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#8670387 - 05/25/16 11:00 AM How broken is my thinking? (finance/debt related)
SuPeR-MaRiO Offline
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Registered: 06/28/01
Posts: 6111
Loc: Toronto, Ontario
Am I broken for not wanting to spend my savings when making a big purchase (ie over a couple thousand dollars)? For example, last year I bought a car (private sale) and could have paid it off using my savings. Additionally I did a small reno and again I opted to not dip into my savings but rather finance the project.

I should add that I will only do this if financing is low. For example, I took advantage of a 15 month 0.99% balance transfer promo. I'd be willing to go up to about 3% or so but anything above that I feel the interest isn't worth it. Additionally I make hefty payments each month and don't plan on taking forever to pay it off.

Anyone else share this mentality?

On the topic of renewing mortgages (since several are in the same boat) would it be better to just roll it into the mortgage or keep renewing the promo every 12-15 months and make separate payments?? The car and reno total low $20k. Outside of that, no other debt.

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#8670394 - 05/25/16 11:02 AM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
Euphoricuck Offline
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Registered: 11/05/03
Posts: 92703
Loc: Canadistan
I agree with your thinking. And have taken part myself.
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#8670396 - 05/25/16 11:03 AM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
Senor Eduardo_82 Offline
miataist
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Registered: 01/09/03
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Loc: Ca�ada
It's good for your credit rating, and if you're making more interest on your savings than you are paying the debt, you're still ahead.

The question is what are you planning to spend your savings on?

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#8670400 - 05/25/16 11:04 AM Re: How broken is my thinking? (finance/debt related) [Re: Senor Eduardo_82]
SuPeR-MaRiO Offline
Post Master Sr


Registered: 06/28/01
Posts: 6111
Loc: Toronto, Ontario
 Originally Posted By: eddie_82
The question is what are you planning to spend your savings on?

I will most likely take it with me when I die

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#8670408 - 05/25/16 11:08 AM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
Senor Eduardo_82 Offline
miataist
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Registered: 01/09/03
Posts: 38036
Loc: Ca�ada
GOD DAMMIT, THE ANSWER IS ALWAYS MIATA

HAVE I TAUGHT YOU PEOPLE NOTHING!?!?!?

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#8670419 - 05/25/16 11:16 AM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
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Nothing wrong with your thinking, it's your preference. Sure on paper with financing you might be paying a couple hundred bucks in interest/fees, but not something worth sweating over.

I also hate dipping into savings, but that's my preferred method. I don't recommend it to everyone because once you take out 10k from a liquid savings account (floating balance of 30k-50k as an example), it's less motivating to keep saving as you have to work back up to a balance you already had. So IMO for most people you are better off financing it at a small cost, which really is bypassing the discouragement you might have when starting to save all over. Not saving because discouraged/whatever is a lot more expensive than a few bucks in interest. That's generally what I've noticed from personal experience, personal finances are a lot of times more of a mental play than dollars and cents.

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#8670451 - 05/25/16 11:37 AM Re: How broken is my thinking? (finance/debt related) [Re: Risky Business]
OracerO Offline
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Registered: 10/07/02
Posts: 3949
Loc: GTA
 Originally Posted By: Risky Business
Nothing wrong with your thinking, it's your preference. Sure on paper with financing you might be paying a couple hundred bucks in interest/fees, but not something worth sweating over.
I also hate dipping into savings, but that's my preferred method. I don't recommend it to everyone because once you take out 10k from a liquid savings account (floating balance of 30k-50k as an example), it's less motivating to keep saving as you have to work back up to a balance you already had. So IMO for most people you are better off financing it at a small cost, which really is bypassing the discouragement you might have when starting to save all over. Not saving because discouraged/whatever is a lot more expensive than a few bucks in interest. That's generally what I've noticed from personal experience, personal finances are a lot of times more of a mental play than dollars and cents.


+1.

It really depends on the situation.

Back in 2012 I ran into a sour business deal (dealing with the chinese grimy business fucks) that had me and my partners owing about 120k Cad each.

Needless to say i had to put about 36k on my LOC and 3 CC's (one of the CC's was a zero % interest balance transfer, it still sucked). I was drained.

from 2012 - 2015, i was borderline depression and had to go back into the workforce. For 3 years i only made 10-20% over minimum on my monthly payments. For 2.5years my debt stayed 36k (paying a monthly amount of $900 for 30months = 27k in interest, I basically paid to stall time).

