Sonic Loan Roll Call

[Preloader]

It really depends. If you still owe 10k at 3%interest. And you have put less than 10k in said mutual fund let's say 5k for this example, you really aren't doing so well. Even if you are getting 10% on the MF you are bleeding 3% of 10k on your loan. So your adjusted MF return is more like 7%. Or to simplify...... You're making ~$500/yr on the MF and losing ~$300/yr on the loan interest.

So yes, you would be "making" more money that way. But I think it's wise to refrain from investing until all your debts are paid. Investing is a form of gambling, and if you owe previous debts, you're gambling with money you really don't have. IMHO.

 

[ahtoxa]

Sometimes I can't stand my roommate.

But our mortgage divided in two is only $775/month each. That is beyond reasonable for our area.

I rent a small 650 sq ft apartment for $777/ But, I'm right near my office in a fairly expensive area. My apartment complex is the cheapest in the area.

 

[barrstev]

You also have to take inflation into account, which is between 2-3% per year. So, your loan is devaluing over its term if you pay it off slow, and the money you put into savings (mutual fund) is making you money by compounding interest.

But, if all things were equal and i had 17000 cash to buy a new car, but could get 0-3% financing for 5yrs, i would put the 17k into a safe mutual fund, and finance the car. At 10%, taking the cost of the interest into account, i would still make close to 6k... and pay off the car. Right now the market has been performing even better.

If your interest is through the roof because you have badcredit, well...

 

[Preloader]

I think the problem is people use that example you gave to justify not paying of the loan quickly, and then don't actually invest the money as planned.

If you literally stick the 17k in the market at the same time you get the loan for a 17k car financed, then yes, you will be in the green.

But I think it us extremely rare that someone would do that in real life. Also why not stick the 17k in the market and wait 7 years and then buy a 17k car with the interest earned and have no loan? Again, doable, but unrealistic.

I'm at a point in my life where no argument will convince me that borrowing money is a good idea. With the exception of a responsible home loan.

 

[ahtoxa]

Well, it depends on your definition of a "good idea".

It is a good idea of your interest rate is very low, you can pay off the loan sooner and you don't want to fork out cash while you absolutely need a vehicle that costs more than you can pay in cash on the spot. This is the scenario for majority of consumers. It's a good idea, because it builds credit. In some professions you can't drive around in a dinky car with your clients - you won't have a job this way - and even if you're doing well, paying $50-60k for a car in cash isn't realistic. Definitely NOT a smart financial move, even if you have the money. Keep in mind, that many wealthy people don't sit on a ton of figurative money in their bank - much of it is invested or otherwise tied up and keeps making them money as they go.

On the flip side, for most people borrowing large sums of money isn't a good idea in general, mostly because there are inherent risks with borrowing money - you may not be able to repay it.

Pre - your personal experience has shaped your opinion about borrowing, and rightfully so. In your case, given your specific details, it may well not be a good idea to borrow money, except for a house. But, for other folks that didn't screw up like you and I have in the past, borrowing money is a good idea financially, and they take advantage of it.

 

[Preloader]

True. Everyone's path is different.

Just expressing a warning about borrowing and investing at the same time. Risky stuff.

I like to plan as if my job could be gone tomorrow. I have enough saved up to survive for 8 months while I look for a job. But once I no longer have the car note, that same amount of money will cover me for a year.

Then again, I don't even consider defaulting on my Sonic if I got in real trouble. Other people may consider just giving the car back if they can't keep up on the payments during hardship.

Oops. Went off on a tangent.

 

[ahtoxa]

You're in much better shape than most people.

I like to think that on the average, most people don't have more than 2-3 months worth of savings to sustain them if they lost their job. This doesn't include the 401k assets, which can be liquidated at a great penalty, but are there as an absolutely last case scenario.

Hard to say for sure, but a single person can be comfy living on 3 grand a month all-inclusive. When in need, that can be wittled down to $2500 and maybe less. I'd be amazed if majority of population has more than 10 grand in savings at a given time.

This number drops drastically for any individual making less than 50-55 grand a year and living alone or household making less than 70-75 a year.

 

[Preloader]

Full disclosure. My bare cost of living a month, all inclusive of mortgage, gas, ins, phone, groceries, etc is about 2200/month. So once my car note is gone, that drops to 1800/month.

