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Author: MoMoneyMoMoney Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: When can I start buying toys???? Date: 7/10/1998 10:31 AM
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As a 27 year old single male, I am having a hard time decideing when I can start buying "toys". Specifically, I WANT A BOAT FOR SALMON FISHING!!!!! I've been maxing out my 401k for 2 1/2 years, as well as three years worth of IRA contributions set aside. All these investments are in aggressive equity funds (mostly domestic with a small percentage allocated to international investments). I also own a house with a 75% LTV (loan to value) mortgage @ 7.25% no points. I recently paid off my truck, and will have some extra money to set aside. I have chosen an Oppenheimer G/I fund (my most conservative investment to date) and will start a systematic contribution out of my checking account later this month. HOWEVER, I have not designated what I want this money to go to (ie. subconsiously, I want to purchase a boat).

My question is this... Am I saving enough for retirement, and, if so, is it too early for me to start collecting "toys"??? If I'm not saving enough for retirement, should I be more aggressive with this extra $$$$$$$?

thanks,

MM

Oh yeah, I almost forgot to add this... I work for a bank and have "almost immediate access" to emergency cash via a personal loan (should I ever need it, knock on wood). I don't have hardly any liquid cash/cash investments though, as I have been funding my retirement savings like a mad man. Should I rely on the bank to loan me emergency funds (I'm planning on long term employment here) or should I save up the much talked about "six months worth"???
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Author: DownwardSpiral One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4344 of 75340
Subject: Re: When can I start buying toys???? Date: 7/10/1998 11:23 AM
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Re: Buying a boat "toy"---

Studies have shown that you should find a neighbor, relative, or friend with the boat that you want, and buy them unlimited amounts of beer and fuel, and you will still come out ahead vs. getting your own boat.

An alternative is to take your saved boat money, go out to the end of the dock, and cast it upon the waters--it's quicker that way.

Good Fishin'!

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Author: MoMoneyMoMoney Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4348 of 75340
Subject: Re: When can I start buying toys???? Date: 7/10/1998 12:03 PM
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Hehehehe very funny!!!! However, I'm serious about this. I've been living on carpet lint and Raman Noodles for three years to save like I am so that I can afford these "toys" eventually.

However, I can appreciate your humor... Thanks

MM

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Author: ZBar Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4354 of 75340
Subject: Re: When can I start buying toys???? Date: 7/10/1998 2:43 PM
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Toys like a boat, not unlike a house, cost much more than the purchase price. The trailor, boat slip, maintenance, storage, etc. can more than double the price of a boat over a period of years.

Buy a good educational book, or get a membership at a health club to get in better shape to enhance your lifestyle instead of looking for toys to increase your spending habits.

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4359 of 75340
Subject: Re: When can I start buying toys???? Date: 7/10/1998 3:59 PM
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MoMoneyMoMoney,

<<As a 27 year old single male, I am having a hard time decideing when I can start buying "toys". Specifically, I WANT A BOAT FOR SALMON FISHING!!!!! I've been maxing out my 401k for 2 1/2 years, as well as three years worth of IRA contributions set aside. All these investments are in aggressive equity funds (mostly domestic with a small percentage allocated to international investments). I also own a house with a 75% LTV (loan to value) mortgage @ 7.25% no points. I recently paid off my truck, and will have some extra money to set aside. I have chosen an Oppenheimer G/I fund (my most conservative investment to date) and will start a systematic contribution out of my checking account later this month. HOWEVER, I have not designated what I want this money to go to (ie. subconsiously, I want to purchase a boat).

My question is this... Am I saving enough for retirement, and, if so, is it too early for me to start collecting "toys"??? If I'm not saving enough for retirement, should I be more aggressive with this extra $$$$$$$?>>

You can answer that for yourself. If you have a clear idea of how much you're trying to amass for retirement, then you should know if you're saving enough. Why not read the 13 Steps to Foolish Retirement Planning and look at the retirement calculators? Both should help you determine what you need to do.

