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Spin Spin Spin
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Life never seems to go as planned. always twists and turns, at least for our family. First son born with profounf disability - tremendous medical expenses, wife unable to work needing to stay home with him, me working 3 jobs to keep food on the table and not answering the credit card late payment calls. 2nd son broke neck - once again tremendous expenses, raised thousands and thousands for a special van and addition to the house, had to quit job and career to support his efforts at rehab and to get back into the world. Now facing expenses associated with medical side of aging for wife and myself.

It just is not as simple as an amortization chart.
I only liked this because of the example of life not dancing to your tune and things beyond your control will rear their ugly head all along the way......not liking what you've had to endure.
 

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Two skinny J's
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21,811 Posts
I read this and all I can picture is an economics professor walking out after class to his 1972 Pacer :)

It will be mine!

[ame]https://www.youtube.com/watch?v=thyJOnasHVE[/ame]
 

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Spin Spin Spin
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Here's another example of how people battle breaking free of a credit laden life..........we do not live within walking or biking distance of work soooooo, we need cars. because public transpo is a joke. Here's how other people spend your money for you.............wife is parked at work and fixing to go in. She is gathering her stuff to get out and gets hit by woman pulling up to back in a spot. She hit her gas instead of brake. Oh yeah, she gots an insurance card but no active policy so guess who's all ripped off for time and money? US! spend money at ER because she hit head shoulder and wrist when her car was struck. I take off work to take her to ER - more lost money. $75 for cab ride for me to go fetch car home since you cannot drive one car and drag the other one home with you like you could on a bike. $250 deductible for uninsured motorist. However much for rental car that our ins won't cover beyond the $40 a day for one. 3 of her days off a yr from work that we could have planned for and spent together instead of her using them to recover. Diminished value of our car because it now will have incident on it's history. $70 on a charity ride tomorrow that we will not be riding in because wife won't be up for that at this point. I'm sure more crap will grab some more cash from us just to get this behind us....like more time and money to drag them thru court to try and get paid back. Yeah, just goes on and on. Easy to talk about living debt free but doing it without other people effing up your plan for you will be much more difficult than is usually considered. Again, good luck.......
 

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Deranged Touring Cyclist
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^^ Tough break, i12! I hope your wife's recovery is quick, comfortable, and full. I hope your dealings with officials and insurance are equally quick, comfortable, and successful, but...well, best of luck on that front :(
 

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Maturity Challenged
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A lot of people believe Dave Ramsey https://www.iheart.com/live/dave-ramsey-channel-5859/ is a good source of information for financial structuring and how to be debt free. I really like his internet radio show and listen every once in a while. The Dave Ramsey philosophy has worked very well for me.

Disclaimer* I have not spent a penny on any of his marketing products or schools because 95% of his teaching falls in line with how I have always handled my personal and business finances.
 

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Discussion Starter · #26 ·
I can see everyone's point. Like most things the simple plan is not inline with reality.
Fortunate here that I can bike everywhere. Small town and all.
I will check out Dave Ramsey.
Thanks to everyone for the guidance and wisdom that comes with experience.
Pretty clear there is a need for some credit, especially under certain circumstances. Buying a flat screen is probably not one. Paying medical bills when a child has a disability is definitely one.
Everyone has been a huge help. My fiancé is really not frugal and it kinda is my opposite. He makes a large income and mine is tiny. Just has me thinking. Most financial discussion we have end in him smiling and saying I am silly and not to worry.
He wants to buy us a new house and I look at the cost and freak out. Sure we can make the payment because of his income. It is a lot of money though and could buy many bicycles haha kidding bout the bikes.
I just want to save more and have like 50% down instead of the 20% we have. It is my nature or something.
 

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Two skinny J's
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You've come full circle in a short period of time. If you can stay the course you'll be way better off than the general population! I'm impressed you have put so much thought into this. Of course seeing those number of buying your first home can be intimidating...well ok still is to me but that's just part of life. Especially in this day and age were financial stability, pensions, and job security or nothing compared to what many of parents were fortunate to have. I have one friend who managed to retire from what is now Verizon after a 40 year career with them and other friends that are lineman with the local power company who have managed nice long careers with one company and even then both have changed hands at least once,it's a scary deal to say the least. My wife is a contractor on one pf the local military bases and I can;t stand contract renewal time. Lucky for she still, today at least, has a job but due to contracts, etc, it's almost like starting over with PTO and the like.

My point is that nothing is ever just black and white and it seems you are figuriong that out.
 

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I can see everyone's point. Like most things the simple plan is not inline with reality.
Fortunate here that I can bike everywhere. Small town and all.
I will check out Dave Ramsey.
Thanks to everyone for the guidance and wisdom that comes with experience.
Pretty clear there is a need for some credit, especially under certain circumstances. Buying a flat screen is probably not one. Paying medical bills when a child has a disability is definitely one.
Everyone has been a huge help. My fiancé is really not frugal and it kinda is my opposite. He makes a large income and mine is tiny. Just has me thinking. Most financial discussion we have end in him smiling and saying I am silly and not to worry.
He wants to buy us a new house and I look at the cost and freak out. Sure we can make the payment because of his income. It is a lot of money though and could buy many bicycles haha kidding bout the bikes.
I just want to save more and have like 50% down instead of the 20% we have. It is my nature or something.
You sound more Scottish than Welsh :)
 
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Last I figured it up, I was averaging about $1200/year to buy and maintain beater cars until they get to the point where I didn't feel like dealing with their problems any more. (Usually when the head gasket went, because you know you're going to find at least a few hundred in other stuff to replace when you tear the engine down that far.) So that's effectively a $100/mo car payment, but without the added expense of needing full coverage insurance, and with little more than annoyance at cosmetic damage others might do to the car.
 