Mortgage: 800
Car note: 400
Food: 400
Gas: 200
Entertainment: 200
Insurance: 75
Phone: 70

I sock away 800/month into personal savings. 500/month into family savings. And 1000/month into 401. But that would all go to zero in the event I'm unemployed.

Brown-bagging lunches and not going out to dinner probably makes the biggest difference in keeping my living costs down. I can feed myself breakfast, lunch and dinner for less than 100/wk, and I eat very healthy choices.

I made spreadsheets in excel to track my spending and that's how I found out where I could cut the fat, and how lean I could live monthly.

I've got big ambitions. I get paid well, but at the cost of daily physical abuse. My co-workers spend big and when their career is at end they've got nothing much to show for it than a bad back and knees.

I'd rather sacrifice now and enjoy later, than live it up now and have sh¡tty twilight years.

 

[ahtoxa]

****, your monthly expenses are nearly identical to mine. I do spend about 400 on groceries (eat a lot of organics), plus another $150 or so on lunches. $80 of those $400 at the grocery go towards beer, as I fancy local microbrews, which are more expensive.

Lunches and dinners out is a huge spending category for me, too. I mean, there's nearly $600/month on food (including all dinners out, etc).

But, I'm a single dude, and while I can cook, it's a huge chore, because cooking for a day or two makes no sense from the effort standpoint, and cooking for 3-4 days sucks, because by then I'm not feeling those leftovers. First world problems, I know.

So yeah, if I brownbagged lunches every day I could cut at least $100 a month, but to me it's not exactly worth it. In the grand scheme of things, it's a small vice I'm willing to pay for. However, it's worthy of note that I did recently reduce my lunches by about $10/week, which is roughly $40 a month by eliminating soda and getting water instead. Soda was my food vice, too. I also only each Chipotle for lunch, as I'm a big proponent of organic/natural dairy and meats. Yeah, I know Chipotle isn't all that, but it isn't terrible when it comes to eating naturally raised food on the quick.

Done derailing the thread.

Edit, my dog averages $100/month on food, plus his annual medical expenses like shots and what not will be amortized to a total of about $120 a month.

 

[Wooksquatch]

****, your monthly expenses are nearly identical to mine. I do spend about 400 on groceries (eat a lot of organics), plus another $150 or so on lunches. $80 of those $400 at the grocery go towards beer, as I fancy local microbrews, which are more expensive.

Lunches and dinners out is a huge spending category for me, too. I mean, there's nearly $600/month on food (including all dinners out, etc).

But, I'm a single dude, and while I can cook, it's a huge chore, because cooking for a day or two makes no sense from the effort standpoint, and cooking for 3-4 days sucks, because by then I'm not feeling those leftovers. First world problems, I know.

So yeah, if I brownbagged lunches every day I could cut at least $100 a month, but to me it's not exactly worth it. In the grand scheme of things, it's a small vice I'm willing to pay for. However, it's worthy of note that I did recently reduce my lunches by about $10/week, which is roughly $40 a month by eliminating soda and getting water instead. Soda was my food vice, too. I also only each Chipotle for lunch, as I'm a big proponent of organic/natural dairy and meats. Yeah, I know Chipotle isn't all that, but it isn't terrible when it comes to eating naturally raised food on the quick.

Done derailing the thread.

Edit, my dog averages $100/month on food, plus his annual medical expenses like shots and what not will be amortized to a total of about $120 a month.

I am going to help get this thread back off track one more time. Cooking for 1 might be a chore if you only cook one meal at a time, take 1 day a week and batch cook, if done properly you could have 12 meals for about 2 hours work in the kitchen.

 

[Preloader]

I am going to help get this thread back off track one more time. Cooking for 1 might be a chore if you only cook one meal at a time, take 1 day a week and batch cook, if done properly you could have 12 meals for about 2 hours work in the kitchen.

That's what I do for my lunches. I cook about $5 worth of chicken breast on Sunday. And make a chicken wrap every morning while getting ready. I also pack a Clif bar, serving of cashews or peanuts, and an orange. And when I get sick of chicken I switch to steak sandwiches the next week. My cost for lunches is never more than $20 a week.

