PAID OFF! Celebration!

[Cobra Jet]

Hopefully, this can be a sticky thread.....But, I think a thread of folks finally paying off your S550 would be a great idea.

Congrats!

Now time to get another one so you can repeat the process and have a collection of S550’s!

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[Maggneto]

There is no better feeling than paying something off, congratulations and enjoy.

Monthly payments establish credit, and the better credit score means higher credit, and better rates so you can buy more car. The ZERO percent loan is what I went for so no hurry paying it off. That ZERO % deal is going on right now and occurs every year about this time.

 

[Rock&Roll]

Congrats thats awesome

I've got 30 payments on the Truck at 6%
and
36 more payments at the Mustang at 0%

Sucks to be me

 

[z06psi]

Does paying off the house count?

Did that in May.

 

[MyLilPony]

Car payments? What are those peasants?

Kidding, congrats. Now take your payment and start investing in bitcoin like all the other internet investor coaches tell you. Or better yet buy HMNY and pray to god they don't go bankrupt and they spike to a buck so you can retire <-- do not do this...

As for the comments on millennial's and student debt...Stop getting degrees in Liberal Arts and Turtle Appreciation...Not everyone should be going to college in the first place. It secures nothing for you in life; society has lead you in the wrong direction. You have no idea how many dumb ass MBA's I interview and have $180k in debt...they should have NEVER gone that route and I have no problem telling them it was a bad buy since their parents will not and never did do it. Degree does not = common sense.....(btw I am an on the cusp millennial)

 

[99Zeus99]

Truly amazing how quickly a reasonably fun, or any, thread gets derailed... Back to paid-off 'Stangs!

Piece of mind and true ownership are sometimes worth more than 1's and 0's on a ledger. Good for you OP! Enjoy your paid in full car for years to come

 

[IPOGT]

I must confess....I did not pay off my loan yet, working on it more quickly now that all my factory mods are completed. I just thought it would be a great idea for a sticky post for all of us.
Thanks to all for all your kind thoughts...

 

[Vegas5OH]

ive got 49 payments left at 0%

 

[Bull Run]

Do you overpay for what you want on purpose? I buy what I want AND maximize investment returns, it's not an either/or proposition.

1. No, but not wanting to borrow money for a rapidly depreciating asset that squarely falls under a "want" category doesn't mean overpaying for anything.
2. I don't have anything against getting a low-interest car loan but I wouldn't go around saying that's a smart financial decision.
3. Car dealerships and banks aren't your friends. There's no such thing as a free lunch. Studies showed that people using credit tend to overspend. "Hey just for $20 more a month, you can add this doohickey!". Usually shuts the car dealer up if I tell them that I'm shopping by OTD rather than monthly payments.
4. Your creditors don't care if the market crashed or you lost your job.
5. People tend to overestimate their risk tolerance. Saying "buy low, sell high" and "maximize returns" sounds easy, yet many people buy high during the bull market and panic sell during the crash. https://www.forbes.com/sites/rickfe...crashing-through-risk-tolerance/#5e2edd672b7f
6. I wouldn't buy investments on a margin and retail investors usually get burned taking on that much of risk. I consider borrowing money for a car and then using that cash to invest similarly in concept to buying on a margin. https://www.bankrate.com/investing/buying-on-margin-costs-risks-and-rewards/
7. I max out my 401k, IRA, and contribute to my child's 529 plan (up to the max deduction), along with 10% going to non-retirement investments, and maintain at least one-year worth of emergency savings in a savings accounts. Whatever's leftover's what I consider a discretionary fund that goes toward vacations, hobbies, helping others, extra mortgage payments, etc. Sure, my mortgage interest rate's only 3.25% at 15 years and plowing extra payments toward investments may return more than 3.25%, but saving 3.25% is a guaranteed return and there's no need for me to take the extra risk. Also mortgage interest rate deduction is overrated since you lose your standard deduction when you opt to itemize in order to take the interest rate deduction, not to mention that you don't pay that much interest on a 15-year loan. Also note that whatever interest you earn on investments are pre-tax, whereas after-tax money is used to pay for the mortgage.
8. Speaking of #7, many celebrities and athletes blew away their fortune because in shady investments they wanted to "maximize investment returns". With the amount of money they had, they couldn've parked them in conservative investments and still have a fancy lifestyle but I guess they wanted to buy what they want and instead ended up in bankruptcy.
9. So I guess I can say I buy what I want because I'm running out of mods to do and took multiple vacations this year AND seek appropriate investment returns for my risk tolerance. All of this was possible because I didn't take undue risk and got heavily into debt unlike some of my family members.

