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Old 10-06-2019, 01:05 PM   #21
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I read a statistic once that 68% of males go through a forced job change in their mid 50’s, and never financially recover. That was a shock to me, but you hear about it all the time. We are replaced by younger people making 2/3 our salary in what the companies that we were loyal to call a “corporate restructuring”.
That's rough. Happy to pay my union dues
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Old 10-06-2019, 01:09 PM   #22
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Being a union member is no guarantee.
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Old 10-06-2019, 01:10 PM   #23
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We have done both - paid for some outright and financed some.
Choices were made based on the financial numbers and likelihood of which was a better fit.
That is the way my wife and I have been with all financial decisions in life.
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Old 10-06-2019, 01:25 PM   #24
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Being a union member is no guarantee.
I agree...too many variables, but it would decrease the odds, depending on said variables...
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Old 10-06-2019, 01:41 PM   #25
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I read a statistic once that 68% of males go through a forced job change in their mid 50’s, and never financially recover. That was a shock to me, but you hear about it all the time. We are replaced by younger people making 2/3 our salary in what the companies that we were loyal to call a “corporate restructuring”. That never happened to me, but it did happen to several friends, and they were unprepared
The cutbacks are sometimes even more insidious than that. Companies are well prepared to do the minimum compliance with ADEA (Age Discrimination Employment Act). It states that in a major reduction the impact on those over 40 must be proportional to those under. So, you have a group of 1000 workers of whom 300 are over 40. You're going to reduce 100 workers and that would say you can't reduce but 30 who are over 40. Now, there's an allowance and the number is really 37 (80% rule and 80% of 37 is 29.6 so it passes. Companies will sit down and find the highest paid and will even sit and say "to get rid of these three also then how many under 40 do we have to choose?"

Also, the savings. It's not to just someone costing 2/3 as much. The new hire is often at the lowest level so they terminate someone making $100k, let existing people all along the line move up in responsibility and hire an entry level person at $30k. Savings of 70%.

Companies can manipulate themselves to fairly easy compliance. Oh, and the granting of severance is another little trick they use. "We'll pay you three months but you must sign this agreement foregoing any rights to sue. Oh, and we'll give you an additional $500 to forego your rights to sue under ADEA (law requires additional payment for that)." Most people are going to sign and take the money.

Loss of employment is a real risk. One other huge risk, a major medical event. Could be illness or from accident or anything, but quickly run into the hundreds of thousands of dollars. 66.5% of all bankruptcies cite medical bills as one of the causes. Your home is protected, not your boat.

We have best friends who were neighbors in NC and moved with us to FL and work for us now. I saw the devastation in their lives. They'd both worked for the same company for over 30 years. He'd had moderate pay and she'd had low pay. They were 53 and 51 when the company shut down. They couldn't even get job interviews. When they did, they didn't get the job, hearing "Over Qualified" much too often and other times just being passed over for someone younger. He was in charge of buildings and construction and all maintenance over 6 buildings that housed manufacturing facilities (700 employees) and one with offices and Office Depot and Lowes wouldn't hire him for fear as soon as he found something better he'd leave. She was told by a recruiter that the reason one company turned her down was hiring younger so it didn't impact their insurance costs as much. Illegal but common. They had 13 years remaining to retirement so spending their savings and were planning on selling their house. Losing a job for someone over 50 can be devastating.
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Old 10-06-2019, 01:43 PM   #26
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I was lucky when I bought our boat. It was in Detroit, our country was at the bottom of the recession, unemployment in that area was running about 33% and people were giving away toys just to get out from under the payment. The brokerage I bought it from had picked it up almost 2 years prior from a bank auction, figuring they would flip it and make a killing.


After 3+ months of negotiating with the selling broker (Oh, BTW, did I mention that I'm a trained hostage negotiator and love to dicker?) I was able to buy the boat for about 50% of what its market value was at the time. I put about 50% down, financed 50% of what I had paid for it, then paid cash for about $50K worth of additional equipment and upgrades.


So now I have a few years left on a 15 year loan. The current balance runs about 20% of what the value of the boat is. I have enough assets that if I wanted to pay the boat off I could do that, but the money I have invested is earning more than that the interest rate on the boat loan is. Why pay it off early?


I would never suggest to anyone that they take out a mortgage on their home to buy a boat or any toy. Sh!t happens and if it did, I'd feel much better about giving a toy back to the bank than I would giving my home back to the bank.


We have one long cruise planned for the boat and after that is done the boat will be for sale. We'll take the proceeds from the sale and buy some sort of an RV and go land cruising.
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Old 10-06-2019, 01:57 PM   #27
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Financed, because we had just started to look for a retirement boat when we came across the NT we ended up purchasing. We were 5/6 years from wanting to make a purchase, but we were given a deal we just couldn't refuse. And like others have said the loan rates are lower than the interest we are making.
We have been doing all our own repairs with the boat on the hard at our house. When the repairs are finished we will keep the boat at our dock on a lift, so no monthly slip fees.
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Old 10-06-2019, 02:54 PM   #28
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My wife and I waited almost 20 years before getting into larger boats so that we could pay cash, no loans. Prior to that our focus was on our kids, paying a mortgage, and then surfboards and kayaks, and rides on my buddies center consoles for the fun stuff. With that said, our kids were in high school when we got back into boating 9 years ago. We therefore only had a couple years with them on the boat before they headed off to College. As is often the case, + and -, with these type of decisions.
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Old 10-06-2019, 03:38 PM   #29
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I was lucky when I bought our boat...our country was at the bottom of the recession, unemployment in that area was running about 33% and people were giving away toys just to get out from under the payment.
Must have been about the time we bought our boat.

