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  #61  
Old 01-05-18, 05:41 PM
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Originally Posted by serpico View Post
I wouldn't say 'extremely high'. There are also 15 and 30-year periods where The S&P has gone down. Some people prefer not to take that risk because they sleep better at night having no debt.

It's dickish to mock such people, IMO.
Can you point me to one of those 15 or 30 year periods where the market was down? I’m calling bs.
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  #62  
Old 01-05-18, 05:42 PM
WinstonSmith WinstonSmith is offline
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See my links, EP. he is wrong.
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  #63  
Old 01-05-18, 05:45 PM
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Originally Posted by serpico View Post
This is incorrect. Check out '68 through '92 or '00 through '14.

http://www.macrotrends.net/2324/sp-5...cal-chart-data
Obviously an investor would be dollar cost averaging into the market, not plopping all his money on the day the market tanked. Come on.

I would wager a LOT of money that even if you started at a market peak dollar cost averaging into the market, there’s never been a 10 year period where the market didn’t exceed a 3.5% annual return on average.....Id even take a bet on a 5 year period.
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  #64  
Old 01-05-18, 05:47 PM
WinstonSmith WinstonSmith is offline
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Here’s a link for 30-year rolling returns: http://observationsandnotes.blogspot...arket.html?m=1. The absolute worst 30 year return was an annual return of 6.1%.
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  #65  
Old 01-05-18, 05:57 PM
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Originally Posted by WinstonSmith View Post
Here’s a link for 30-year rolling returns: http://observationsandnotes.blogspot...arket.html?m=1. The absolute worst 30 year return was an annual return of 6.1%.
Thanks. Has anyone looked at buying the monthly average of the dow/s&p for rolling periods? That would be interesting to see.
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  #66  
Old 01-05-18, 05:58 PM
WinstonSmith WinstonSmith is offline
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I’m not sure, but that would be a more accurate depiction of how one’s own investment would perform, and it would be significantly better than the 6.1% in my link.
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  #67  
Old 01-05-18, 06:11 PM
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The bottom line is over the course of a mortgage, if you interrupt your investment contributions into the s&p to pay off a 3.5% mortgage, it is very likely to cost you a lot of money. And dca into the s&p is a very conservative way to be invested in equities. If you can’t sleep at night doing that, you would probably have a better return spending that money on a therapist to treat your anxiety versus paying off a mortgage. If the truth is dickish, then so be it.
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  #68  
Old 01-05-18, 06:58 PM
eastisbest eastisbest is offline
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Originally Posted by eastside_purple View Post
Studies have shown you actually get a worse deal offering to pay cash or negotiating a shorter loan. I have a feeling the auto saleman is conning you into believing you are a shrewd dealmaker.
You're feeling something but it's not the facts, lol.

I don't negotiate the cash. I negotiate the price and if it gets where I think it oughta, then offer the cash before I walk out the door. Price drops, significantly. Even worked at Saturn.

So nope. Now if I can figure the trade-off between investing vs long term loan, don't you think you could have given me credit for figuring out expenditures over the life of a loan?

So, 6 year car loan huh? I presume you got one of those lower depreciation cars? See my luck is the car would never be worth more than what I have left on the load, lol. First car was a Pinto. Kind of went down hill from there. I did like my Saturn though. Plastic panels. Only vehicle I ever had more than a year wasn't dented up.
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  #69  
Old 01-05-18, 07:23 PM
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Acura, 0% interest, 72 months.

I’m sure you got a great deal and the dealership probably forgot they make more far more money on financing, where they get paid cash from the bank/finance company plus usually a percentage of the financing rate, than just getting cash (and giving you a discount for it). And I’m not sure if you are aware of it, but EVERYONE gets a discount the minute they first head out the door. It’s part of the game. And you thought it was because you were offering to pay cash? Lol.
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  #70  
Old 01-05-18, 07:40 PM
19AL63 19AL63 is offline
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Years ago before I got to the point in life that I pay cash for everything. I bought a new car and did my own financing through a credit union and I never saw a salesman so upset that I would not finance through him and GMC. GMC would have cost me almost 400 more in interest and I told the salesman to lower the cost of the car another 400 and I would do it with him. He just look at me like I was nuts and ended up a unhappy salesman.
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  #71  
Old 01-05-18, 08:07 PM
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Originally Posted by 19AL63 View Post
Years ago before I got to the point in life that I pay cash for everything. I bought a new car and did my own financing through a credit union and I never saw a salesman so upset that I would not finance through him and GMC. GMC would have cost me almost 400 more in interest and I told the salesman to lower the cost of the car another 400 and I would do it with him. He just look at me like I was nuts and ended up a unhappy salesman.
That’s funny.
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  #72  
Old 01-06-18, 06:59 AM
WinstonSmith WinstonSmith is offline
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Originally Posted by eastside_purple View Post
The bottom line is over the course of a mortgage, if you interrupt your investment contributions into the s&p to pay off a 3.5% mortgage, it is very likely to cost you a lot of money. And dca into the s&p is a very conservative way to be invested in equities. If you can’t sleep at night doing that, you would probably have a better return spending that money on a therapist to treat your anxiety versus paying off a mortgage. If the truth is dickish, then so be it.
+1 building wealth while upgrading current life style at the same time. Use debt to your advantage.

Same reason people often use debt when flipping houses — less capital they have to use themselves.
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  #73  
Old 01-06-18, 08:06 AM
cabezadecaballo cabezadecaballo is offline
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Originally Posted by 19AL63 View Post
Years ago before I got to the point in life that I pay cash for everything. I bought a new car and did my own financing through a credit union and I never saw a salesman so upset that I would not finance through him and GMC. GMC would have cost me almost 400 more in interest and I told the salesman to lower the cost of the car another 400 and I would do it with him. He just look at me like I was nuts and ended up a unhappy salesman.
My mantra simply is, "I'm not out here shopping for a monthly payment. I'm attempting to negotiate a purchase price on a vehicle.". If I'm forced to say that a third time because they keep pushing the payments/finance angle, I've had to add, "This is becoming difficult to get across to you, and kind of frustrating. Do I need to shop elsewhere ?". It takes me a while to get to the actual negotiation, though.

I usually pick a vehicle off the lot based upon my own research before I really talk to anyone much. I'll try to focus on new from last year after the next model is out for a bit, like October. Kelly Blue Book's site and Edmunds.com are both great resources if you hit all the widgets and gimmicks on their pages.

Sometimes I'll just write down the VIN and attempt to go right to the sales manager, to circumvent the tiresome "gotta ask the manager" game they use to try and wear you down. I've also found that getting with someone an hour before closing and keeping them an hour after constitutes an investment that sales people don't want to walk away from empty-handed.

If it's a used vehicle, only when we get to the end of the line do they find out I'm not financing with them. Cash is not much of an incentive any more unless you are talking to the owner of a small lot. It's hard for them to conceal while still paying an employee.
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  #74  
Old 01-06-18, 09:30 AM
irish_buffalo irish_buffalo is offline
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The bank and or financier obviously makes the money on your loan. The dealer makes money on his mark-up regardless of paying cash or getting a loan. They lose bargaining power when you have cash or your credit is good enough that you can name your loan price to the bank. Many people, due to poor credit, HAVE to go through the dealer for financing and that is when they can put the screws to you. $500 down and 8% interest on a nice SUV with rims with 120,000 miles on it = money maker.

cabe, I'm a lot like you, I research and research and research before I purchase a vehicle. I will talk myself into and out of buying something 15 times before I buy it. Then I usually drive the thing until it rusts out (the last few couple been passed down to kids). My latest is a 2013 F-250.

As for paying it off early I stick to my guns. I had the money and so I did it. I guess I come from a generation where I want little to no debt. I'm always fearful that I might lose my job (even though I'm a great employee) or get sick. I always want to be prepared and not leave behind a mess for my family. I watched a lot of great hard working people who were going to retire with millions lose everything the last economic downturn and I never want that to be me. It is a internal philosophy I guess and that of course changes as you age.

And ironically I used to flip houses in my youth. I made some good money. Winston, you are not teaching anyone anything here. I used other people's money to make money. Flipping houses can be very lucrative but it is a constant hustle putting in a lot of hours. I wanted something more stable with benefits and to be able to see my family on the weekend.

Regardless, and to become the repeater, I see all those folks who lived outside their means pre-2008, buying expensive toys, oversized McMansions, and driving luxury cars and trucks, the same ones who filed bankruptcy and had to walk away from all that fine stuff making the same mistake today.
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  #75  
Old 01-06-18, 09:40 AM
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You aren’t talking about living outside your means, you bragged about paying down cheap debt, which has been demonstrated as counterproductive to building wealth.

Re: how dealerships make money, they absolutely make money off driving customers to financing. They get the profit on selling the car, your trade-in (if there is one), and in the form of a piece of the interest from financing. As a result, the best “price” and concessions are now built into finance deals, not cash.
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  #76  
Old 01-06-18, 04:05 PM
irish_buffalo irish_buffalo is offline
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No, I am. I bragged, sure I did. You bragged about paying off your loan at what? 6 years? Congrats. You act as if you maximized your wealth by using a car loan to the best of your ability. Kudos.

Again, the dealer makes money on the actual sale of the car. I always buy something with low miles and less than a year old. Whether I pay cash or finance through my bank that dealer only gets X amount of mark-up. The bank gets to make interest off of me. I already described how the dealer REALLY wins which is why there is a "Nationwide Auto Finance" on every corner.
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  #77  
Old 01-06-18, 04:33 PM
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Originally Posted by irish_buffalo View Post
No, I am. I bragged, sure I did. You bragged about paying off your loan at what? 6 years? Congrats. You act as if you maximized your wealth by using a car loan to the best of your ability. Kudos.

