Boat loan – what are you thinking?

Guys keep it clean please...I don't have Richard anymore to tell me it is ok to close a thread, but this one does not seem to be heading in the right direction. :wink:

where did I put that bullet...

Wesley
 
Presentation: Owning a boat, whether one pays cash or finances, is expensive. Keeping in mind that many of your readers may not have lots of cash available, what practical advice do you have for offsetting the cost of boat ownership? For example, do you advocate using a credit card to purchase food & supplies (the cash reward can be used to pay for fuel or save for a future boat)? Sea Ray Owners Club points?
 
For us, it's tax deductibility. At 6.5%, I'm very happy with my second home. Great that you payed cash, or don't have a loan,but my wife and I are self-employed, so I'll take whatever government subsidy I can find :grin:
 
An example:

If you took 100k and received a 10% return for 10 years, you would have $259,000 at the end of that time. This is a reasonable rate of return with a well balanced portfolio.

If you paid cash for the boat (100k), sold it in 10 years for 50k, you would walk away with 50k in your pocket.

If you invested the 100k, got a 10% return, but took the boat payments out of that money (100k at 6% is about $800/month) you would have about 83k of your money left after 10 years. If you sold the boat for 50k, you would owe approximately 67k on your loan. So you are gaining 17k. (83k left on your own money - 67k owed - 17k left). You come out ahead with someone elses money.

If you can write off the interest, and your effective interest rate is 4%, then your would owe 60k after 10 years on your boat loan and would come out ahead by 23k.

Of course, if you keep your boat for a different length of time, it changes the numbers. I just chose resale value at random. Any sort of numbers that you use will show that you are ahead by using the invest the money/pay the boat by a loan theory, as long as the interest rates are reasonable.

The gist is that it makes more sense to use someone elses money. That's why it would make sense to get a boat loan.
 
If I paid cash for everything I have, I basically wouldn't have anything:

1 Home Loan
2 Car Loans
1 Boat Loan
1 Business Loan
Credit cards

Would I be happy if I owed no one any money HECK YEA who wouldn't.

I work hard for what I have, I had very very little as a kid so yea I owe alot of people money and if something were to happen where I couldn't work anymore yea it would suck really bad and I'd probably have to sell alot of the stuff I have to get rid of the loans but that's life and I'm pretty happy with the way things are sure like I said it would be nice to pay some of those things off (1 car is actually almost paid off)

Also I don't pay minimums on anything I usually try to pay double whatever is due as long finances allow it. That way things get paid off quicker and if they need replacing then they get replaced if not that money is free to either pay on other loans or buy some new toy like a LARGER boat.

Anyways I've said my piece everyones situation is different and I hope everyone is happy with the way things are even if it's tight sometimes you have your health and happyness and all the other stuff will work itself out.
 
ylwjacket said:
i had a long response, but it boils down to this:

this is a pointless thread.
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I agree and don't need to justify what I believe is ME as Pres' Subject in this conversation.
Sorry to Disappoint you Pres, but yes I'll need a loan to buy a boat.'
Oh yeah and "What was I thinking" was the question?
My best answer is I love to go Boating. :cool:
 
I financed my boat. I dont see anything wrong with a loan as long as you are positively sure that you are able to afford it. I dont have a car loan, home loan, or credit cards. Things I pay for are taxes, house bills, food, etc and of course, my boat! :grin:
 
wow! there sure is alot of money math in this thread. i have a boat, I can afford it, and I sure as hell enjoy it, anything else really matter? :huh:
 
I'm 21. My parents gave me a fantastic childhood but also made me work for things so I had an appriciation of money and respected it. That being said I've always had nice things and since I made damn good money for my age (22) I'll have nice things. I financed my boat for 6 years at 7% interest. I paid cash for my jetski, but got rid of that now that the fiance and her son are here. I boated with my Grandpa and uncles when I was a kid and sure wish my parents had a boat. For the money I pay in interest to have my boat now instead of in a few years for my boy is priceless. I wanted a brand new one but couldn't justify loosing that much in depriciation in a few years so I did the FINANCIAL RESPONSIBLE thing and bought used. Much of this country isn't like me though and are living off their credit cards. I pay mine off in full every month and my bonus checks go right into savings and will pay for an even brighter tomorrow!

Oh FYI--I'd pay millions in interest to keep giving my boy the memories the boat does....
 

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people, people, people.

sometimes you have to learn when to walk away. that happened in this thread after the first post.

this water's deep - don't fall in.

just move along, and go back to why we all came here in the first place.
 
Presentation said:
At 40 we have everything paid off. The various tax-incentive retirement programs have been maxed out for more then a decade and a half. My wife and I paid our own way thru college yet all three of our kids have a college savings plan in place financed by us. Then with the money left over we go on vacations, buy boats and have fun. I never considered taking out a loan for our boat.
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Well, good for you. :smt038
 
ylwjacket said:
people, people, people.

sometimes you have to learn when to walk away. that happened in this thread after the first post.

this water's deep - don't fall in.

just move along, and go back to why we all came here in the first place.
Click to expand...

I *REALLY* wan't to respond to the original posters dime-store financial advice... PLEASE??!! JUST ONE REPLY?!!
 
Reply Gary REPLY!!! Even if it's just in a PM to me!
 
So why is this such a dangerous thread? Aside from some political BASHING in the middle of page 1, I think this is interesting and valid topic.

I had a pretty decent job, but no boat in the visible future. Lost the job, started a business which is going very very well. Now I can swing a boat, I thought, but how much do I buy? Pay cash for a modest boat? Get a loan for something really nice? I could swing either. I'm sure people that come into a little bit of $ through inheritance, lottery, or other good luck come to the same quandry (hence, this is a good thread).

Someone made the very valid point earlier- who would want a big boat payment on top of fuel, maintenance, slip fees, etc? I opted for the modest boat ($22K) in cash.

I thought the earlier post about borrowing money to invest it was not sound thinking. A 10% market return is not guaranteed, you're lucky to get anything close these days. Imagine if you had borrowed to invest in the market six years ago only to end up with $40K in stocks and a $100,000 loan (and a boat loan!). I used margin for trading in the 1990s and got seriously burned. The market is so arbitrary these days- you can buy stock in a good, well-run company, and watch your stock get dragged down because some analyst sees another poorly run company in the same industry go down.

But I'm getting off-topic. I would vote that, unless you're living on it, you should be able to pay cash for at least 50% of the boat's value.
 
Sorry for going off topic but has anyone noticed how much you can discover about a person just by looking at their avatar(picture) :wink: Anyway... my boat, my money, my business.
 
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