Market Madness?

prinex said:
Interest rates also plays a big role, suppose you had a mortgage on a house paying 4-5%, now is down to 1% or so. More money to spend financing a boat that - what coincidence - also has a 2% interest rate only. Win-Win ! And your house is worth 50% more so let's do it !

Until inflation starts to rise again (or better is forced to rise by the central banks) and suddenly you will find yourself with the bank at the door and no money to pay the plastic toy. Already Germany had 4.4% inflation projected on 12 months based on the rise in fuels etc. The enormous amount of cash sitting around needs to be wiped out and inflation (or world war which is tiresome) is the best weapon.

A correction will come and boats / luxury cars / holidays villas are first in line to fall. Of course timing is difficult but I guess 2 years max. Better 3 so we can have more choices in buying used boats.
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Interesting but buying a luxury product like a boat on finance is total madness in my world and how I was brought up. If you aint got the spare cash to buy such and item then don't
 
Bigplumbs said:
Interesting but buying a luxury product like a boat on finance is total madness in my world and how I was brought up. If you aint got the spare cash to buy such and item then don't
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Yes of course old 10% rule - this is how much of your assets worth you can squander in such an adventure.
People also buy on credit thinking they rather pay 2% interest and make 10% on the money so this can make sense.
For me is "never make a deal that give you sleepless nights" so is cash and 10% rule for me.
 
Bigplumbs said:
Interesting but buying a luxury product like a boat on finance is total madness in my world and how I was brought up. If you aint got the spare cash to buy such and item then don't
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How is buying a boat on finance madness In your opinion?
As someone who has bought this year using finance for 95% of the purchase price I am intrigued as to why I am mad.
Every day is a school day and am happy to listen to informed advice
 
Bigplumbs said:
Interesting but buying a luxury product like a boat on finance is total madness in my world and how I was brought up. If you aint got the spare cash to buy such and item then don't
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Or alternatively only take on debt that you are confident that you can service.
We could never have afforded a boat when we first bought but judicious use of equity in the house created a fantastic family pastime that our kids loved as they grew up and we have so many happy memories. If that is madness then perhaps losing one’s marbles isn’t all bad! ?
.
 
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Bigplumbs said:
Interesting but buying a luxury product like a boat on finance is total madness in my world and how I was brought up. If you aint got the spare cash to buy such and item then don't
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I can afford to pay cash for my new boat but ive been advised to finance it. That way my cash can be earning me interest elsewhere.

Im getting 10 year loan but im planning on selling it after 2 years anyway.

Hopefully i'll break even but may lose some money through depreciation but 2 years of boat fun would be worth losing a small amount of cash.

There's also the option to trade it in for a new model.
 
Oh god I’ve missed this forum. Doom mongers predicting the end of the world just as our chancellor increases growth rate predictions to 6.5% and school playground economics trying dissect the relative merit of using finance when buying a boat.

The fact is everyone has different circumstances so there is no one size fits all solution. If your house is all paid for, your pension maxed out your kids have finished education, are working and living in their own homes whilst you pull in 2,3,4 or even 5 big bills a year then I’d say it’s pretty safe to ditch the “10% rule”.

If you don’t you’re either going to die the richest man in the street or you’re going to keep a Columbian farmer very busy as you tote through his marching powder with your err…. Nieces ?

Buying boats is a niche hobby. It doesn’t affect the 50th percentile, it is for the 99th percentile. A tiny tiny element of our mixed and marvellous society. As such you can’t apply rules unseen over the t’internet.

??
 
henryf said:
Oh god I’ve missed this forum. Doom mongers predicting the end of the world just as our chancellor increases growth rate predictions to 6.5% and school playground economics trying dissect the relative merit of using finance when buying a boat.

The fact is everyone has different circumstances so there is no one size fits all solution. If your house is all paid for, your pension maxed out your kids have finished education, are working and living in their own homes whilst you pull in 2,3,4 or even 5 big bills a year then I’d say it’s pretty safe to ditch the “10% rule”.

If you don’t you’re either going to die the richest man in the street or you’re going to keep a Columbian farmer very busy as you tote through his marching powder with your err…. Nieces ?

Buying boats is a niche hobby. It doesn’t affect the 50th percentile, it is for the 99th percentile. A tiny tiny element of our mixed and marvellous society. As such you can’t apply rules unseen over the t’internet.

??
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Totally agree. I rejoice in spending mine (and the bank's) money to enjoy this hobby. Last thing I care much about is affordability. I probably would never have started if I thought that boats were cheap entertainment.
 