Now i've been debt mofo free for a few months and my attitude has changed to paying everything off if i can. NO matter how low the interest rate is and how low my savings account might look, its better knowing that i dont have a monthly debt payment, other than a mortgage. It's also a relief knowing that everything you earn, you bank it.

F even paying $1 to an institution. I"m a cheap f now, save and pinch as much a i can.


Edited by OracerO (05/25/16 11:41 AM)

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#8670469 - 05/25/16 11:46 AM Re: How broken is my thinking? (finance/debt related) [Re: OracerO]
SuPeR-MaRiO Offline
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Registered: 06/28/01
Posts: 6111
Loc: Toronto, Ontario
^ Thanks for sharing and sorry to hear about your experience. It's interesting to see how that experience lead to your current mentality. I had an experience about 11-12 years ago where I too ran into a sour business deal and lost a lot of my savings. I think as a result of that experience I am less inclined to dip into my savings.
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#8670494 - 05/25/16 11:54 AM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
OracerO Offline
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Registered: 10/07/02
Posts: 3949
Loc: GTA
^ I feel like "savings" is such a subjective topic.
What is savings? When do you use it?
What is the benchmark for how much you should keep?
Should we even keep 20-50k of liquid savings in an account? for a rainy day? Earning, well not really earning anything?
Why not have the LOC for Emergency and have your savings in investments, the LOC can help for that month till you pull out of the investments to pay for things?

Really, how much should we have sitting static in a savings account?

I do get where the psychology of not touching the savings account comes from. Theoretically it is smarter to use someone else's money to pay for things at a small interest rate, having good money management. But is it? I don't know.

What happened to when we were young and CC's didn't come into play. You just saved up till you have the cash to make the purchase. Why not carry this forward to our adult hood? Obviously don't drop 100% of your savings to do something.


Edited by OracerO (05/25/16 12:00 PM)

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#8670495 - 05/25/16 11:55 AM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
Risky Business Offline
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If it makes you all feel better I've been getting those mbna 0% cards and investing them in the stock market for the term of the loan. Because of when my last card renewed early 2015 and the promo ended March 2016 (when the markets took a bit of a shit) I took a bit of a bath on that lol

Actually shitty 6 months in the markets for me but that's another topic.

I wanna know about Chinese ppl and how they saddle you with 120k debt

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#8670501 - 05/25/16 11:56 AM Re: How broken is my thinking? (finance/debt related) [Re: OracerO]
Risky Business Offline
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Registered: 05/17/10
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 Originally Posted By: OracerO
^ I feel like "savings" is such a subjective topic.
What is savings? When do you use it?
What is the benchmark for how much you should keep?
Should we even keep 20-50k of liquid savings in an account? for a rainy day? Earning, well not really earning anything?
Why not have the LOC for Emergency and have your savings in investments, the LOC can help for that month till you pull out of the investments to pay for things?

Really, how much should we have sitting static in a savings account?


Probably nothing is the right answer. I personally like some money, but then with line of credit it's pretty redundant.

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#8670519 - 05/25/16 12:02 PM Re: How broken is my thinking? (finance/debt related) [Re: Risky Business]
OracerO Offline
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Registered: 10/07/02
Posts: 3949
Loc: GTA
 Originally Posted By: Risky Business
If it makes you all feel better I've been getting those mbna 0% cards and investing them in the stock market for the term of the loan. Because of when my last card renewed early 2015 and the promo ended March 2016 (when the markets took a bit of a shit) I took a bit of a bath on that lol
Actually shitty 6 months in the markets for me but that's another topic.
I wanna know about Chinese ppl and how they saddle you with 120k debt


back in 2008-09 i used an MBNA 0% card to invest. Killed it.

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#8670526 - 05/25/16 12:05 PM Re: How broken is my thinking? (finance/debt related) [Re: OracerO]
Risky Business Offline
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I've been doing that for I think 7 cards back to back
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#8670528 - 05/25/16 12:06 PM Re: How broken is my thinking? (finance/debt related) [Re: Risky Business]
OracerO Offline
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Registered: 10/07/02
Posts: 3949
Loc: GTA
 Originally Posted By: Risky Business

I wanna know about Chinese ppl and how they saddle you with 120k debt


Honestly, i'm an open book i would share with you guys my life story on my business travels into Asia from 2010-2012. I would do this over a beer though, not on the web. The story can and will go off on tangents, as i've experienced almost everything except being in a war.