 

[sdiver68]

1. No, but not wanting to borrow money for a rapidly depreciating asset that squarely falls under a "want" category doesn't mean overpaying for anything.
2. I don't have anything against getting a low-interest car loan but I wouldn't go around saying that's a smart financial decision.
3. Car dealerships and banks aren't your friends. There's no such thing as a free lunch. Studies showed that people using credit tend to overspend. "Hey just for $20 more a month, you can add this doohickey!". Usually shuts the car dealer up if I tell them that I'm shopping by OTD rather than monthly payments.
4. Your creditors don't care if the market crashed or you lost your job.
5. People tend to overestimate their risk tolerance. Saying "buy low, sell high" and "maximize returns" sounds easy, yet many people buy high during the bull market and panic sell during the crash. https://www.forbes.com/sites/rickfe...crashing-through-risk-tolerance/#5e2edd672b7f
6. I wouldn't buy investments on a margin and retail investors usually get burned taking on that much of risk. I consider borrowing money for a car and then using that cash to invest similarly in concept to buying on a margin. https://www.bankrate.com/investing/buying-on-margin-costs-risks-and-rewards/
7. I max out my 401k, IRA, and contribute to my child's 529 plan (up to the max deduction), along with 10% going to non-retirement investments, and maintain at least one-year worth of emergency savings in a savings accounts. Whatever's leftover's what I consider a discretionary fund that goes toward vacations, hobbies, helping others, extra mortgage payments, etc. Sure, my mortgage interest rate's only 3.25% at 15 years and plowing extra payments toward investments may return more than 3.25%, but saving 3.25% is a guaranteed return and there's no need for me to take the extra risk. Also mortgage interest rate deduction is overrated since you lose your standard deduction when you opt to itemize in order to take the interest rate deduction, not to mention that you don't pay that much interest on a 15-year loan. Also note that whatever interest you earn on investments are pre-tax, whereas after-tax money is used to pay for the mortgage.
8. Speaking of #7, many celebrities and athletes blew away their fortune because in shady investments they wanted to "maximize investment returns". With the amount of money they had, they couldn've parked them in conservative investments and still have a fancy lifestyle but I guess they wanted to buy what they want and instead ended up in bankruptcy.
9. So I guess I can say I buy what I want because I'm running out of mods to do and took multiple vacations this year AND seek appropriate investment returns for my risk tolerance. All of this was possible because I didn't take undue risk and got heavily into debt unlike some of my family members.

1) "Borrowing money for a rapidly depreciating asset" is an old (and false) wives tale. The ONLY objective is to minimize TCO for whatever "basket of goods" you determine for yourself and your goals.
2) Yes it is. The problem is you have to be smart.
3) It's called discipline, again if you know what you are doing you won't get taken.
4) Better have 6-12 months of living expenses saved, along with a plan B.
5) True, doesn't mean it's smart
6) True
7) Yes on the matching portion of the 401k. Then, Roth if you aren't income disqualified. I generally agree with your plan. In your mortgage example 3.25% is risk free return, better than you can get from "risk free" investments. I was very careful to say 0-2% in my original statement. Even then, over 15 years with the market returning 7% on average and much more than that lately...but now you are getting into individual preference for risk tolerance, age, income...many other factors.
8) Yep, sucks to be them. Again, doesn't mean it was smart.
9) Based on 1-8, sounds like YOU have educated yourself in finance and/or surrounded yourself with good advisors enough to make smart decisions. You probably even have many shares of VOO (or similar) in your portfolio.