Regards….Pixy



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Author: CodyZen One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4361 of 75340
Subject: Re: When can I start buying toys???? Date: 7/10/1998 4:02 PM
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>>My question is this... Am I saving enough for retirement, and, if so, is it too early for me to start
collecting "toys"??? If I'm not saving enough for retirement, should I be more aggressive with this
extra $$$$$$$?<<

MoMoneyMoney,
Only you can answer this question! You need to develop a financial plan that includes when you plan or hope to retire and includes a savings and investment program that funds the lifestyle you hope to lead when you retire, for as long (or perhaps a little longer) than you expect to live. You also need to decide if you want to leave any significant amount of money to heirs or charities, or do you plan to leave this world close to broke.

Personally I think it is a sin to die rich, in that you should get to see and enjoy the benefits of those hard earned wages, even it you do give the money away instead of spending it on yourself.

You can do a quick financial plan on a spread sheet that estimates your expenses each year, your income, what you will put away, and investment income. Be sure to include inflation, pay raises etc. Once you've built the spreadsheet, it will allow you to start looking at what happens if you invest the money now or later. You'll also be able to track it over time to see how you are doing against the plan. This plan will tell you if you can buy the toys now or if you need to wait until later.

I've used this approach for nearly 20 years, and it has allowed me to feel comfortable that I will be able to retire at 50 even though I've purchased a few toys along the way.

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Author: Helter Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4367 of 75340
Subject: Re: When can I start buying toys???? Date: 7/10/1998 5:35 PM
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CodyZen said:
<<You can do a quick financial plan on a spread sheet that estimates your expenses each year, your income, what you will put away, and investment income. Be sure to include inflation, pay raises etc. Once you've built the spreadsheet, it will allow you to start looking at what happens if you invest the money now or later. You'll also be able to track it over time to see how you are doing against the plan. This plan will tell you if you can buy the toys now or if you need to wait until later.>>

I'm a 26 YO male in similar shoes, and I've got my little spreadsheet going, and its great fun. I play with it regularly. I've made it quite flexible and its month by month, so I can say if I get x%(I divide it by 12, I realize this compounds out a little higher) I can also vary inflation. Its fun to see the number when I put 11% in there(as an ANNUAL return). I can email you mine, if you like.

point 2: If you haven't yet, read The Millionaire Next Door(hint - most wealthy people live modest lifestyles) that said, I'm shooting for multimillionaire status by age 50, and I plan on enjoying it. Its easy all I need is for SAP software to remain HOT for another 5 to 10 years(or of course retrain myself on the next hot thing).

Starting early like us, My calculations show that I can STOP investing/saving completely at age 40 if I stick to my plan and retire comfortably at age 50(of course I still haven't figured out how to figure health insurance cost in).


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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4386 of 75340
Subject: Re: When can I start buying toys???? Date: 7/12/1998 11:20 AM
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<<Specifically, I WANT A BOAT FOR SALMON FISHING!!!!! >>

Boat: A hole in the water which you pour money into.
Why don't you see if you can rent or lease this boat for a while.


<<... I work for a bank and have "almost immediate access" to emergency cash via a personal loan >>
No you don't.
There is a big diffrence between saying "Send me a check for my money" and "Please lend me some of your money."

<<I don't have hardly any liquid cash/cash investments though, as I have been funding my retirement savings like a mad man. Should I rely on the bank to loan me emergency funds (I'm planning on long term employment here) or should I save up the much talked about "six months worth"??? >>

Try this experiment: Pretend that you got into a car accident, put a pregnant woman into the hospital, and just got a call from her lawyer threatenting to sue you for every penny you own. How much money would your bank loan you in this circumstance.

No matter what your plans for long-term employment are, your plans have little effect. If your bank gets bought out, you could be on the street in two days. Do you think *anybody* plans to get fired?

Save your own money.

Ray


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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4387 of 75340
Subject: Re: When can I start buying toys???? Date: 7/12/1998 11:25 AM
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<<Hehehehe very funny!!!! However, I'm serious about this. I've been living on carpet lint and Raman Noodles for three years to save like I am so that I can afford these "toys" eventually.