I won't lie, Clubsi - Ont held me down for when i was over there alone. No joke, reading first world problems.

I would do it again in a heartbeat.


Edited by OracerO (05/25/16 12:08 PM)

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#8670541 - 05/25/16 12:11 PM Re: How broken is my thinking? (finance/debt related) [Re: OracerO]
Euphoricuck Offline
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Registered: 11/05/03
Posts: 92703
Loc: Canadistan
This last year and a bit did shit all with the market fak
_________________________

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#8670553 - 05/25/16 12:18 PM Re: How broken is my thinking? (finance/debt related) [Re: Euphoricuck]
The Postman Offline
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Registered: 02/13/02
Posts: 4973
Kid I work with just bought a new F150 cash. Im pretty sure they have some close to zero % financing rate.

Ive noticed this alot with the younger guys I work with. Is it some baller status thing that they think its cool to drop that much cash for something.

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#8670566 - 05/25/16 12:24 PM Re: How broken is my thinking? (finance/debt related) [Re: The Postman]
SuPeR-MaRiO Offline
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Registered: 06/28/01
Posts: 6111
Loc: Toronto, Ontario
MBNA cards with 0% or 0.99% always come with a 1% upfront fee. I think I've heard that they're upping that fee to 2% now.
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#8670572 - 05/25/16 12:27 PM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
OracerO Offline
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Registered: 10/07/02
Posts: 3949
Loc: GTA
 Originally Posted By: SuPeR-MaRiO
MBNA cards with 0% or 0.99% always come with a 1% upfront fee. I think I've heard that they're upping that fee to 2% now.


I"ve never had an upfront fee.

i dont have one any longer, i forgot how it worked.
0% balance transfer for a year. As long as you pay it off you can call in and renew that offer, yearly.

If you miss one payment, that's when you're f'd. They tack on all fees, plus all the interest from the months before and activate the 21% monthly interest.

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#8670579 - 05/25/16 12:33 PM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
SW20_MR2 Offline
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Registered: 08/27/01
Posts: 5282
Loc: Markham, Ontario, Canada
I am fairly conservative when it comes to finance. If I was in the position, I'd think about whether I could earn more money by investing it. I'm not an active trader, so I'm more comparing it to high interest savings accounts as opposed to stocks. In your case, I'd finance it because 0.99% of after tax dollars would equate to earning 1.5-2% somewhere else, which is doable with investments. Any more than that, I'd use savings.

I like to keep a decent amount of money handy though in savings accounts. I'd consider these to be rainy day and maintenance funds though as opposed to savings. We just did our roof, and windows will be next year. We have true savings in investment accounts, which we never touch. Any other excess money gets put into the mortgage.
_________________________
1991 MR2 Turbo aka "The Myth"...does it really exist?
2006 Mazda3 Sport aka "Reality"...it really does exist...

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#8670582 - 05/25/16 12:35 PM Re: How broken is my thinking? (finance/debt related) [Re: OracerO]
SiZ Offline
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Registered: 09/15/00
Posts: 8774
Loc: Longdon, Ontario
I'm a pay for it all, owe nothing guy. My savings isn't my investments, which is how I look at it.. Last time I was in the bank for something my banker suggested a different kind of savings account for me that will give me a higher interest rate, but I told him my savings comes and goes.

Right now, its high, I'm saving for a boat.
When I get a boat, it will be empty.
Then I'll save it up more to get a newer car.
Then it will be empty again. \:\)

To me, savings and investments are two completely different things, and I'm not worried about whats in my savings account, I want my money owed to be at $0.
_________________________
Makes cents.

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#8670588 - 05/25/16 12:37 PM Re: How broken is my thinking? (finance/debt related) [Re: OracerO]
Euphoricuck Offline
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Registered: 11/05/03
Posts: 92703
Loc: Canadistan
It's been 1% fee on balance transfers since forever
_________________________

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#8670591 - 05/25/16 12:39 PM Re: How broken is my thinking? (finance/debt related) [Re: OracerO]
SuPeR-MaRiO Offline
Post Master Sr


Registered: 06/28/01
Posts: 6111
Loc: Toronto, Ontario
 Originally Posted By: OracerO
 Originally Posted By: SuPeR-MaRiO
MBNA cards with 0% or 0.99% always come with a 1% upfront fee. I think I've heard that they're upping that fee to 2% now.

