if you get hammered by a storm or fire? Insurance will pay for it you think. You will be paying plenty out of you pocket that insurance doesn't cover. I worked for a fire and restoration company and insurance companies. Don't ever believe it is all covered. Nothing is worth ending up underwater in finances. Life happens.
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Old 02-26-2020, 09:58 PM   #42
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I think the rule of thumb is to finance appreciating income producing assets and pay cash for depreciating assets. So finance a rental property, but pay cash for cars, RVs etc. of course not everyone can or will do this.

To put it in perspective, say you finance a $50,000 RV. The following year, it may only be worth $25,000 after depreciation,but you are still making payment on a $50,000 note that you might have only paid Down $3000. 47,000-25,000 equals you making payments on $22,000 that doesnít exist anymore in your asset column. Commonly referred to as being upside down.


I paid cash for a used unit and negotiated the teeth out of the seller, so I donít have much, if any depreciation. This time I took my own advice!
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Old 02-26-2020, 10:03 PM   #43
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We bought our first camper 2 years ago used, in cash, a little less than 6K and have put a few thousand in over the last 2 years on upgrades and maintenance. We searched for a while for the right one and we found it. The biggest difference between our 2004 model and one that's only a few years old is the way it looks, and it doesn't even look too old, really, especially after we upgraded to nice aluminum wheels. With 2 car payments and a mortgage I didn't want to add an RV payment on top of that and find out we didn't like it as much as we thought we would.
If you look at our days camped in our signature you'll see we've gotten a LOT of use out of it for people with (mostly) full time jobs. And because it is already depreciated we could probably sell it for what we bought it for if we wanted to upgrade.
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Old 02-27-2020, 12:01 AM   #44
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We bought our first camper 2 years ago used, in cash, a little less than 6K and have put a few thousand in over the last 2 years on upgrades and maintenance. We searched for a while for the right one and we found it. The biggest difference between our 2004 model and one that's only a few years old is the way it looks, and it doesn't even look too old, really, especially after we upgraded to nice aluminum wheels. With 2 car payments and a mortgage I didn't want to add an RV payment on top of that and find out we didn't like it as much as we thought we would.
If you look at our days camped in our signature you'll see we've gotten a LOT of use out of it for people with (mostly) full time jobs. And because it is already depreciated we could probably sell it for what we bought it for if we wanted to upgrade.
Now that makes a lot of sense. Like I said early in the conversation, buy a used RV, especially if it's something you would otherwise need to finance.

I got to thinking about the whole thread. Who said you even need to buy an RV to have outdoor fun with your kids? Growing up, I tent camped with the family (a lot), routinely had picnics in the park, swam in the lakes, hiked, and did plenty of things outdoors. Having an RV never was never considered a possibility or a necessity for enjoying the outdoors.

Maybe if you can't afford to pay cash yet for an RV for your young family, consider a tent or an old pop-up until you can afford to pay cash for the bigger RV. Your kids won't mind, and they might even be better off, having had the tent camping experience (with you).
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Old 02-27-2020, 09:20 AM   #45
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The best financial advice I got from a Credit Union adviser when I was in college. Buy your first car (or RV) and finance it. Pay it off as quickly as you can, and then continue making the payment into a savings account. When the car (or RV) is worn out, you'll have the cash to purchase an upgraded car (or RV).

I was a Registered Investment Adviser for a few years. The stock market hasn't really been a gamble for the last 120 years. On average, it has gone up somewhere in the neighborhood of 12% a year. The way to take the gamble out is to be a long term invester. Put money in every year while you are working, and take money out every year when you retire. It works. Open either a traditional IRA (if your taxes are high) or a Roth IRA, and buy an Exchange Traded Fund ETF that tracks a diversified index like the S&P 500. Many companites don't even charge a fee to purchase. Government employees have the S&P 500 as one of their investmen options. They put money in every payday. The secret to the market is buy low, sell high. You just have to patient.
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Old 03-02-2020, 07:29 PM   #46
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tax situation

I am amazed that by the time I get a chance, 876 people have already responded. That having been said, tax laws change. While the interest on your RV loan may have been deductible in the past, the standard deduction is now much larger than before. So, depending on your personal tax situation, look at tax advantages of deducting the interest or not being able to do so. I have taken the position of not using other people's money unless I really have to do so. I told my son-in-law to pay off his mortgage. He said "but Poppy, I'll lose my tax deduction". I said, "So, you want to spend $100 you don't really have to, in order to save $30 on your tax bill. Bad logic. I gave up on giving him tax advice. My point is , there is a tax consequence to your decision.
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Old 03-02-2020, 07:58 PM   #47
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I would like to forget about these last 2 days lol. But I made 33.45% last year and was up to 10.60% year to date on Monday but lost 8% the last 2 days.
You only lose if you sold, donít focus on the last few days. It will come back and youíll be up. Itís a ride, enjoy it
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Old 03-02-2020, 08:08 PM   #48
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Buying rv

Several things here.....

