Buying in cash is the best decision you could ever make if you have the money. No, you dont have to filthy rich. I am far from being rich and I have done it.
It is a question of mentality. In the US people cannot think of purchasing without a mortage, most of the people consider it crazy. Well in other countries, mortgages are almost non-existing and the only way is to save up and pay it in cash.
It is a great excersise of self control learning how to spend less to set money aside for such an important goal such as buying your home.
I have saved for many years and took the plunge. You dont need a lot more extra money to do so. If you have a steady income to pay for a mortgage I dont see why you wouldnt have it to live once you payed for a place.
With having cash enough to sustain yourself for a couple of months -consider you wont pay a lease or a mortage fee so you dont need THAT much- is more than enough.
In these days of crisis as results of mortgages you can get a pretty good deal when you have all the cash in hand.
Most people wouldnt refuse to make a discount when they see all the money upfront right away hassle free.
And lets not even get into how much you save because you dont pay interest. If you think of much you end up paying after a 30 year mortgage, you realize how expensive your house turned out to be after all!
If you run out of cash, no big deal. You know you have a roof over your head that is totally paid for so you wont be out on the street. You put yourself in a solid position to handle an economic bump, much better positioned than being tied up to pay to a third party when we know by now how easy it is for any economy to be upside down with short notice.
If things go bad, you go frugal until you get back on your feet.
If you have spare a room, you can rent a room to tourists for example. There are myriad ways to survive if you hit a rough patch.
If things go really bad, you can always sell, get cash again and reduce by buying a cheaper property -smaller, or in a diff location-.
You are indeed free to choose what to do without anyone interfering in your decision making process, no need of getting approval of entities who simply dont care about unless you are a good deal for them.
Going in for debt is a risky deal, is like betting on a casino. You can win, but you can lose pretty hard as well.
Buying in cash is HEALTHY!
Think about the stress you spare yourself from by not having to worry about rates, crisis, owing money to anyone, possible foreclosure and such.
I am not a socialist or anything, but the credit system is pretty evil. They want you to hop on the wheel and make you believe that the more credit you ask for, better for you and it is quiet the contrary.
There is NOTHING like knowing your house is yours and yours alone.
To those who want to do it, take the plunge! YOU WONT REGRET IT!
I think that is short sighted to state that people won't buy a movie after they watch it for free. With any art, movies also need to evolve with and as technology develops. One can hope the see a similar trend as you do with artists who give their music away for free. The trend is profit. In case you are out of the loop.
Just add an egg, cream of mushroom soup, onion, bread crumbs and brown, then add cream of mushroom soup and mushrooms to the skillet and let simmer for about 10 minutes. It's delicious!
I love reading your tips and the one about how to hack your DVD player let me get my husband a set of Region 2 documentaries for Christmas that weren't available in the States. So thanks!
But this site seems on the whole no different any other pirated movie aggregator (such as surfthechannel.com) who takes no legal responsibility for content because they don't actually host the videos themselves. A few of the documentaries may be provided by the film makers to widen their audience, raise public awareness, whatever. But I'm pretty sure most of the filmmakers have no idea their movie is up there.
Notice they do not remove the link when the makers complain to them but only when they file a complaint with the place hosting the video and that place agrees there was a breech of copyright. Which means they take it down. Which means OF COURSE FreeDocumentaries.org takes it down, because they have nothing to link to anymore. They are staying just barely on the right side of the law by allowing other sites to do their dirty work, etc. Basically they are enabling intellectual property theft.
Your heart was in the right place, but I think this a very misleading post that is encouraging internet piracy of documentaries.
Right—paying down debt first is generally better. In this case it would just be a matter of reducing the amount of debt pre-payment by a quarter (she mentions suspending the extra debt payments for three months), and that seems like a reasonable trade-off to me, in exchange for a shot at decades of tax-free growth.
@Nate:
If there's no employer match it gets a lot harder to decide whether to prefer the tax-deferral of a regular 401(k) or IRA versus the forever-tax-free growth of a Roth. Which will turn out to be better really depends on whether tax rates will be higher in the future. But since currently tax rates are at multi-generational lows, I'm betting that future tax rates will be higher. That tends to make tax deferral less attractive than tax-free growth.
I'd be inclined to prioritize debt reduction over either one, except for the pay-yourself-first aspects of a 401(k). If you can really, really put all the money into debt reduction, then I expect you'd come out ahead getting the debt paid off first. But if even a little of the money ends up getting spent simply because it makes its way into your checking account, I expect you'd end up behind. As long as contributing to a 401(k) does stretch your debt repayment off into the distant future, and as long as the debt isn't at outlandish interest rates, I'd stick with 401(k) contributions, even without the corporate match.