I"ve never had an upfront fee.
i dont have one any longer, i forgot how it worked.
0% balance transfer for a year. As long as you pay it off you can call in and renew that offer, yearly.
If you miss one payment, that's when you're f'd. They tack on all fees, plus all the interest from the months before and activate the 21% monthly interest.

I've tried to negotiate waiving the fee but they wont budge. Yes if you miss a payment you lose the promo. When your promo ends you can't just call to renew. You have to pay off the remaining balance, and then apply for another promo.

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#8670618 - 05/25/16 12:48 PM Re: How broken is my thinking? (finance/debt related) [Re: SiZ]
SuPeR-MaRiO Offline
Post Master Sr


Registered: 06/28/01
Posts: 6111
Loc: Toronto, Ontario
 Originally Posted By: SiZ
To me, savings and investments are two completely different things,

Thats a good way to look at it.

Investments is something I would really like to get more involved in (minimal at the moment). I just don't know shit about investing or markets or anything.

The only thing I do know is that people are so anal with their investments. And I get it, people are more reserved about their money than they are about religion. But even without disclosing dollar amounts its as if people don't want others to prosper/benefit. At my age (late thirties) I feel like I am so far behind and that I should have taken the plunge years ago.

Tips on Investing for N00bs? Risky, wanna hold a CSi crash course? \:D

Or is everyone else:


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#8670627 - 05/25/16 12:50 PM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
Risky Business Offline
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^ yep.

And I used to get the first 3-4 cards at 0% with a 1% BT Fee, the last 3 years at least it was 1% interest and %1 BT fee. Even for a total of 2% I was pulling better gains in the market (tax free through TFSA). It's ok, since my card limits kept going up by 5k or so since inception my last card had the biggest exposure to the market and biggest loss Such is life.

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#8670645 - 05/25/16 12:56 PM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
Risky Business Offline
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Post Master Supreme


Registered: 05/17/10
Posts: 44789
 Originally Posted By: SuPeR-MaRiO
 Originally Posted By: SiZ
To me, savings and investments are two completely different things,

Thats a good way to look at it.

Investments is something I would really like to get more involved in (minimal at the moment). I just don't know shit about investing or markets or anything.

The only thing I do know is that people are so anal with their investments. And I get it, people are more reserved about their money than they are about religion. But even without disclosing dollar amounts its as if people don't want others to prosper/benefit. At my age (late thirties) I feel like I am so far behind and that I should have taken the plunge years ago.

Tips on Investing for N00bs? Risky, wanna hold a CSi crash course? \:D



This reminds me of RFD, which I used to frequent, but got so sick and tired of the idiots dispensing shit advice. People on that forum will nickel and dime the fuck out of any decision to the point where I was like "is this real life?" This is where people who don't know get lost in the irrelevant details that basement dwelling (most likely of the markham variety nerd fucks) dispense with nothing to show for themselves. Read other forums, rehash, dispense shit advice, rinse and repeat (sounds like someone on this forum ;\) ) - now any normal person that reads that garbage is confused as hell and feels inadequate...all for no reason. This happens on forums, in general neighbour banter, etc, etc. People who think they know, don't, but confuse others, those who know, don't want to say shit because not worth discussion with others, it's like a never ending poorly communicated shitstorm.

There is no science to investing, buy low MER funds like TD E Series or Vanguard (I prefer Vanguard, they are outperforming my TD E Series even when they track similar index) and forget about them. I don't have time to manage/trade an active account either, and when I did, my results were mediocre anyway.

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#8670673 - 05/25/16 01:08 PM Re: How broken is my thinking? (finance/debt related) [Re: The Postman]
Risky Business Offline
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Registered: 05/17/10
Posts: 44789
 Originally Posted By: Dumbass
Kid I work with just bought a new F150 cash. Im pretty sure they have some close to zero % financing rate.

Ive noticed this alot with the younger guys I work with. Is it some baller status thing that they think its cool to drop that much cash for something.


younger guys do this? if anything, they are all leveraged as fuck.