However, I can appreciate your humor... Thanks

MM >>

Sad to say, but he WASN'T making humor--he was serious. And right.

The time to buy these toys is when you can pay for them with pocket-change.

I have known many friends who bought boats. After the first year or two, they barely get used. But the finance company demands the payment each and every month.

Ray

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Author: DownwardSpiral One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4397 of 75340
Subject: Re: When can I start buying toys???? Date: 7/13/1998 11:04 AM
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<<
<<Hehehehe very funny!!!! However, I'm serious about this. I've been living on carpet lint and Raman Noodles for three years to save like I am so that I can afford these "toys" eventually.

However, I can appreciate your humor... Thanks

MM >>
Rayvt replied:

Sad to say, but he WASN'T making humor--he was serious. And right.

The time to buy these toys is when you can pay for them with pocket-change.

I have known many friends who bought boats. After the first year or two, they barely get used. But the finance company demands the payment each and every month.

Ray
>>

I was kidding, Ray. There is a lot of truth to the reality that boats can be very expensive. However, a hobby can usually be funded reasonably by using common sense.

Saving for hobby purchases and buying resonably is, to me, what lifie is all about. What are you living for, if not to enjoy yourself? Many hobbies involve some expense--fishing, hunting trips, woodworking, vacations, helping Habitat for Humanity. the trick is to keep a balance between necessary expenses, savings, retirement planning, and recreation/hobbies.

If you keep your wits about you, MM, go for the boat.

DownwardSpiral

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Author: JMolnar Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4400 of 75340
Subject: Re: When can I start buying toys???? Date: 7/13/1998 3:51 PM
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I agree that it's important to strike a balance - you need to save for your future financial security, but you should also enjoy life now, too - after all, it IS very short.

Anyway, here's an idea you might want to consider: find a friend or two (or three) who would partner with you to buy the boat. My family did this when I was a kid - we bought a little 16' sailboat with two other families and divided up the weekends among us. Of course, this strategy requires the right partners, but it worked out well for us. We really enjoyed the boat and yet we were able to split the operating costs (insurance, mooring fees, etc.) and maintenance (the yearly fiber-glassing was much more fun because we essentially had a "party.")

Another variation on this theme would be to find someone with a boat and trade "sweat equity" for time in the boat. My father, who is semi-retired, found a neighbor with a 40' sailboat and "volunteered" to help him maintain it and crew it on overnight trips. The guy who owned it got free help from an experienced sailor, and my Dad made out like a bandit.

I guess the moral of my story is that you can *usually* get what you want, within your personal constraints, if you plan well and use some creativity. But...don't assume that *purchasing* is the only, or best, way to get what you want...

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Author: marushki 10+ Year Anniversary! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4401 of 75340
Subject: Re: When can I start buying toys???? Date: 7/13/1998 4:59 PM
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I got a boat. She's old, she's used, she ain't pretty, but she does the job and she was cheap enough that I didn't go into debt buying it. If I was to buy a brand new one, I wouldn't go into debt over that either. If you really want a boat, set up a savings plan for it and think carefully about what you want and what could suffice for what you want. You can catch fish in an old used boat just fine. And, if salmon fishing is not a passion, don't do it.

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Author: LasVegasFool One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4414 of 75340
Subject: Re: When can I start buying toys???? Date: 7/13/1998 9:32 PM
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>Oh yeah, I almost forgot to add this... I work for a >bank and have "almost immediate access" to
> emergency cash via a personal loan (should I ever >need it, knock on wood). I don't have hardly any
> liquid cash/cash investments though, as I have been >funding my retirement savings like a mad man.
> Should I rely on the bank to loan me emergency funds >(I'm planning on long term employment here)
> or should I save up the much talked about "six months >worth"???

Scenario: You lose your job. There goes your access to a personal loan at the same time as you need it.