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Two skinny J's
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Last I figured it up, I was averaging about $1200/year to buy and maintain beater cars until they get to the point where I didn't feel like dealing with their problems any more. (Usually when the head gasket went, because you know you're going to find at least a few hundred in other stuff to replace when you tear the engine down that far.) So that's effectively a $100/mo car payment, but without the added expense of needing full coverage insurance, and with little more than annoyance at cosmetic damage others might do to the car.
Do you live in a state with a state vehicle inspection? I know Md used to be able get by with running T total junk on the road. It was honestly scary to drive through Md and see the junk on the road...
 

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My cousin felt the same way as you do/did.
Some of the others gave some examples but if you rent for $800 a month and invest the interest at $2,000.00/ year or $167/mo. and I make a house payment of $800 a month and do the same and invest $167/mo. At the end of say 20 years our investment is the same. But you have, as explained, flushed $192,000 down the loo to the landlord. If your rent stays at $800 for 20 years. My house payment will not go up.
If I buy that house for $150,000 and in 20 years it has appreciated even a modest amount, providing it is a good property to begin with, it can easily be worth $250,000. I would be happy to sell it to you who has saved up the cash for 20 years for $100,000 more that you could have purchased it for 20 years prior.
My current interest rate is 2.6%. But I am paying myself not a landlord. And if appreciation out paces the loan rate you recover the tax deductible interest.
New cars and new books are the biggest losses out the gate.
People like Suzy Orman will tell you never finance a car. Always pay cash. That's great but if I could afford to pay cash I would be well off enough that I would not need Orman's advice. Cash gets me a beater. I need a reliable vehicle. Can't make the investment money it you can't work. I just don't buy new.
All businesses make money not just banks. They just don't give you anything tangible for the money. You don't mind the bosses making a profit at the bakery for a cupcake or scone customers could make at home, it pays your wages. Customers get something in return. With banks it seems like they are making money for nothing. But they also borrow money from the fed. so it's not all their profit, and also in return they give you money with interest for your investments you are making.
I think the biggest lesson to be learned here is that if you have your own house, you have a garage and maybe a basement. Which means bike storage and home workshop. Or you can knock out a wall and build a bigger living room to store bikes and bike related decor items. Not in a 2 bedroom apt. with one bath and a small living room and kitchen. You can't party like it's 1999 without the neighbors getting upset. And you don't want to raise a family in an apartment.
 

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Two "Slow" Spoke
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Em, one other thing you forgot to account for in your spreadsheet is inflation. It's the same reason that cars that used to average under $10K now cost more than $20K. Historically, the average annual inflation rate is slightly over 3%. That doesn't sound too bad until you realize that at that rate prices will double every 20 years. So using your rate of return of 3%, the investment gain you have made after 20 years would actually not keep up with inflation. You would have save enough money to buy a house after 20 years but that house you wanted will most likely cost more than what you have saved. On top of that, everything that you need to buy to make that house a home (furnitures, appliances, etc.) will also cost twice as much as if you had bought it 20 years ago.

You are right about not using credit for everything else other than buying a house.
 
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Discussion Starter · #34 ·
Thanks Rush and Tru both you like others have taught me a lot. This thread really has been valuable to me.
It is great to get so many life lessons from the experiences of others.
 

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Premium Member
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Thanks Rush and Tru both you like others have taught me a lot. This thread really has been valuable to me.
It is great to get so many life lessons from the experiences of others.
Oh, if you want to learn from the mistakes of others, you've come to the right place. :rolleyes: My kids are lucky to have a dad that has learned so many hard lessons for them.
 

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Hello there. Actually, taking loans is controversial. If you loan $1 and make $100 out of it, why not take a loan then? My friend works as a Mortgage Broker Bolton, so he sees many rich and poor people every day. Most rich people who come to him take out loans to buy some property and rent it out. That’s how they make money for their living. Mostly they own Real Estate agencies. Still, if you take loans just to buy some food or cars, then it makes no sense. Best wishes, guys. Wish you wisdom.
 

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Old, fat, and slow
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Man .... i saw the thread and thought "Cwtch is back!!!!!" ..... what a let-down.

Sorry, I 12Ride, but you aren't Cwtch ..... since she set off on her journey through the unknown she has been unknown around here .... would love an update ....

But yeah ... get a loan, buy a duplex, rent half, use the rent to pay for repairs and most of the mortgage. Sell it in 15 years and buy more. Or keep it and rent both halves and buy a personal home ... but after 20 years, you will need a new roof .... as Storm Ian pointed out to my wife and I. Fifteen years is about the optimal selling age.
 
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