No. of Recommendations: 1
As for the additional debt with having the car, yes it is a larger loan, but it is also my "dream car" which I will keep for the next 10 years. So when I pay it off at the end of next year, it will be a good investment over the long term. And I had enough of a down payment that the car loan is not upside down (barely).

I see credit in a range of shades of grey. House loans being good debt, cars and student loans being slightly less good but not necessarily negative, the personal family loan as not good, and credit debt as downright evil. Therefore my focus was on the credit cards first. When this last one is paid off, I will then pay off my mom and then the student loan and car in that order.


No one disagrees with paying out higher rated debt first, but shouldn't you stick to using a balance sheet showing your net worth instead of manipulating figures like this? One of the enduring lessons that many seem to teach is that to have wealth you have to start with wealth - somebody getting a 10% return on 40k makes $4,000; somebody getting 10% on 400k makes $40,000. Simple point, but instructive none-the-less.

Given market returns this year, that car purchase is going to cost you a heck of a lot more than you might imagine, especially when you consider that you are using after-tax money to make that purchase. To replicate that same 30k, you'd need to make 46k in a 30% bracket. Throw in another 3 to 4k you could have made in a tax-deferred plan this year (or in a Roth, or something of this ilk).

but it is also my "dream car" which I will keep for the next 10 years.

I'll admit that owning a depreciating asset which requires continual maintenance, fuel, insurance, and a tender loving care doesn't equate with the word dream, unless you are talking about a nightmare.

Different strokes...
Print the post  

Announcements

UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement