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Old    Jon (jon4pres)      Join Date: May 2004       10-17-2007, 3:00 PM Reply   
Tim, You are the man against debt and now you are saying that at retirement is the right time to cash in you equity by using debt. I was talking about getting the equity for free not paying interest to use your equity.

You can always take the equity out of your house in the form of debt but I think that is a little different than actually cashing in your equity to retire. At retirement most people's income is going to go down. If you use a home equity loan then you are actually going to be adding a payment to your already smaller income(assuming you had the house paid for already).
Old    Erik (etakk7)      Join Date: Apr 2006       10-17-2007, 3:29 PM Reply   
I agree with many of the statements of Tim and others, but I also believe that I won't be doing inverts on a wakeboard or kneeboard when I'm 50 or 60. That's the reason why I own a nice boat now. I had an I/O, and it wouldn't cut it for the wake I wanted, so I got a V-drive. I don't care how you sack out an 18' Bayliner, it still has a terrible wake with terrible speed control.

To Tim's point I bought a house and a cabin on a Lake and afforded those payments before I ever bought a boat. I used a deductible home equity line to buy the boat as well.
Old    Tim (monkey)      Join Date: Oct 2002       10-17-2007, 3:46 PM Reply   
Jon, If you read carefully, I'm the man against financing depreciating assets, not the man against debt. Debt is leverage, and as investors, most of us use (and need) leverage.

When you get to be retirement age, the dynamics of the game change. Your objective is simply to keep enough capital around to see you through to the end of your years. You can't take it with you, and if you leave too much of it behind, the government is just going to take it away from the people you left it to anyway.
Old    Erik (kinger)      Join Date: Jun 2007       10-17-2007, 10:11 PM Reply   
So let me get this right: if you bought a house last year in California the market decline over the year was 3-4% and inflation was at 4-5% rate. So this year your so called "appreciating asset" lost you 8-9%. Now yes on average you will make that money back plus some, but the economics of capitalism is not just as easy as save $500 a month an then pay cash, because you don't know what $50K in 5yrs will buy. Several people on here are contradicting themselves. So Tim's theory lets say I financed 80K @ 7% for 15 yrs and then used the 80K I saved by financing and made 11% in investments I could have the boat early and pay it off w/my investment earnings in 6yrs. So ultimately I had a nice boat well I was young and still made money...sounds like the best of both worlds to me.
Old    Tim (monkey)      Join Date: Oct 2002       10-18-2007, 12:23 PM Reply   
I'm over it. Let's let this thread die. Finance away!
Old    Chad Davis (garman)      Join Date: Feb 2005       10-18-2007, 8:05 PM Reply   
Tim, I agree..... Here's another idea... If lenders didn't allow 15 yr loans for boats, I bet the boats wouldn't cost $65K. Boat companies wouldn't go under, they just wouldn't charge as much for the same product. If people will pay $65K.. what do you think the price will be?
Old    Nu Bu (05mobiuslsv)      Join Date: Apr 2006       10-18-2007, 9:09 PM Reply   
Chad I think you're onto something..
Old    rG (canecorso)      Join Date: Aug 2007       10-19-2007, 6:45 AM Reply   
I wonder how much profit they make on a 65k boat, and/or what they cost to build


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