Martxer said:
How is buying a boat on finance madness In your opinion?
As someone who has bought this year using finance for 95% of the purchase price I am intrigued as to why I am mad.
Every day is a school day and am happy to listen to informed advice
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Buying on finance very often encourages people who can’t control their spending to live way beyond their means and when and if something bad happens that reduces their ability to fund the finance the sh1t hits the fan.

My father who was only ever a farm worker on very modest income never in all his life bought any thing what so ever on Finance. He built his own house with his bare hands, lived a very full and happy life and raised 3 children with values that I follow today. If you were taught differently then fine. I know however where finance can finish up and have had to bail out 2 friends who got into terrible trouble through finance.

The only thing I personally have bought on finance is our house. Would I consider anything else Never.

These are very traditional solid values that hold true today But of course people don’t like them because of the want want got to have it now attitude even though they very often know they can’t afford it.
 
ShaneAtSea said:
I can afford to pay cash for my new boat but ive been advised to finance it. That way my cash can be earning me interest elsewhere.

Im getting 10 year loan but im planning on selling it after 2 years anyway.

Hopefully i'll break even but may lose some money through depreciation but 2 years of boat fun would be worth losing a small amount of cash.

There's also the option to trade it in for a new model.
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Me thinks your 2 year plan if you are buying now could cost you quite a bit (which of course you might easlily afford).

you could well be buying when the market is at its peak and in 2 years time when many people realise some of the truths about boating not being Completely like the lifestyle mags portray and perhaps foreign hols are back in full swing the market could be flooded and prices at an all time low.

this may not of course worry you only you know that
 
Greg2 said:
Or alternatively only take on debt that you are confident that you can service.
We could never have afforded a boat when we first bought but judicious use of equity in the house created a fantastic family pastime that our kids loved as they grew up and we have so many happy memories. If that is madness then perhaps losing one’s marbles isn’t all bad! ?
.
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Provided you know you can service the debt then yes. It is when people think they can service it and then stuff happens that the problems occur.

The line between know and think blurred by want and now can be a very fine line
 
ShaneAtSea said:
I can afford to pay cash for my new boat but ive been advised to finance it. That way my cash can be earning me interest elsewhere.

Im getting 10 year loan but im planning on selling it after 2 years anyway.

Hopefully i'll break even but may lose some money through depreciation but 2 years of boat fun would be worth losing a small amount of cash.

There's also the option to trade it in for a new model.
Click to expand...
Will you be getting higher interest on your savings than the interest you'll be paying on the loan. If so, please let me know where.
 
henryf said:
Oh god I’ve missed this forum. Doom mongers predicting the end of the world just as our chancellor increases growth rate predictions to 6.5% and school playground economics trying dissect the relative merit of using finance when buying a boat.

The fact is everyone has different circumstances so there is no one size fits all solution. If your house is all paid for, your pension maxed out your kids have finished education, are working and living in their own homes whilst you pull in 2,3,4 or even 5 big bills a year then I’d say it’s pretty safe to ditch the “10% rule”.

If you don’t you’re either going to die the richest man in the street or you’re going to keep a Columbian farmer very busy as you tote through his marching powder with your err…. Nieces ?

Buying boats is a niche hobby. It doesn’t affect the 50th percentile, it is for the 99th percentile. A tiny tiny element of our mixed and marvellous society. As such you can’t apply rules unseen over the t’internet.

??
Click to expand...

100% to the above.
Views of what is actually important in life changes , especially when the vice like grip of money relents a little.
At some point a cheap calculator will give you the probable hours you still have left to boat.
Looking round for a boat at the moment, five years ago sellers would have been desperately grateful to get 75 % of what their boat could achieve today .
However on the up side the impetuousness of youth (and other things :) ) has thankfully long gone , replaced with cash and patience , far more useful tools to overcome silly asking prices.
 
Irish Rover said:
Will you be getting higher interest on your savings than the interest you'll be paying on the loan. If so, please let me know where.
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Mainly day trading, Bitcoin and government treasury bonds.......I dont put my money in banks.

Im not buying my boat till next year at the earliest anyway. Not until the UK & USA announce that the pandemic is officially over. I unfortunately missed the Fort Lauderdale boat show but im definitely going to Dusseldorf in January

(y)
 
If you have the cash financing is very often a smarter option as it does not bind your capital, who is not going to get 1% loan and keep the cash. So if have 1 Mio anyway and finance a 1Mio boat 100% the 10.000 you are going to pay in interest are a small price to pay in order to keep your liquidity.

Is the one that don't have the money and buy the 1Mio boat / 100K car that get in trouble if things go bad. Or people with very price-sensitive asset classes (eg. a CEO with options that are locked for a few years, or shares that cannot be sold for a certain amount of years), they look multi-million on paper but can go to zero very quickly.
 
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