'Good' debt vs. 'Bad' debt
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| Mon, 08-30-2004 - 9:50am |
Some nice lady would come on the board and say, 'oh dear, I owe $xxx for my brand new lincoln continental, and $xxx for my new vacation villa in Spain' and I'd say to myself, 'lady, get over it'.
Here I am though, debt free for months, and buying a new car. 'Oh dear, I'll have debt again'...tee hee hee!
According to Jerrold Mundis though, this is 'good' debt, because my car is the collatoral on the loan. If I don't pay, they get the car back. So it's more of a swap than a debt. Swapping a loan for a car.
It's still debt to me though, and I want to wipe it out as fast as I can, so I'll be snowflaking my dance income to the car payments. Car payments!?!?! I haven't had a car payment in 4 years!! ugh...
Glad to be back??
Have a great day,
Lee Ann

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WEll, you can always think of it as debt to help your credit? lol. But I hear ya. I don't want ANY debt, but I tell ya, having had 4 car loans, is a blessing. Mostly because it makes my credit look awesome and I can get some GREAT lease deals with that info. lol. Have a mortgage is great too. Shows I had one, and paid it off.
Good luck with the snowballing of your car payments.
I know for myself, I'll be leasing for the rest of my life, so I'll always have that debt. lol.
~Cher
Translation...buy a Mercedes Benz or another type of car that holds it value. Bah haww haaw. ;) Just kidding. But there is something to be said for buying under blue book value and buying a car with a good reputation that will have good resale value.
I think it's sort of neutral debt. I think of bad debt like credit cards, with nothing at all to show for it. Neutral means you have something to show for it, although it's worth about what you owe. Good debt is debt for something that will increase in value or pay off over time, like real estate or *maybe* your education if it helps you earn more or if it increases the quality of your life.
Now where do the new windows that I want fall?? :) Will they come rip those out if we can't pay for them? Are well-insulated windows "good" debt and a remote control skylight "bad" debt? :)
Edited 8/30/2004 2:14 pm ET ET by zaboz
Welcome???? back.
Becky
CL of 4th, 5th & 6th grade Scoliosis
Can you save up a bunch for a good-sized downpayment? Or to outright buy the car? The power of cash is great, the power of financing not so good. I agree with Zaboz-too many times people get stuck with a car that they owe more on than it's worth, which doesn't sound like a great thing to me.
Good luck to you-yeah, that Mercedes *does* sound good!
Lisa :)
Lee Ann
Lee Ann
www.werenotafraid.com
I did manage to save up $500, rather painlessly too! Every month I just put $35 into my ING Direct account, and when I looked at it the other day, there was $500 in there!
I also took half a $10K inheritance, so I'm putting $5K down on the car. They wouldn't give me anything for a trade in because my old Saturn has so much mileage, so we'll try to sell it for a couple of weeks, then donate it and take the tax deduction if it doesn't sell. Book value of my old car is $2,090, and we're asking $1,550, so we hope it sells fast. I posted it for sale on boston.com, and cars.com.
I don't know what book value of my new car is, but my loan will be $17K, or $338/month. I was putting $340 into Savings every month, so worst-case, I'll skip a savings deposit. I don't think I'll have to though, the car payment is only a little over 6 dance lessons taught. The new housecleaners I hired are 5 dance lessons taught, so teaching 11 lessons/month will pay for my new luxury items no problem. I've already got 15 lessons booked for September. Now that I have a 'quota' to fill, I may actually have to do some marketing, ha ha ha!!
Have a great day,
Lee Ann
Lee Ann
www.werenotafraid.com
You don't know the blue book value of your new car??
Have you checked out www.kbb.com? You can find it there
and be sure you're not paying too much.
Let's see...2005 Mercedes Benz...just kidding!
But I know I didn't pay too much, because I got a Saturn. I pay the MSRP plus a $625 fee. They make buying a new car the pleasure it should be. :-)
Lee Ann
www.werenotafraid.com
In your first message you said you remembered coming here in $24k worth of debt and are now debt free. Well, until you get the car.... :-)
What did you do to get out of debt and how long did it take?
Just curious.
~Nancy
I'm pretty sure we're going to drive it until it just won't go anymore, but from what I understand, it may be awhile! I think we just got past 107,200 miles, and it's a '96. Of course, it *does* sound remarkably like a couple of hamsters and a squirrel... :D
Lisa
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