Are you financing or paying cash?

[Tractorat]

Even with the world economy in the toilet, oil only got down to around $70. Gas/diesel didnt go down at all when it was down $10. Now, its back up to over $80 and climbing. Since there is nothing to stop it now, I dont expect to even see $80 ever again. I remember a couple of people on this site saying they wouldn't mind paying $10/gal if it were drilled in the US. Well, at least a lot of it will not be drilled in the US (some will). But I think you will seeing $10/gal within the relative future. (BTW, if I remember where those posts came from, they were probably getting oil drilled in the US anyways).



With that said, I just dont see how the average guy can justify buying a brand new diesel truck. If you have to use it in your business, at least you might have some tax advantages. But just for a daily driver, or even to pull a trailer or camper, thats a lot of money to spend. I bought my truck brand new a week after 9/11 with the idea that it would last me as long as I needed to have a truck. If I wasnt able to pay cash for it, there is no way I would have bought it brand new. Even then, it was $30k. Of course, I did have a paid for trade in bringing my cash outlay to only around $15k

 

[EGroeneveld]

The average (or less) will walk into the dealership and only worry about the monthly payment. they will walk out with a $ 40,000 loan at 84 months and payment just under $ 600/month. That is how the average guy will do it.



Not everyone gets the loaded $50K version.

 

[tempforce]

downsizing

most people will have to downsize their expectations in life.
with all of the new taxes and high prices.
with the huge increase in energy prices, that are sure to come.
#@$%!
i am a firm believer of a 25% import tax on all products.
make it here, work here.
also cut all fed income taxes by 50%. for 10 years. then reduce it to 3%.
balanced budgets mandatory for the government.
off rant.....

 

[rbattelle]

i am a firm believer of a 25% import tax on all products.

Of course, that would immediately cause every other country to impose a comparable tax on our products.

So no one would be able to afford to buy import products. And no one here could sell their products overseas.

Repair parts for existing imported equipment here would become prohibitively expensive, so machinery would begin breaking down.

Since there aren't many machines made here anymore, we'd have to sit around and wait for factories to be (re)built with new domestically-produced machines. But those factories couldn't be built with imported parts, so we'd have to re-make most of our industrial infrastructure.

The first time we made the industrial infrastructure it took about 150 years. If we assume we're 3x more productive now (even without any imported parts), that means 50 years.

Let's be optimistic and arbitrarily cut that down to 15 years. Then for 15 years it would be more-or-less impossible to buy quite a lot of things - TVs, computers, machine tools, vehicles - or to have any of those things repaired at a reasonable cost.

Of course, since no one could sell their goods overseas (since other countries reciprocated our 25% tax), no one could make any money that way. So the only way companies could acquire the capital needed to build all the necessary infrastructure would be by selling to the American public at extremely high prices in order to raise cash fast enough.

And I'm not even mentioning the raw materials issues that come up! Imagine trying to build up a new country-wide production infrastructure without using any foreign raw materials.

Its like if you sold lemonade to your neighbor and he sold orange juice to you. One day, you get tired of your family buying only orange juice imported from your neighbor, so you impose a 25% tax on his orange juice. He then does the same to your lemonade. Now his family won't buy your lemonade anymore, and your family won't buy his orange juice anymore. Whereas before you were able to sell his family and your family lemonade, now you can only sell lemonade to your own family, effectively cutting your revenue in half. Not to mention your family hates you now because they can't get orange juice anymore. You want to start offering orange juice, but you need to raise the money to plant an orange tree and buy an orange press. So you have to jack up your lemonade prices in order to afford the new equipment. Now your family is really angry, and thirsty.

But what do I know, I'm no economist.

Ryan

 

[tempforce]

25% tax

of course your assuming we implement the tax in one big chunk. we got this way slowly. shifting our country from making items, to just buying items.
every year we go further in debt. as that happens the prices will go higher as our money becomes worthless. then we wont have the purchasing power to buy foreign products anyway.
so we have two choices, continue borrowing on our future or rebuild our ability to make products at reasonable prices.
both are hard realities. but to continue to follow the path we are in. is just like a person buying a million dollar house on a $20,000/ year wage. it just doesn't work. prices for foreign products must and will increase, so that our local products can compete, along with that we need to bring back companies that have moved off shore for cheap labor, low taxes and virtually no or low regulations.
why are so many companies leaving high tax states and relocating to low tax states, the same goes for the companies moving their operations off shore. lower the taxes and they will end up with more money from the increased tax base.
the percentage of younger people of working age, are making less money than people 40 years ago. adjusted for inflation and the cost of living.
that trend is only going to increase, i don't want that for my kids and grand kids. i would like them to have more opportunities to make it, than i did.
without making our business environment more friendly, i can't see the current and next generation supporting the lifestyle we are so used to.
we must become self sufficient, and world a competitor again.
a investment in making our own fuel and energy would be a large step in that process. along with that, is to build our manufacturing base, which can't be done, with cheep over seas goods available. you say we can't sell products over seas. cat is selling almost all that they can produce to overseas markets. they have a product that is needed and for a price better than other manufacturers worldwide.
i worked at a state employment department, and i saw the trend in the types of jobs available and the wages for those jobs. for 70% of the population the trend is not looking good.