Maybe this guy had inheritance or he used his LOC, but since that's not a fixed auto loan, he called it cash. Wouldn't read too much into it. tards gonna tard

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#8670909 - 05/25/16 03:00 PM Re: How broken is my thinking? (finance/debt related) [Re: Risky Business]
Screamin Type ARGH! Offline
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Registered: 02/20/01
Posts: 47632
Loc: T.O. - Canaduh
+1 for keeping as much "in" savins as you can. with rates so low it doesn't hurt to use it (and build credit/paying off status at the same time). i'm always using MBNA's 0%-0.99% offers for over a year on stuff...they charge you 1% "transfer fee" bs, but usually they cut that in half when i ask. \:\)
_________________________

"Ban low performance drivers, not high performance cars"

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#8671078 - 05/25/16 04:32 PM Re: How broken is my thinking? (finance/debt related) [Re: Screamin Type ARGH!]
LNXGUY Moderator Offline
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Registered: 08/06/00
Posts: 106840
Loc: Barrie, Ont,
If someone wants to loan me $$$ at near 0%, I'll rarely refuse.
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The GN would OWN you, your children and your children's children.
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#8671781 - 05/26/16 09:14 AM Re: How broken is my thinking? (finance/debt related) [Re: LNXGUY]
OracerO Offline
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Registered: 10/07/02
Posts: 3949
Loc: GTA
Investing is long term. Just set it and forget it.

I"ll try to pay everything off upfront, if not i'll save for it. I don't think i would stress myself out and put stuff on my CC/LOC just so i can have it a few months earlier.

Or i'll just pimp myself out and make more money.

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#8672027 - 05/26/16 11:03 AM Re: How broken is my thinking? (finance/debt related) [Re: Euphoricuck]
Wildout Offline
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Registered: 11/26/07
Posts: 1767
 Originally Posted By: Euphoric
I agree with your thinking. And have taken part myself.

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#8672059 - 05/26/16 11:16 AM Re: How broken is my thinking? (finance/debt related) [Re: Wildout]
SuPeR-MaRiO Offline
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Registered: 06/28/01
Posts: 6111
Loc: Toronto, Ontario
So what's a better move, tack the $2x,000 onto my mortgage or continue to pay it off separately?
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#8672073 - 05/26/16 11:21 AM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
Senor Eduardo_82 Offline
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Registered: 01/09/03
Posts: 38036
Loc: Ca�ada
 Originally Posted By: SuPeR-MaRiO
So what's a better move, tack the $2x,000 onto my mortgage or continue to pay it off separately?


I've considered that, but never came to a conclusion on it. I think the timeframe to pay it off is what you need to think about. If you're paying it off in a year or two by itself, adding it to a 5-year mortgage term doesn't seem like a good idea. If the time frame is the same then you'll save a few bucks on interest. I'll probably continue to keep it separate unless the balance is pretty large (like $30k or more).

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#8672103 - 05/26/16 11:31 AM Re: How broken is my thinking? (finance/debt related) [Re: Senor Eduardo_82]
SuPeR-MaRiO Offline
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Registered: 06/28/01
Posts: 6111
Loc: Toronto, Ontario
I'm trying to determine if saving that hefty monthly payment is worth adding it to my mortgage and what that will mean.
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#8672122 - 05/26/16 11:41 AM Re: How broken is my thinking? (finance/debt related) [Re: SuPeR-MaRiO]
Risky Business Offline
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Registered: 05/17/10
Posts: 44789
Pay it off separate. You will stay more accountable to yourself - that's my line of thinking.
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#8672151 - 05/26/16 11:57 AM Re: How broken is my thinking? (finance/debt related) [Re: OracerO]
iamfob Offline
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Registered: 09/06/02
Posts: 24697
Loc: Out There
 Originally Posted By: OracerO
 Originally Posted By: Risky Business

I wanna know about Chinese ppl and how they saddle you with 120k debt


Honestly, i'm an open book i would share with you guys my life story on my business travels into Asia from 2010-2012. I would do this over a beer though, not on the web. The story can and will go off on tangents, as i've experienced almost everything except being in a war.

I won't lie, Clubsi - Ont held me down for when i was over there alone. No joke, reading first world problems.

I would do it again in a heartbeat.


I am down for beer
_________________________
FTMFW!!!

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