Originally Posted by Jersey Shore

I can't believe that a thread like this get 91 responses. What am I doing here?

Originally Posted by scatkins

I've got no problem financing 100% and paying 1.99% finance charge and keeping my investments which I got 30% return on my portfolio last year. and when I have a 4.5% mortgage.

I realize the investment part is variable and what was 30% last year can be -10% this year possibly, but in that case I adjust the strategy and pay off the highest interest loan..

I too grew also grew up listening to people like my father who said "never pay finance charges" just pay cash.. Unfortunately those rules of thumbs were based on overly simplistic assumptions like your money in the bank is returning lower rate than the finance charges.. It is a much more complex finance world now.. It is financially stupid to pay cash for something when the money you use to pay for it can earn you more. It may make you feel better about it, but when it is all said and done your net worth suffers.

The most prudent management strategy is not to avoid paying finance charges it is to always pay off your highest interest debt. But at the same time never use an investment has a higher rate of return to pay off a lower interest loan.

This presumes of course you were already going to make the purchase. The most prudent strategy is just to keep your last car longer and buy lower price items.. But once you decide to purchase, simply paying cash without understanding the implications is short sighted..

Rules of thumbs don't always give the entire picture and must be adapted to the individuals specific situation and investment mix.

Me.. I'm taking someone else's cheap 1.99% money for as long as I can get it..

Originally Posted by nash667

Id say it really depends.

Putting down 30k when you have roughly 400k in the bank means you are committing roughly 8 percent of your savings to a car, an asset that depreciates in value incredibly fast.

On top of that you are financing 34k, effectively committing another 8 percent of your savings over 2 years...

But you have to ask yourself is 16% of my savings worth the treat? I would probably not do it, but hey that's just me.

Originally Posted by Money2536

$300,000 in income is more like being in the top 5% of income earners in the US. Having $400,000 in savings/retirement is probably closer to the top 25% of the 30-35 year-old demographic.

Originally Posted by Money2536

Well said.

Originally Posted by porschemama

This sounds a lot like the thread regards to lifestyle, but giving op the benefit of the doubt... I also looked into 991 for my husband but decided I wanted one too! For the short term, go for it and have fun. Should you have plans to have a family... wife, kids, private school, college could take a chunk of your money. Top prep high school tuition runs $45,000+ annually and college $50k+. A friend traded in his Ferrari when he started paying $10k monthly tuitions for 3 school age kids. Enjoy while you can.