Posted by Bill on July 8, 2006, 1:53 am
> Bill wrote:
>> I've made car payments my entire life and have paid cash for every car
>> I've
>> owned. I made those payments to myself, of course, so every now and then
>> a
>> car was free. Do the math.
> Ditto. Though I borrowed money from a CU for my /first/ new car 36
> years ago. I also had to borrow a bit from myself last year when I
> bought my Avalon because I was not due for a new car for another couple
> of years, and because the top-end Avalon cost more than I had expected
> to spend (worth every penny.) My 12-year-old Accord did not know that
> it was not due for replacement, however, and it became problematical.
> For my Prius I borrowed from myself again, because the purchase was
> waaay out-of-cycle (whimsy) but it was a relatively small loan and I
> was able to pay myself off quickly.
> This system does not require wealth (as my example shows!) but it
> requires discipline. I make payments to my accounts as strictly as I
> would if a bank was threatening to send the repo man. I have not yet
> had to repossess one of my own cars...
> Davoud
Great! Yep, all one has to do is postpone the purchase of that first car
and make every payment to themselves faithfully thereafter. It's not that
easy with a house, of course, but I only borrowed money against the first
one, invested some energy, made a nice profit and paid cash for every one
after that.
Posted by Cathy F. on July 8, 2006, 2:40 am
>> Bill wrote:
>>> I've made car payments my entire life and have paid cash for every car
>>> I've
>>> owned. I made those payments to myself, of course, so every now and
>>> then a
>>> car was free. Do the math.
>>
>> Ditto. Though I borrowed money from a CU for my /first/ new car 36
>> years ago. I also had to borrow a bit from myself last year when I
>> bought my Avalon because I was not due for a new car for another couple
>> of years, and because the top-end Avalon cost more than I had expected
>> to spend (worth every penny.) My 12-year-old Accord did not know that
>> it was not due for replacement, however, and it became problematical.
>>
>> For my Prius I borrowed from myself again, because the purchase was
>> waaay out-of-cycle (whimsy) but it was a relatively small loan and I
>> was able to pay myself off quickly.
>>
>> This system does not require wealth (as my example shows!) but it
>> requires discipline. I make payments to my accounts as strictly as I
>> would if a bank was threatening to send the repo man. I have not yet
>> had to repossess one of my own cars...
>>
>> Davoud
>>
> Great! Yep, all one has to do is postpone the purchase of that first car
> and make every payment to themselves faithfully thereafter. It's not that
> easy with a house, of course, but I only borrowed money against the first
> one, invested some energy, made a nice profit and paid cash for every one
> after that.
I understand the wisdom & workings of this - but.... how does one postpone
the purchase of a first car? If living in a metropolitan area that has good
public transport, yes, possible. But otherwise... ?
When I read the first post, re: having had no car loans & saving faithfully
for each car, I thought: "Okay, but how about the very first one - there's a
huge sticking point." Starting out w/job & making small salary, maybe
paying off student loans.... an accomplishment to pay the rent, groceries, &
utilities - no available lump sum big enough to purchase a car sans a loan.
Cathy
>
Posted by Michael Pardee on July 8, 2006, 3:41 am
> I understand the wisdom & workings of this - but.... how does one postpone
> the purchase of a first car? If living in a metropolitan area that has
> good public transport, yes, possible. But otherwise... ?
> When I read the first post, re: having had no car loans & saving
> faithfully for each car, I thought: "Okay, but how about the very first
> one - there's a huge sticking point." Starting out w/job & making small
> salary, maybe paying off student loans.... an accomplishment to pay the
> rent, groceries, & utilities - no available lump sum big enough to
> purchase a car sans a loan.
> Cathy
We went through a long period when the tax man thought we were rich but we
could barely afford to feed our family - $5 for a month's groceries for a
family of 4 is tough. There is no way to go through a period like that with
the "pay yourself" plan - we couldn't afford to operate a car, much less
make payments. We had been married ten years before we made car payments at
all.
Mike
Posted by Bill on July 8, 2006, 3:59 am
>>
>> I understand the wisdom & workings of this - but.... how does one
>> postpone the purchase of a first car? If living in a metropolitan area
>> that has good public transport, yes, possible. But otherwise... ?
>>
>> When I read the first post, re: having had no car loans & saving
>> faithfully for each car, I thought: "Okay, but how about the very first
>> one - there's a huge sticking point." Starting out w/job & making small
>> salary, maybe paying off student loans.... an accomplishment to pay the
>> rent, groceries, & utilities - no available lump sum big enough to
>> purchase a car sans a loan.
>>
>> Cathy
>>
> We went through a long period when the tax man thought we were rich but we
> could barely afford to feed our family - $5 for a month's groceries for a
> family of 4 is tough. There is no way to go through a period like that
> with the "pay yourself" plan - we couldn't afford to operate a car, much
> less make payments. We had been married ten years before we made car
> payments at all.
> Mike
For me it was a combination of life choices. Enlisting in the military made
a car unnecessary while saving money. The subsequent college years were the
toughest financially but postponing marriage and children got me through
that.
Posted by Michael Pardee on July 8, 2006, 4:08 am
>> We went through a long period when the tax man thought we were rich but
>> we could barely afford to feed our family - $5 for a month's groceries
>> for a family of 4 is tough. There is no way to go through a period like
>> that with the "pay yourself" plan - we couldn't afford to operate a car,
>> much less make payments. We had been married ten years before we made car
>> payments at all.
>>
>> Mike
> For me it was a combination of life choices. Enlisting in the military
> made a car unnecessary while saving money. The subsequent college years
> were the toughest financially but postponing marriage and children got me
> through that.
I don't think there was ever a time we would have been ready for our first
child. He had a constellation of medical problems, but the asthma was the
most troublesome. The out-of-pocket expenses consumed a quarter of our gross
income (more than our house payment and food budget combined; only taxes
were a bigger part of our expenses) until I got a second job and changed my
first to a better paying job. When he was 12 he spent 5 months in a hospital
in Denver, and seeing the bill with my name at the top and $00K at the
bottom was an unpleasant experience. Paul Harvey quotes somebody whose name
I didn't recognize: "Having children makes us all hostages to Fate."
Mike
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>> I've made car payments my entire life and have paid cash for every car
>> I've
>> owned. I made those payments to myself, of course, so every now and then
>> a
>> car was free. Do the math.
> Ditto. Though I borrowed money from a CU for my /first/ new car 36
> years ago. I also had to borrow a bit from myself last year when I
> bought my Avalon because I was not due for a new car for another couple
> of years, and because the top-end Avalon cost more than I had expected
> to spend (worth every penny.) My 12-year-old Accord did not know that
> it was not due for replacement, however, and it became problematical.
> For my Prius I borrowed from myself again, because the purchase was
> waaay out-of-cycle (whimsy) but it was a relatively small loan and I
> was able to pay myself off quickly.
> This system does not require wealth (as my example shows!) but it
> requires discipline. I make payments to my accounts as strictly as I
> would if a bank was threatening to send the repo man. I have not yet
> had to repossess one of my own cars...
> Davoud