Boats and women. Both get old lose value to others with time, and both cost a shit load of money every month just to keep around. That doesn't even count maintenance costs.
I wouldn't live without either.
I wouldn't live without either.
This is the real crux of it. Depends on your interest rate. If you can make more money investing your cash than you pay in the interest rate on the loan, definitely take the loan. The last time I bought a new car, I was offered 1.2% interest rate. I had cash to buy the car, but I took the loan and split the cash between property and investments. That cash averaged 7.8% growth over 5 years.Sea Dream worked out for me. They're in Costa Mesa.
I don't subscribe to the always buy things in cash idea. I put a decent down payment on my [new] boat and I don't worry about what the last owner(s) messed up or neglected on my vessel. Then, just like my other one, I'll sell it used, taken care of, and at a little bit of a profit to the next guy. Totally worth my money and time saved. Btw, my money in stocks and other assets have totally beaten the low interest rate I pay for the boat.
Except you are comparing borrowing at a risk-free rate (ie you are 100% for sure going to pay back the loan or go bankrupt) against a rate that is higher just because it entails risk. Beating a risk-free rate in a good economy often creates a false sense of security.Btw, my money in stocks and other assets have totally beaten the low interest rate I pay for the boat.
I'm not keeping the boat. I use it a few years, pay a little bit a month, then sell.Except you are comparing borrowing at a risk-free rate (ie you are 100% for sure going to pay back the loan or go bankrupt) against a rate that is higher just because it entails risk. Beating a risk-free rate in a good economy often creates a false sense of security.
My comment wasn't intended just for you -- that's why it wasn't sent as a PM in the first place. Frankly, your public request that I PM you for coffee sounds a little hypocritical.I'm not keeping the boat. I use it a few years, pay a little bit a month, then sell.
But if you want to have a detailed conversation about your opinions regarding my finances, send me a direct message instead and we'll have coffee.
No truer words written.^^^^You posted asking for "Boat Loan Advise" so here is mine:
You're asking someone to give you money, with interest, for a depreciating asset. Many people do this with cars. And it is the single biggest wealth-killer of the American middle class. For what. So you can kill a few fish? Charter a boat and save way more money, long term.
It only makes sense to take out a loan if A) there is an asteroid coming for Earth and you just want to go down with the ship, or B) you're buying something like a clash-flowing duplex that makes you money every month and has the opportunity to go up in value. Double bonus.
The problem with financing a boat? It looses value and doesn't have rental income.
The moment you take out that loan you'll be "underwater," meaning that you'll owe more than your boat is worth. Not only that, you'll be playing for it every month, setting back your savings.
Maybe keep your current boat to keep you on the water. Sell it when you've saved, then go buy that big honker you dream about.
(And this is coming from a total boat person who would do almost anything to stay on the water. Best of luck, either way. I know thinking about boats like I just outlined is often the last thing anyone wants to think about.)