Parents that do not fulfill their responsibility to pay for their child's college education are a disgrace. The world of higher is very different today than it was a generation ago. It is unreasonable to expect an 18 year old to pay for 80k+ 4-year college education. Why are people selfishly having children they cannot afford? It's absurd, stupidity and ignorance is Not an excuse. The world is very competitive place today and it is the rare individual who can survive and thrive in a global business world without the benefit of a higher education. If you cannot afford to save for retirement AND have educate your children, you should limit yourself to one child or forgo that new car every 3 years, and keep yourself from indulging on Big screen TVs and other uneccesary luxuries most peole think they are entitled to at the expense of your child's future! Watch the documentary IDIOCRACY get some common sense!
Wish I had her problem. Let's add another wrinkle to your 1-5 list of where my money ought to go. What if my employer stopped matching my 401(k) contributions? Should I continue to put in what I was before? Should I shift that to paying off debt? Should I shift that to a Roth?
As a general rule, wouldn't you say that paying down debt first is better? The questioner's situation is not typical. Also, with a salary "jump," perhaps the questioner could do both!
I just discovered Chegg.com this semester and so far I love it. I spent $40 to rent a book that I would have purchased used for a minimum of $90 (and we all know I'd be lucky to get $40 back when selling it back). Either way if you are looking into chegg.com you can use coupon code CC110354 to save 5% on an order you place. The code can also be used to get a $5 bonus on any books you sell to Chegg.com. The code has unlimited use so take advantage.
And what happens when the 529 or equivalent college fund nose-dives in value such as in the current economy? One person I know invested for college expenses for 4 children and is unwilling to access the money because the investment plummeted in value over the last 2 years. He is paying out of pocket and struggling.
I went (circa 1990) to a private elite college. Tuition was paid via student loans, parent's contribution and financial aid from the school. The student loans kept me vested in my own success. I worked hard to repay them and it helped to teach me responsibility. I had a 2 year stint in the Peace Corps during which loan payments were suspended (too bad I missed the student loan forgiveness plan). This taught additional responsibility and life skills.
My spouse and I are not saving for college for our 2, instead we are trying to save for retirement. We got a late start as we were wild child types not marrying until later. We feel it's more important to not be a burden to the kids when we're old and gray. I'm also an optimist, we'll find a way.
Thanks for the comments. Process goals are definitely more controllable and a great place to start when tackling a big goal. For me, as I progress, I can then start to be more strategic about achieving a certain result but can also see that the small, day-to-day things can make a huge difference in achievement; also, I may see that I need to adjust or change processes after getting to a certain point.
Also, thanks for the resource on tracking goals. Another idea there is to break down goals over the year so that you are only tackling one or two goals at a time and can more easily keep track of how you're doing.
You'd have to look at the loan documents to see if there is an early payment or prepayment penalty. Not all loans have a prepayment penalty but apparently some do.
My kids attend community college as high school students, so the state pays their tuition, but I buy their textbooks. The problem that I have run into is that many of their textbooks cannot be purchased elsewhere because they are books made especially for their college. I have heard from other parents that other colleges do this also. Not only cannot you not buy these books from most of the discount textbook sites, but places like Book Jingle won't buy them when you are finished with them. Also, the college will have brought in a new edition by the quarter's end, so you can't even sell it back to the bookstore. At my kids' school, they just started a student site to buy and sell books, which I am hoping we can start using.
it's true. Riding the 'torque curve' is the key. That means accelerating smoothly and efficiently from a stop to the most efficient speed as quickly as possible.
the sweet spot for a gasoline engine is around 2520 rpms. That's where the rpms achieve maximum torque with minimum fuel consumption.
I have the perfect solution for group gifting: The Gifts Project enables friends to chip in for each others gift on Facebook. Go to www.giftsproject.com and use coupon FLYD119 to get free coins to start with. It's a new FB app, but its really awesome because finally you can make a friends real happy on their special occasion!
$100 is pretty expensive. What is the payback period? I'd like to see empirical evidence that shows this fan is worth the cost.
Until then, I'm sticking to my stove's circulating blower and a $15 electric fan from Kmart.
Buying in cash is the best decision you could ever make if you have the money. No, you dont have to filthy rich. I am far from being rich and I have done it.
It is a question of mentality. In the US people cannot think of purchasing without a mortage, most of the people consider it crazy. Well in other countries, mortgages are almost non-existing and the only way is to save up and pay it in cash.