 

[GDDYP]

Congrats, a paid off car is a wonderful thing! As a serial car buyer it's not a position I frequently find myself in, LOL, and I'm getting ready to start a loan all over again in about 23 days when my on-order 2019 arrives.

 

[Bull Run]

1) "Borrowing money for a rapidly depreciating asset" is an old (and false) wives tale. The ONLY objective is to minimize TCO for whatever "basket of goods" you determine for yourself and your goals.
2) Yes it is. The problem is you have to be smart.
3) It's called discipline, again if you know what you are doing you won't get taken.
4) Better have 6-12 months of living expenses saved, along with a plan B.
5) True, doesn't mean it's smart
6) True
7) Yes on the matching portion of the 401k. Then, Roth if you aren't income disqualified. I generally agree with your plan. In your mortgage example 3.25% is risk free return, better than you can get from "risk free" investments. I was very careful to say 0-2% in my original statement. Even then, over 15 years with the market returning 7% on average and much more than that lately...but now you are getting into individual preference for risk tolerance, age, income...many other factors.
8) Yep, sucks to be them. Again, doesn't mean it was smart.
9) Based on 1-8, sounds like YOU have educated yourself in finance and/or surrounded yourself with good advisors enough to make smart decisions. You probably even have many shares of VOO (or similar) in your portfolio.

Now I'm seeing the angle that you're coming from. I believe what you're doing works for you because you have the risk tolerance and knowledge to pull it off. It's hard to expect an average member of the public or this forum to have the same traits as you. I and others would've been fine with your disagreement had you explained yourself on your initial post like you did here because just a one-liner sounds like you were raining on his parade.

I'm not surrounded by good advisors but rather learned from some of my mistakes and even greater mistakes from the ones around me. It was a few years after I finished my undergraduate degree (which itself took longer due to a family tragedy) when the crash of 2008 happened. I didn't have large investments back then but it was still quite unnerving taking around 50% hit only after a few days/weeks of panic selling by the general public. I had a small house that also had its price plummeted, but the balances on the mortgage and student loan sure didn't go down with the market. I consider myself lucky as I attended a cheap state college so the amount of student loan was reasonable and that house was my primary residence so I didn't have to worry about renters bailing out. I held firm and the house and investments eventually recovered and then gained on top of the recovery. I was able to sell the house later for a small profit when I moved out of state for another job. I eventually became income disqualified for Roth but learned about the backdoor method. My wife quit her job to become a full-time mom so we are still able to avoid the backdoor method for her IRA.

Others that I knew weren't as lucky as many of them were heavily invested in the real estate. It was easy enough to tap into the equality as a leverage to buy more houses while the house prices were going up like crazy, but when the market crashed, they weren't able to sell them or get enough rent from them when the mortgages came due. And homeowner relief programs only covered primary residences, not investment properties. So then came the foreclosures, bankruptcies, and in some cases, divorces.

So this shaped my risk tolerance. I know I have enough tolerance to hold firm when the next crash comes, but I'm not willing to use the leverage of any kind for investments. I'm currently an index funds investor for both stocks and bonds which I rebalance on yearly basis. Only individual company shares I own right now are for my current employer, only because I got them as a part of the signing bonus and ongoing retention bonuses. I sell some of them from time to time, but I basically consider them as "free money" and don't count them toward my retirement goals. I'm hoping to pay off the mortgage in a couple of years and only then I'll use the freed up cash flow to buy individual stocks and other forms of riskier investments. Sure, I'm still decades away from the traditional retirement age and can handle additional risk, but I believe, and all the benchmarks show, that I'll be able to retire early with plenty of funds for entertainment if I stay the current course.