Homemade dinners average about $10/night, but that's for 2 people. Then we pick one time a week to go out for dinner or breakfast, and that bill is usually $25-35.


I don't think we are going off topic too badly. These examples may be helpful to some. I know I'm enjoying them. But I am considering starting a new thread in the off topic lounge about personal budgeting, so keep an eye out for that.

 

[ahtoxa]

I am going to help get this thread back off track one more time. Cooking for 1 might be a chore if you only cook one meal at a time, take 1 day a week and batch cook, if done properly you could have 12 meals for about 2 hours work in the kitchen.

Yes, but see the second part of what I posted about that. I can't do leftovers for more than 2 days. Since I eat mostly fruit breakfasts and lunches out, that would mean I could eat leftovers for 12 days. No, that's not going to happen and food will go to waste. So, for me, I have to cook no more than 3 meals in order not to be wasteful with food. Cooking 3 meals is a waste of time.

 

[ahtoxa]

That's what I do for my lunches. I cook about $5 worth of chicken breast on Sunday. And make a chicken wrap every morning while getting ready. I also pack a Clif bar, serving of cashews or peanuts, and an orange. And when I get sick of chicken I switch to steak sandwiches the next week. My cost for lunches is never more than $20 a week.

I don't know. Now that I cut out soda, my lunches are $35 a week (Chipotle). The $15 increase a week is worth it to me. But that's just me.

I also pack a Cliff bar and organic bananas in the morning. In fact, they are on my desk at the office now, ready to be eaten.

 

[Preloader]

In my trade 30 minute lunches are typical. That's another reason I insist on bringing my own. I'm not about to use any bit of those 30 minutes procuring food.

Some knuckleheads on my job spend 20 minutes going to the nearby Jamba Juice. $6 for a sugary fruit smoothie? Yah, no thanks. Hahaha.

Your $35 lunch budget seems reasonable. I do miss warm lunches..... But my stomach doesn't read temps.

 

[$ub$onic]

On the topic of food,my wife and I only spend about 100-150 a month on food at the store. We shop at a discount store that sells stuff almost at its expiration date (minis meats, milks and cheese). We can have a dinner for 2 for under $6.

We cut our food bill in half by just switching from wal-mart to the sharp shopper.

 

[ahtoxa]

On the topic of food,my wife and I only spend about 100-150 a month on food at the store. We shop at a discount store that sells stuff almost at its expiration date (minis meats, milks and cheese). We can have a dinner for 2 for under $6.

We cut our food bill in half by just switching from wal-mart to the sharp shopper.

I could cut my food budget, but I insist on buying as much organic stuff as I reasonably can. I'm a huge believer that the health investment in organic food is hugely important and it's well worth it.

BUT. I'm always thrilled and always look for deals like you describe. Kroger will often have cheese and humus and dairy products that are getting close to expiration date, which I will buy up right away.

Which store do you shop at? I'll see if there's anything like this here.

EDIT. 100/150 a month for two is insane. What do you normally eat, if you don't mind me asking?

 

[$ub$onic]

I could cut my food budget, but I insist on buying as much organic stuff as I reasonably can. I'm a huge believer that the health investment in organic food is hugely important and it's well worth it.



BUT. I'm always thrilled and always look for deals like you describe. Kroger will often have cheese and humus and dairy products that are getting close to expiration date, which I will buy up right away.



Which store do you shop at? I'll see if there's anything like this here.

I think it's just a local food chain. It's called sharp shopper.

 

[The Champ]

Just bought ours. $20,355 sticker. Out the door price with tax, title and license $13,289 (rebates, dealer discount, GM credit card cash).

Financed $13,289 at 1.39%. Got a $3500+ reimbursement from ACDelco (I work for an ACDelco warehouse distributor in sales and had earned that much in incentives that could be used towards a new GM vehicle).

36 month loan with payment of $389. From my reimbursement check I paid $500.00 towards my loan and have the rest invested. So current balance is $12,789 with the first payment due on 10/18.

Will most likely have the car paid off in 12 - 18 months. Could have paid cash, but with the interest rate so low, decided to keep my money where it is.

 

[Preloader]

Down to $4,400. The end is coming..... I can actually taste it.opcorn:

 

[CheapFuneral]

I'm at 15 still


If I die, bury me in my truck, because it's never been in a hole it can't get out of!