Again, the dealer makes money on the actual sale of the car. I always buy something with low miles and less than a year old. Whether I pay cash or finance through my bank that dealer only gets X amount of mark-up. The bank gets to make interest off of me. I already described how the dealer REALLY wins which is why there is a "Nationwide Auto Finance" on every corner.
Used car, okay, I already addressed that.
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  #78  
Old 01-06-18, 05:39 PM
eastisbest eastisbest is offline
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OT: No holiday debt for me. Thank you the inventor of the white elephant.
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  #79  
Old 01-06-18, 07:23 PM
cabezadecaballo cabezadecaballo is offline
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Originally Posted by irish_buffalo View Post
No, I am. I bragged, sure I did. You bragged about paying off your loan at what? 6 years? Congrats. You act as if you maximized your wealth by using a car loan to the best of your ability. Kudos.

Again, the dealer makes money on the actual sale of the car. I always buy something with low miles and less than a year old. Whether I pay cash or finance through my bank that dealer only gets X amount of mark-up. The bank gets to make interest off of me. I already described how the dealer REALLY wins which is why there is a "Nationwide Auto Finance" on every corner.
PenFed Credit Union is an awesome auto lender, both new and used. Hard to beat their rates anywhere. Dealers hate them because a lot of dealers often get a nice little spiff from the dealership's financier of choice.

Some manufacturers self-finance, and the 0% deals usually are offered to incentivize the purchase of an over-produced model. Honda/Acura is typically not fond of bargaining down too much. e_p likely got close to the best deal he could get if he caught 0% on "last year's new".

I'd think twice about taking the 0% in lieu of a "factory incentive" discount on say a well-equipped American truck, though, when they market that way. I would take the base price and deduct 10% of it. Then take the price of the option package, and deduct 25% of that. Ask around and find the employee family discount off of the sticker price, and deduct that. Finally, deduct the factory incentive amount. That's your magic number on an over-produced model. You might not get it at the first place you go, but someone will give it up. Especially now, when the weather sucks and traffic is low. THEN you tell them you've got your own lender. 1.9% on new from PenFed will be a better net deal.
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  #80  
Old 01-06-18, 07:51 PM
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Originally Posted by cabezadecaballo View Post
PenFed Credit Union is an awesome auto lender, both new and used. Hard to beat their rates anywhere. Dealers hate them because a lot of dealers often get a nice little spiff from the dealership's financier of choice.

Some manufacturers self-finance, and the 0% deals usually are offered to incentivize the purchase of an over-produced model. Honda/Acura is typically not fond of bargaining down too much. e_p likely got close to the best deal he could get if he caught 0% on "last year's new".

I'd think twice about taking the 0% in lieu of a "factory incentive" discount on say a well-equipped American truck, though, when they market that way. I would take the base price and deduct 10% of it. Then take the price of the option package, and deduct 25% of that. Ask around and find the employee family discount off of the sticker price, and deduct that. Finally, deduct the factory incentive amount. That's your magic number on an over-produced model. You might not get it at the first place you go, but someone will give it up. Especially now, when the weather sucks and traffic is low. THEN you tell them you've got your own lender. 1.9% on new from PenFed will be a better net deal.
I bought it 9 years ago at the height of the auto crisis. It was a great deal.
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  #81  
Old 01-06-18, 09:30 PM
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I bought it 9 years ago at the height of the auto crisis. It was a great deal.
I bet you got a steal. Perfect time to buy
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  #82  
Old 01-07-18, 12:04 PM
cabezadecaballo cabezadecaballo is offline
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I bought it 9 years ago at the height of the auto crisis. It was a great deal.
Sounds right in line with what I said Had the following year's model already been released, or was it imminent with your purchased car being plentiful on the lots ?
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  #83  
Old 01-07-18, 12:35 PM
ronnie mund ronnie mund is online now
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Never had a credit card before. Hasn't stopped me from doing anything yet, but sounds like it's better if I get one. Any recommendations for first time holders?
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  #84  
Old 01-07-18, 12:49 PM
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Sounds right in line with what I said Had the following year's model already been released, or was it imminent with your purchased car being plentiful on the lots ?
It was the newest model. Anyway, cash doesn’t get you the best deal on a car, especially a new car (it may have a negligible impact on used car sales). Car dealer make money on the mark-up, the trade-in, and increasingly important the financing arrangements with their finance arm or bank. This shouldn’t be new information to anyone anymore.
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Old 01-07-18, 06:01 PM
eastisbest eastisbest is offline
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Originally Posted by eastside_purple View Post
It was the newest model. Anyway, cash doesn’t get you the best deal on a car, especially a new car (it may have a negligible impact on used car sales). Car dealer make money on the mark-up, the trade-in, and increasingly important the financing arrangements with their finance arm or bank. This shouldn’t be new information to anyone anymore.
You say the customer can't get the "best" deal using cash and the car dealer makes their money off the financing. Is there a third option I'm not thinking of?

I don't think anyone thinks they're getting something for free but if the demand price drops because of the terms offerred then certainly a "better" deal was had. Shouldn't be THAT hard to admit.
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