EDIT: I remembered another non-investment reason for me hating to take extra risks. I was deployed to Afghanistan as an Engineer officer (I was in the Army Reserve) in an Engineer company. Our main job was to support an Infantry battalion during the surge. After training up with an Afghan kandak (battalion) for a couple of months, the battalion commander wanted us to plow through various obstacles to make a road through Sangsar (birthplace of Taliban) down to the Arghandab river. We warned the commander that, aside from the questionable quality of Afghan soldiers, there wasn't enough manpower to adequately patrol the road once it's built. He didn't listen to our advice as he was willing to take the risk to quickly seize the objective rather than wait for additional resources.

So we did what we were told. The Taliban quickly found gaps in coverage and started peppering our convoys and planting IEDs. Aside from our equipment returning from missions with bullet holes (only the cab is armored), one of my platoon leaders hit an IED along with a fuel tanker. Fortunately, she was in an MRAP so while the IED blew off one of the front wheels, the cab stayed intact and she and her crew were unharmed other than being shaken up. The fuel tanker also survived because that IED had a partial detonation and only burned off some paint. Some of the infantrymen weren't so lucky and they hit an IED while dismounted, which killed a staff sergeant and a couple of privates. I attended their field memorial. Privates were young kids maybe 18 or 19 olds in age, while the staff sergeant was older and had a wife and kids.

Sure, Sangsar and a portion of the river was secured in a record time. Units involved were awarded the Valorous Unit Award (equivalent to a Silver Star for a unit) and most of the offers and senior NCOs involved in the campaign were awarded Bronze Star Medals. Dead Soldiers were awarded BSMs as well but I'm pretty sure their families rather have their Soldiers alive than BSMs.

This is why I'm firmly against undue risks, even for non-combat related events. I feel that large amounts of luck are required in order for highly risky endeavors to succeed and I believe luck played a large factor in additional Soldiers not being killed that day.

 

[nrc]

I don't mind having some low interest debt. I try to make sure that between a large down payment and limited finance term our cars have positive equity for the duration of the loan.

 

[Bull Run]

Car payments? What are those peasants?

Kidding, congrats. Now take your payment and start investing in bitcoin like all the other internet investor coaches tell you. Or better yet buy HMNY and pray to god they don't go bankrupt and they spike to a buck so you can retire <-- do not do this...

As for the comments on millennial's and student debt...Stop getting degrees in Liberal Arts and Turtle Appreciation...Not everyone should be going to college in the first place. It secures nothing for you in life; society has lead you in the wrong direction. You have no idea how many dumb ass MBA's I interview and have $180k in debt...they should have NEVER gone that route and I have no problem telling them it was a bad buy since their parents will not and never did do it. Degree does not = common sense.....(btw I am an on the cusp millennial)

This reminds me of an article that I read about a couple who amassed a very large amount of student loan (I think it was $300K) and complaining they weren't able to pay it off. No, it wasn't for medical degrees, it was for a couple of Masters of Social Work degree at a very expensive private university (I think that was Boston University but I can't seem to find the article now). My wife has MSW and she can tell you that social work doesn't pay much and it always have been that way. Fortunately, she was wise enough to attend a state college instead.

 

[nrc]

This reminds me of an article that I read about a couple who amassed a very large amount of student loan (I think it was $300K) and complaining they weren't able to pay it off. No, it wasn't for medical degrees, it was for a couple of Masters of Social Work degree at a very expensive private university (I think that was Boston University but I can't seem to find the article now). My wife has MSW and she can tell you that social work doesn't pay much and it always have been that way. Fortunately, she was wise enough to attend a state college instead.

Right. Student debt spent wisely is an excellent investment that will pay for itself in higher wages many times over. The problem is that ease of access to financing and student aid along with deferred repayment have made it too easy to spend that money stupidly. "Follow your passion" is the bad advice that too many kids are getting and access to financing is making it easy for them to stupidly follow that advice.

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