All RV's lose value very quickly. I know several folks who used long financing and 2 or 3 years later wanted to sell or trade-in. Unfortunately they owed far more than current value. Of course paying cash has the same pitfall.

Financing rates are so low today it might make sense to finance rather than buy for cash. Your cash in a reasonably moderate investment will earn 6% to 8% and financing might be 4%or less. I recently bought a car and the credit union financed it for 1.8% my invested money has been over 8% for many years. Why would I use cash.

My general rule is never buy new. There are a bunch of used RV's that are close to half their original price.
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Old 03-02-2020, 08:18 PM   #49
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I told my son-in-law to pay off his mortgage. He said "but Poppy, I'll lose my tax deduction". I said, "So, you want to spend $100 you don't really have to, in order to save $30 on your tax bill. Bad logic. I gave up on giving him tax advice. My point is , there is a tax consequence to your decision.
I never suggest to people to pay off their mortgage if they have a low interest percentage. Why pay off a 4% interest loan when you can make way more money in investments over the long term. What I tell young people is to max out their 401K or IRA. Way better advice. I know people who were using money to pay off their low interest mortgage and not maxing out 401Ks or IRAs.
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Old 03-02-2020, 08:23 PM   #50
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And if you wait a few months it will seem like these past few days never happened in the market. I find day trading to be to stressful and too much luck is involved. Investing for the long term makes much more sense.

Sometimes it is just worth the experience to finance the toy if you can afford it. Money is so cheap to borrow right now I hate to take it out of my investments. To each their own. Run your numbers and make the best choice for your situation.

X2. Use it now, buy it now while you can enjoy the kids or grand kids. Finance or cash, your call. But, don't let the Wall Street "experts" push your decision.
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Old 03-02-2020, 08:33 PM   #51
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If I can borrow at 4% or less I do. Exception being our home. Paid cash for it. Long term return on equities less taxes beats feeling good about being debt free. That may not work or make sense for someone else though.
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Old 03-02-2020, 08:39 PM   #52
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Ours is legally declared each year as our vacation home! The interest at the time of purchase was not a variable rather a fixed rate and less than 4%. We will still pay it off early, but have ready cash if needed! ��
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Old 03-02-2020, 10:23 PM   #53
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The new higher standard deduction makes it harder to itemize deductions. I own two homes, and still can't claim enough to exceed the standard deduction.


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Old 03-03-2020, 12:06 AM   #54
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There's wants, there's needs, and there's impulsive deeds! Never finance a toy.
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Old 03-03-2020, 01:18 AM   #55
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The new higher standard deduction makes it harder to itemize deductions. I own two homes, and still can't claim enough to exceed the standard deduction.


Mike
Yep..I have itemized my entire tax paying life until tax year 2018! Standard deduction from now on.


SALT limits and the fact we have hardly any mortgages anymore made it that way....good thing I guess!
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Old 03-03-2020, 05:13 AM   #56
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Forest Ray here.
I’ve really enjoyed reading through this entire thread myself. Very interesting mind set of some, a little crazed by others, but really “good advice” by most! I just bought my New Tow Vehicle, which is a used 2018 Chevy Tahoe LT, paid cash at CarMax about 6 weeks ago. Saved a bundled on a great tow vehicle. And that was just after buying (and I’ll finance for at least a year to get some other perks) a 2020 Rockwood 22’ TT. Instead of just paying cash for the TT, I used 5K to purchase a 14’x26’ steel car-port kit, about 4K in RV Solar Equipment. And still have $$ for the “concrete slab, site work”. Then when I can “safely withdrawal more $ next year”. I’m 67 years young, a widower, with a wild thorn in my yahoo, ready to play!
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Old 03-03-2020, 07:21 AM   #57
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Oh, one more thing: If you are still working, if you finance an RV and are NOT making maximum contributions to your IRA, 457b, whatever you have, re-think your priorities. It's disturbing to me how many of my fellow employees were living for the day, not putting anything into their deferred comp (457b) plan, or underfunding it.
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Old 03-03-2020, 09:30 AM   #58
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Iím 67 years young, a widower, with a wild thorn in my yahoo, ready to play!

Congrats on that, not easy getting to this age unscathed. I'm just a year or 2 ahead of you.


IF you have a sheltered account such as an IRA, 401k, etc. remember at age 70 1/2 you must be begin to make required minimum distributions, RMDs. There is a staggering penalty if you don't make minimum withdrawals per the government's schedule.
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Old 03-03-2020, 09:32 AM   #59
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I'm far away from 70.5. I thought new tax law upped that age.

** just looked it up, it's age 72 now.
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Old 03-03-2020, 11:51 AM   #60
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Good to know!

IRS now says "Due to changes made by the SECURE Act, if your 70th birthday is July 1, 2019 or later, you do not have to take withdrawals until you reach age 72".


My point on the RMD's which wasn't clear was when you reach RMD age, since you have to make the withdraw, you'll have more cash and it might be a good time to pay down existing debt.


I'm happy to postpone RMD's to 72.
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