Low boat prices in Washington State and Alaska squeezed prices lower in BC. The previous owners were looking at heading into their 4th winter trying to sell Badger at what was probably an emotionally based asking price.

We paid market rate and they saw the boat go to a local family with a young daughter...everyone was happy and have stayed friends.
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Old 10-06-2019, 06:02 PM   #30
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Loss of employment is a real risk.

I find this ironic that if you work for someone else and have a W-2 to provide a source of financing it is much easier to get approved than if you are self employed. I have a business in continuous operation since 1930 (I'm the 3rd owner) and it doesn't matter.
I would have been the LAST person laid off at my business.
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Old 10-06-2019, 06:59 PM   #31
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I am fortunate and unfortunate. My condo is paid for. Until I bought this boat, I had nothing to write off except for health insurance. My assets are tired up in stock. IF I were to sell stock to payoff the boat, 25% would go to taxes. So once a month the finance company withdraws their payment. Because my boat still qualifies as a second home under federal guide lines, I can still write off the approx $7K each year for home mortgage.
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Old 10-06-2019, 07:07 PM   #32
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I am fortunate and unfortunate. My condo is paid for. Until I bought this boat, I had nothing to write off except for health insurance. My assets are tired up in stock. IF I were to sell stock to payoff the boat, 25% would go to taxes. So once a month the finance company withdraws their payment. Because my boat still qualifies as a second home under federal guide lines, I can still write off the approx $7K each year for home mortgage.
I'm assuming since you live where you do then you're able to itemize because of property taxes and that allows you to get the full benefits of the $7k. As more people are led to standard deductions instead of itemizing, this mortgage benefit becomes less of a factor.

I was recently talking to a young employee being pushed to buy a home. She was being told that she'd have this great deduction. Just one problem. With her standard deduction of $12,200, she wouldn't benefit at all until her interest and property taxes exceeded that. So the benefit was only her tax rate times the excess. In her case the interest in year two was going to be $8,000 and her property taxes $4,000 so absolutely no tax benefit.
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Old 10-06-2019, 09:19 PM   #33
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If you want a broader representation of circumstances, then I'd suggest a poll so people can answer anonymously.

Thought I'd started this as a four question private poll. However, after I'd filled out the poll questions and hit submit - this the way the thread turned out.
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Old 10-06-2019, 09:22 PM   #34
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Own ours outright, we don't like to finance toys , and it keeps us within our budget when making a decision on these type of purchases.

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Our views exactly. We have never financed a boat.
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Old 10-06-2019, 09:25 PM   #35
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Thought I'd started this as a four question private poll. However, after I'd filled out the poll questions and hit submit - this the way the thread turned out.
Clearly you didn't hit the attach poll question or something. I had that problem many times. My wife is much better at it than I am.
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Old 10-06-2019, 09:38 PM   #36
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Clearly you didn't hit the attach poll question or something. I had that problem many times. My wife is much better at it than I am.
Good, smart wives are great to have!!!
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Old 10-06-2019, 09:48 PM   #37
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I think it really depends on where you are and what your doing with it. Say someone in their mid forties vs someone in their mid sixties might have a different point of view. Someone entering into retirement vs continuing to work. Someone looking at a 40k bucket vs someone looking at the latest 1.5m work of art on the water. What their portfolio looks like and their current returns.

I am going to be using it for business and my business is going to be paying the note. Wait another year and I'd have enough to pay cash but wouldn't want to do that because my returns are better than the note is costing.

It's a very personal decision based off many of other outlining issues.
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Old 10-06-2019, 10:18 PM   #38
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I'm assuming since you live where you do then you're able to itemize because of property taxes and that allows you to get the full benefits of the $7k. As more people are led to standard deductions instead of itemizing, this mortgage benefit becomes less of a factor.

I was recently talking to a young employee being pushed to buy a home. She was being told that she'd have this great deduction. Just one problem. With her standard deduction of $12,200, she wouldn't benefit at all until her interest and property taxes exceeded that. So the benefit was only her tax rate times the excess. In her case the interest in year two was going to be $8,000 and her property taxes $4,000 so absolutely no tax benefit.
Yes, this is the first year we did not itemize. With the standard Deduction now at $24K for a couple you need some serious personal deductions to exceed that number.
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Old 10-06-2019, 10:44 PM   #39
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Yes, this is the first year we did not itemize. With the standard Deduction now at $24K for a couple you need some serious personal deductions to exceed that number.
I was actually answering Old Dan, but that's the catch is most people can't itemize now or if they do they're only getting a very small benefit. That changes the equation of cash vs. mortgage. Eliminates a lot of benefit of home ownership as well.
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Old 10-06-2019, 10:46 PM   #40
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I financed about 80%. I found a good deal a lot earlier than I'd expected, and I just couldn't pass it up. I was 'ready' mentally, but slightly less so financially. I couldn't afford to pay cash. I had some cash on hand, some equity in my house, and was able to secure financing at a rate I was comfortable with, so I went for it.

My house will be going on the market within the next few weeks, and I'll put the proceeds toward the boat loan, and pay off the vast majority of it. I can have the remainder paid off at a comfortable pace within 2-3 years. Absolute worst case scenario, the market takes a dump tomorrow and nobody buys my house. I can still afford both. I'd rather not, but I can handle it.

I'm not a genius when it comes to managing money. Every time I try to learn more about investing, my eyes just glaze over, and I slowly start to lose consciousness. I'm sure there are many people who would say I'm being dumb. I'm okay with that. I'm going after the dream, and at 35, if I screw it all up, I should still be able to recover. In the end, I think I'll be glad I didn't wait until I could pay cash. I may not live that long!
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