one thing i didn't cover is the restrictions, taxes and regulations other countries already impose on our exports.
most of the free trade deals only made it easier to bring goods into the states, which made it easier to cut jobs.

 

[rbattelle]

of course your assuming we implement the tax in one big chunk.

True. But even implemented slowly, other countries will reciprocate. All I'm saying is, it's a mistake to assume that by legislating trade out of our system all our problems will go away. I can't recall any nation in all of history that managed to thrive without trade. Generally speaking, trade is good because competition is good. Americans have made their choice overwhelmingly - cheap Chinese junk rather than quality American goods. [Yes, the Chinese often produce goods using near-slave labor and without regard to the environment or safety, which may be considered unfair. ]



Those of us who appreciate quality American products just have to work harder to find them.



I understand your points about unsustainable debt, and I agree with you.



Ryan

 

[RollOver_Pete]

Other Peoples Money.



While it is noble to strive to have zero debt, sometimes in life as in business debt does pay...



What am I talking about? Zero Percent Financing.



That is how I bought my '05, which has 3 payments for $648. 00 left.



I put a chunk down from selling my '01 and Chrysler offered me 0% for the balance... 32K or so.



I had a choice, pay cash out of savings, or use Chrysler's money for the balance. It was a no brainer.



The money remained in my savings for emergencies. I was able to keep investing that money and if the monthly payments would have been too much to handle, I could have bucked up and paid the truck off early.



So, if you can swing the payments while using OPM, that is a very wise way to go.



Regards

This is exactly what I did.

It will be paid off Feb. of next year .

As for credit cards and the interest they charge?

I rid myself of that cancer shortly after ridding myself of the ex (plaintiff).

 

[JimB1]

Ncostello, Great discussion, "no silver bullet" remains the answer.



My two new rigs, '07 factory order, '06 new off the lot, both cash.



15 yrs ago, barely recovered from "splitting the pie", set my financial plan to get to retirement (currently retired) and buy two new rigs during last work year.



Kept my old gas Dodge iron, drove company rig most the time, I was service mechanic for elevators so took every overtime callback I could, used credit cards for convienience and paid-off in full every month.



The saved paychecks went into CD's, while saving $$$$ thoroughly study what the item is you're planning to buy.



Plenty research for the purpose of cash purchase is a mental clarifying exercise, you might not be so aware of 'til stick hand in pocket pull out greenbacks... , hmmm. . , is it what I really want?



That's a hugh unmeasureable about saving and spending cash, the last moment pause before greenbacks depart hand.



In my elevator work career I can recall about 3 clear cycles of boom/bust.



Boom times toys show up everywhere, bust times. . everything lost, pennies on the dollar re-couped.



Each cycle the few conservative spenders continued to advance at our slower steady pace and were paying off the big ticket items you're supposed to be doing at that time of your life, just like Ncostello is doing right now.



Well, just keep turning the crank few more years, give the '91 a smooch-she's still the gal, and when you come much closer to having the price saved you'll know when to deal... ,



There's no silver bullet for responsibilty. Get on a disciplined path and stay there.



There's some other guys posting here that are doing just that and it works.



Jim.

 

[Ncostello]

NCostello is obviously a very intelligent, prudent individual. I have every confidence he will be just fine, without the need to adhere strictly to Ramsey's teachings.

Thanks Rbattelle! Nobody ever gives me credit like that (no pun intended, lol). I appreciate it!



I listen to Dave on the radio at work. However only for about a year or so. And I do believe that many things he says is good advice. But I don't apply it all to myself. I guess mainly because some of it is very impractical for me. I do have ALOT of self control with my financial life. He'd probably tell me I'm making excuses... but again he doesn't know me personally.



In general... I do what he talks about. And I've never had any problems. Some of these fools that call him are almost laughable. They call and complain because they have 100K in school loans, 85K in credit card debt, 40K in car loans, a 300K home and a job making 50K... and they wonder why they are having trouble month to month. To me... it takes alot of time to get in those situations. I'm one of those who can quickly tell that I'm digging myself in a hole and I remedy the situation before I'm in 8' deep. Unlike some of these callers who act like yesterday they were debt free and today they woke up and all this debt came in last night.