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Deciding between two boats, G3 185 VF and Alumacraft 185 Trophy
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<blockquote data-quote="MrGiggles" data-source="post: 506249" data-attributes="member: 22613"><p>Most financial advice would say buying any sort of toy on credit is a bad choice. There is some truth in that, you're paying interest to borrow on a depreciating asset, getting shafted both ways essentially. Add in a high interest rate and you can be upside down pretty quickly, especially if the economy slows and prices fall, owing way more than it's worth. </p><p></p><p>That said, a life lived without a toy here and there isn't one worth living IMO. Some people like to have a warranty and can afford the depreciation, and if someone isn't buying new stuff, there would never be a used market. There are a lot of guys that will buy new, sell when the depreciation is in the sweet spot and upgrade. When you break that method down to a monthly cost to own a brand new boat/truck/motorcycle, it's often not so bad and offers a lot more flexibility than a lease.</p><p></p><p>Debt is not always a bad thing either. Guys with deep pockets still borrow money, the interest on most loans is often far less than investing it, so it still comes out as a net positive for them. Borrow money, and stick their cash in an ETF to earn 11% every year. It becomes a problem if you are over leveraged and there is no cushion for hardships like job loss, illness, etc., that is where debt to income comes into play.</p></blockquote><p></p>
[QUOTE="MrGiggles, post: 506249, member: 22613"] Most financial advice would say buying any sort of toy on credit is a bad choice. There is some truth in that, you're paying interest to borrow on a depreciating asset, getting shafted both ways essentially. Add in a high interest rate and you can be upside down pretty quickly, especially if the economy slows and prices fall, owing way more than it's worth. That said, a life lived without a toy here and there isn't one worth living IMO. Some people like to have a warranty and can afford the depreciation, and if someone isn't buying new stuff, there would never be a used market. There are a lot of guys that will buy new, sell when the depreciation is in the sweet spot and upgrade. When you break that method down to a monthly cost to own a brand new boat/truck/motorcycle, it's often not so bad and offers a lot more flexibility than a lease. Debt is not always a bad thing either. Guys with deep pockets still borrow money, the interest on most loans is often far less than investing it, so it still comes out as a net positive for them. Borrow money, and stick their cash in an ETF to earn 11% every year. It becomes a problem if you are over leveraged and there is no cushion for hardships like job loss, illness, etc., that is where debt to income comes into play. [/QUOTE]
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Boat House
Deciding between two boats, G3 185 VF and Alumacraft 185 Trophy
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