It is a great excersise of self control learning how to spend less to set money aside for such an important goal such as buying your home.
I have saved for many years and took the plunge. You dont need a lot more extra money to do so. If you have a steady income to pay for a mortgage I dont see why you wouldnt have it to live once you payed for a place.
With having cash enough to sustain yourself for a couple of months -consider you wont pay a lease or a mortage fee so you dont need THAT much- is more than enough.
In these days of crisis as results of mortgages you can get a pretty good deal when you have all the cash in hand.
Most people wouldnt refuse to make a discount when they see all the money upfront right away hassle free.
And lets not even get into how much you save because you dont pay interest. If you think of much you end up paying after a 30 year mortgage, you realize how expensive your house turned out to be after all!
If you run out of cash, no big deal. You know you have a roof over your head that is totally paid for so you wont be out on the street. You put yourself in a solid position to handle an economic bump, much better positioned than being tied up to pay to a third party when we know by now how easy it is for any economy to be upside down with short notice.
If things go bad, you go frugal until you get back on your feet.
If you have spare a room, you can rent a room to tourists for example. There are myriad ways to survive if you hit a rough patch.
If things go really bad, you can always sell, get cash again and reduce by buying a cheaper property -smaller, or in a diff location-.
You are indeed free to choose what to do without anyone interfering in your decision making process, no need of getting approval of entities who simply dont care about unless you are a good deal for them.
Going in for debt is a risky deal, is like betting on a casino. You can win, but you can lose pretty hard as well.
Buying in cash is HEALTHY!
Think about the stress you spare yourself from by not having to worry about rates, crisis, owing money to anyone, possible foreclosure and such.
I am not a socialist or anything, but the credit system is pretty evil. They want you to hop on the wheel and make you believe that the more credit you ask for, better for you and it is quiet the contrary.
There is NOTHING like knowing your house is yours and yours alone.
To those who want to do it, take the plunge! YOU WONT REGRET IT!
Cheers!
I think that is short sighted to state that people won't buy a movie after they watch it for free. With any art, movies also need to evolve with and as technology develops. One can hope the see a similar trend as you do with artists who give their music away for free. The trend is profit. In case you are out of the loop.
I find snagfilms to be better. Check it out, same idea, more selection! www.snagfilms.com
Cover your head--wear a hat or scarf, inside too. It really helps!
My favorite hamburger recipe is Salisbury Steak
Just add an egg, cream of mushroom soup, onion, bread crumbs and brown, then add cream of mushroom soup and mushrooms to the skillet and let simmer for about 10 minutes. It's delicious!
I love reading your tips and the one about how to hack your DVD player let me get my husband a set of Region 2 documentaries for Christmas that weren't available in the States. So thanks!
But this site seems on the whole no different any other pirated movie aggregator (such as surfthechannel.com) who takes no legal responsibility for content because they don't actually host the videos themselves. A few of the documentaries may be provided by the film makers to widen their audience, raise public awareness, whatever. But I'm pretty sure most of the filmmakers have no idea their movie is up there.
Notice they do not remove the link when the makers complain to them but only when they file a complaint with the place hosting the video and that place agrees there was a breech of copyright. Which means they take it down. Which means OF COURSE FreeDocumentaries.org takes it down, because they have nothing to link to anymore. They are staying just barely on the right side of the law by allowing other sites to do their dirty work, etc. Basically they are enabling intellectual property theft.
Your heart was in the right place, but I think this a very misleading post that is encouraging internet piracy of documentaries.
@frugalscholar:
Right—paying down debt first is generally better. In this case it would just be a matter of reducing the amount of debt pre-payment by a quarter (she mentions suspending the extra debt payments for three months), and that seems like a reasonable trade-off to me, in exchange for a shot at decades of tax-free growth.
@Nate:
If there's no employer match it gets a lot harder to decide whether to prefer the tax-deferral of a regular 401(k) or IRA versus the forever-tax-free growth of a Roth. Which will turn out to be better really depends on whether tax rates will be higher in the future. But since currently tax rates are at multi-generational lows, I'm betting that future tax rates will be higher. That tends to make tax deferral less attractive than tax-free growth.
I'd be inclined to prioritize debt reduction over either one, except for the pay-yourself-first aspects of a 401(k). If you can really, really put all the money into debt reduction, then I expect you'd come out ahead getting the debt paid off first. But if even a little of the money ends up getting spent simply because it makes its way into your checking account, I expect you'd end up behind. As long as contributing to a 401(k) does stretch your debt repayment off into the distant future, and as long as the debt isn't at outlandish interest rates, I'd stick with 401(k) contributions, even without the corporate match.