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Author: cable666 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4426 of 75340
Subject: Re: When can I start buying toys???? Date: 7/14/1998 1:11 PM
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Dear MM:

I have a used salmon fishing boat I'm trying to sell. I couldn't find an e-mail address for you on your profile to tell you offline.

It is a 30' 1940's wooden double-ender Astoria design docked in Moss Landing (between Monterey and Santa Cruz). The slip fees are free where it is docked.

It was my dad's boat before he died. My mother and I don't want it. My father was a Salmon fisherman for the last 5 years of his life. He was quasi-retired. He didn't make much money, but it was hard work and he enjoyed it so much. He was able to make a small profit only because he didn't have a crew.

It does need some work, but it runs. It is a primitive boat, but my dad used to take it out for week long runs between Morro Bay and Point Arena. It has two bunks, a small galley, no head. It has large holds and a diesel motor.

I'll sell it for less than $5K. Call me at 805-564-1312 if you are interested.

I must warn you, you are going to really have to love this hobby like my dad did. Boats costs a lot to maintain and operate.

Ron

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Author: doobiedoo One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4432 of 75340
Subject: Re: When can I start buying toys???? Date: 7/15/1998 3:47 AM
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<< Should I rely on the bank to loan me emergency funds (I'm planning on long term employment here) or should I save up the much talked about "six months worth"??? >>

I agree with the other posts. Save your own money for the emergency fund. The emergency funds need to be there in the worst case scenario. Losing your job (for whatever reason) is a scenario that will likely require emergency funds. And why add the burden of another loan payment when you can least afford it? (That's in addition to all the money the boat will need. hee,hee)


At 27, you feel invincible. That's the good news. The bad news is: you're not.

As for buying your boat, all the people I know that have a boat complain about the cost. Many of them enjoy the boat and some of them would still buy the boat, but they all complain about the cost.

The "Chicken Soup" books are full of stories about people who literally live in poverty for 30 years in order to scrimp and save every penny. Then they get to live like millionaires for the rest of their lives. My reaction is -- Who wants to live like that? You can never get back those 30 years.

Now you don't sound like you are living in poverty. But the principle is to balance your life. I make my kids invest 1/2 of all their money (presents, allowance, etc) for college. They can save the rest for "toys" that they want. You could use a similar guideline. If you want a warm fuzzy feeling that you are saving enough for retirement, you need to do the spreadsheet projection (as others have suggested).

--Doobie

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Author: gilvid One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 4588 of 75340
Subject: Re: When can I start buying toys???? Date: 7/23/1998 10:17 AM
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As a 27 year old single male, I am having a hard time decideing when I can start buying "toys".
Specifically, I WANT A BOAT FOR SALMON FISHING!!!!! I've been maxing out my 401k for
2 1/2 years, as well as three years worth of IRA contributions set aside. All these investments are in
aggressive equity funds (mostly domestic with a small percentage allocated to international

Go for the boat! Get it out of your system now or find out if it will be a life long passion that you will get years of enjoyment from.
Make the boat an investment. You don't have to start out with a yacht, start with small USED one and every couple years spend a few more bucks and up grade if you still want to after the novelity wears off. You may find after the first couple of years you won't use it more 3 or 4 times a year. There are many boats out there of different quality, buy one that has excellant resale value.
As for expensive to maintain (!) bull. I have had a 19 ft I/O sleeps 5 for 12 yrs that sets on trailer in the backyard and gets a tarp over it in the NY winters. (You should keep it under hard cover to avoid the sun tho) Then I trailer it to the NY Finger Lakes in the summer. Burns 3 gal gas phr. 100-200$ pyr insurance if I choose. This year I splurged and it is now sitting at a dock in The 1000 Islands at cost of 100$ pmo. Ugh! You can make it as costly as U want. Enjoy a balanced life, getting an early start for retirement is wise on your part but what if your dead at 32.
Someday you'll get married and the wife might get seasick like mine does and that may be the end of the boat. Better yet find one with a boat. Run an ad "Wanted women with boat, send picture of boat."
Just a different viewpoint to help you make YOUR decision.

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