I would also recommend BookDealFinder.com as another website for finding great deals on college textbooks.
Parents that do not fulfill their responsibility to pay for their child's college education are a disgrace. The world of higher is very different today than it was a generation ago. It is unreasonable to expect an 18 year old to pay for 80k+ 4-year college education. Why are people selfishly having children they cannot afford? It's absurd, stupidity and ignorance is Not an excuse. The world is very competitive place today and it is the rare individual who can survive and thrive in a global business world without the benefit of a higher education. If you cannot afford to save for retirement AND have educate your children, you should limit yourself to one child or forgo that new car every 3 years, and keep yourself from indulging on Big screen TVs and other uneccesary luxuries most peole think they are entitled to at the expense of your child's future! Watch the documentary IDIOCRACY get some common sense!
Wish I had her problem. Let's add another wrinkle to your 1-5 list of where my money ought to go. What if my employer stopped matching my 401(k) contributions? Should I continue to put in what I was before? Should I shift that to paying off debt? Should I shift that to a Roth?
Good Post...
I add a couple of dryer sheets to my suitcases after a trip in order to keep the inside smelling fresh for the next go round.
As a general rule, wouldn't you say that paying down debt first is better? The questioner's situation is not typical. Also, with a salary "jump," perhaps the questioner could do both!
http://www.investopedia.com/articles/retirement/05/012505.asp
I use http://www.clickingsave.com to find certain items which are on sale and free shipping.
I just use their search.
I could find whatever brands or series that is cheap and free shipping.
I regularly running search of famous brand on this site.
Too bad they only have cheap stuff.
I just discovered Chegg.com this semester and so far I love it. I spent $40 to rent a book that I would have purchased used for a minimum of $90 (and we all know I'd be lucky to get $40 back when selling it back). Either way if you are looking into chegg.com you can use coupon code CC110354 to save 5% on an order you place. The code can also be used to get a $5 bonus on any books you sell to Chegg.com. The code has unlimited use so take advantage.
And what happens when the 529 or equivalent college fund nose-dives in value such as in the current economy? One person I know invested for college expenses for 4 children and is unwilling to access the money because the investment plummeted in value over the last 2 years. He is paying out of pocket and struggling.
I went (circa 1990) to a private elite college. Tuition was paid via student loans, parent's contribution and financial aid from the school. The student loans kept me vested in my own success. I worked hard to repay them and it helped to teach me responsibility. I had a 2 year stint in the Peace Corps during which loan payments were suspended (too bad I missed the student loan forgiveness plan). This taught additional responsibility and life skills.
My spouse and I are not saving for college for our 2, instead we are trying to save for retirement. We got a late start as we were wild child types not marrying until later. We feel it's more important to not be a burden to the kids when we're old and gray. I'm also an optimist, we'll find a way.
Thanks for the comments. Process goals are definitely more controllable and a great place to start when tackling a big goal. For me, as I progress, I can then start to be more strategic about achieving a certain result but can also see that the small, day-to-day things can make a huge difference in achievement; also, I may see that I need to adjust or change processes after getting to a certain point.
Also, thanks for the resource on tracking goals. Another idea there is to break down goals over the year so that you are only tackling one or two goals at a time and can more easily keep track of how you're doing.
You'd have to look at the loan documents to see if there is an early payment or prepayment penalty. Not all loans have a prepayment penalty but apparently some do.
Love your store shopping tips! Let's try them this year.
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My kids attend community college as high school students, so the state pays their tuition, but I buy their textbooks. The problem that I have run into is that many of their textbooks cannot be purchased elsewhere because they are books made especially for their college. I have heard from other parents that other colleges do this also. Not only cannot you not buy these books from most of the discount textbook sites, but places like Book Jingle won't buy them when you are finished with them. Also, the college will have brought in a new edition by the quarter's end, so you can't even sell it back to the bookstore. At my kids' school, they just started a student site to buy and sell books, which I am hoping we can start using.
it's true. Riding the 'torque curve' is the key. That means accelerating smoothly and efficiently from a stop to the most efficient speed as quickly as possible.
the sweet spot for a gasoline engine is around 2520 rpms. That's where the rpms achieve maximum torque with minimum fuel consumption.
I have the perfect solution for group gifting: The Gifts Project enables friends to chip in for each others gift on Facebook. Go to www.giftsproject.com and use coupon FLYD119 to get free coins to start with. It's a new FB app, but its really awesome because finally you can make a friends real happy on their special occasion!
Happy New Year
Maya