Financing or Paying Cash for a Bike

[SWriverstone]

This poll was prompted by the thread called U.S. Bike Sales down 50% since 2005.

Just curious to see how STNers have paid for their bikes...

Scott

EDIT: Dangit...I meant to allow people to choose more than one option (so you could also pick one of the last few options). Oh well. Just pick the one that best matches you!

[gradus]

For my current bike, I floated the purchase price for a few weeks and then paid in full within <30 days.  So I voted 100% cash.  

I typically don't hold cash, but instead aggressively contribute to my mortgage and retirement.  Unused home equitly lines are available for large purchases.  With a car fully paid and no credit card debt, the equity line balance goes back to zero pretty quickly.  

[kevin_stevens]

I financed $5k worth so I'd have a recurring payment to boost my credit rating.  Also paid for part with a previous bike.

KeS

[garry]

Technically I paid cash for the KTM, but then filled in part of the hole in my savings by selling the Wee Strom and Ninja bikes over the next 6 months.

[cultureslayer]

What if the bike was less than $1k?  

[SilverHound]

Technically I paid cash but also financed and sold two other bikes.

I paid half in cash but took advantage of Yamaha's 0% financing for six months for the other half however I paid that off before the end of the six months.

Then after I bought the new bike I sold two others and replentished my bike fund.

At this point in my life I do not intend to ever have another bike or car payment.

[Mr.Black]

HAD TO RIDE!!!!!!!

Financed. Payed off with a 401K loan within the first 2 years.

Now I am paying myself back. (I don't care to hear any of your opinions on this)

[photomd]

I've paid from $325-$6500 for all my bikes. All paid in cash. I'm with Mr Black. There were times when sacrifices were made to get a bike: Had to ride.  

[SWriverstone]

I've always suspected that sport-tourers are predominantly upper-middle and upper-class folks. This poll seems to confirm that! I only say this because I'm amazed at the number of people (10!) who paid cash for bikes costing $10K or more.

Lectures on the importance of saving aside...I know very few people who have $10K (or more) in cash just sitting around. In fact, with savings rates at an all-time low these days, I'd say it's only upper-middle and upper-class people who have that much (or more) in savings...but I could be wrong—and I'm sure someone will pipe up saying "I make $20K/year and live in an efficiency apartment, but I have $50K in savings!"  

It would be impossible for me to save that much cash. No way. Yes, we pretty much live paycheck-to-paycheck...and if something bad ever happened, we have decent credit and insurance to fall back on—that's it. It may not be "smart," but it's reality for us.

You've either got to make damn good money or be frugal for decades to maintain a middle-class-or-better standard of living and still have enough leftover to sock away thousands in savings. Not saying it can't be done, but it's not easy.

Scott

EDIT: I was just thinking...I financed my Wee-Strom 5 years ago and paid it off. Could I have saved my $180/month payments for five years instead? Sure...but I wasn't gonna wait 5 years to buy the bike!

[Cablebandit]

You would have only had to wait 3 years....two years worth of those payments were interest.  

[jay547]

I've always suspected that sport-tourers are predominantly upper-middle and upper-class folks. This poll seems to confirm that! I only say this because I'm amazed at the number of people (10!) who paid cash for bikes costing $10K or more.

Lectures on the importance of saving aside...I know very few people who have $10K (or more) in cash just sitting around. In fact, with savings rates at an all-time low these days, I'd say it's only upper-middle and upper-class people who have that much (or more) in savings...but I could be wrong—and I'm sure someone will pipe up saying "I make $20K/year and live in an efficiency apartment, but I have $50K in savings!"  

It would be impossible for me to save that much cash. No way. Yes, we pretty much live paycheck-to-paycheck...and if something bad ever happened, we have decent credit and insurance to fall back on—that's it. It may not be "smart," but it's reality for us.

You've either got to make damn good money or be frugal for decades to maintain a middle-class-or-better standard of living and still have enough leftover to sock away thousands in savings. Not saying it can't be done, but it's not easy.

Scott

EDIT: I was just thinking...I financed my Wee-Strom 5 years ago and paid it off. Could I have saved my $180/month payments for five years instead? Sure...but I wasn't gonna wait 5 years to buy the bike!

i could've written this, except my name's not scott. i also suspect that some of these posters are being a little less than honest.

[SWriverstone]

You would have only had to wait 3 years....two years worth of those payments were interest.  

Yeah, I thought of that too.   But that's still 3 years too long to wait!  

Scott

PS - If I buy a C14 anytime soon, it's definitely gonna be financed—100%!

[black hills]

I paid $5500 for my '09 KTM300, and borrow $3500 from the credit union. A wealthy relative told me you are a fool to pay cash for a car or bike. You can usaully finace them below 10% and your money will make more than 10% in most decent investments?? I simple finance because I don't have the money to begin with

[SWriverstone]

See...that's the (in my opinion) messed-up thing about this country: if you already have a huge pile of cash...there are LOTS of ways to turn that whopping pile of cash into an even BIGGER pile of cash—without having to lift a finger!

Seriously—the existence of an entire industry dedicated exclusively to making money without actually doing any work is absurd. I admit that may sound prehistoric...(and I'm pretty progressive when it comes to most things)...but I guess I still believe in the antiquated notion that you actually have to WORK to earn every penny you make!  

But in the good ol' US of A, the more you make, the less you work! Logical, right!

Scott

[black hills]

See...that's the (in my opinion) messed-up thing about this country: if you already have a huge pile of cash...there are LOTS of ways to turn that whopping pile of cash into an even BIGGER pile of cash—without having to lift a finger!

Seriously—the existence of an entire industry dedicated exclusively to making money without actually doing any work is absurd. I admit that may sound prehistoric...(and I'm pretty progressive when it comes to most things)...but I guess I still believe in the antiquated notion that you actually have to WORK to earn every penny you make!  

But in the good ol' US of A, the more you make, the less you work! Logical, right!

Scott

My former boss, now retired, used to tell me he made far more on his investments every year than what his salary was. I'll be happy when I get to that point.

[McHack]

See...that's the (in my opinion) messed-up thing about this country: if you already have a huge pile of cash...there are LOTS of ways to turn that whopping pile of cash into an even BIGGER pile of cash—without having to lift a finger!

Oh I dunno...     if one has a big pile of cash,  they've certainly shown they know how to handle money & therefore,  are more likely to handle the debt appropriately.

[Tejasbusa]

i could've written this, except my name's not scott. i also suspect that some of these posters are being a little less than honest.

I don't consider myself upper middle class, or even close to the middle of middle class.  I got out of motorcycles in the late 70's because my ex said sell the bike because she had spent the money.  So I HAD to sell the bike and then got rid of her (but that is another story which we don't need to go into here)  Fast forward to 2002 after finding a great girl and raising 6 kids. (none the ex's)  She let me save my lunch money and scrimped until I had the money.  After getting all the debts my ex helped run up paid off and getting settled into our home I was able to buy my Busa outright.  The last new car we had was back in 1985 when we bought a new pickup.  Since then it has been good used keeping them till at least 175,000 on the clock.  We have NEVER had cable or dish TV.  Our TV that we had up till four years ago was one which I bought before we got married, so it was about 23 years old.  (see a trend developing?)  All of the bikes in the garage now are paid for and were when I drove them off the lot.  It is possible to do, you just have to have your priorities where loans are of the devil.  Now we have a pretty fair nest egg to work with and it is growing nicely since the house is paid for and the kids are finally getting their own addresses.  

Now if I could just get my wife to ride further than to the monthly Ride To Eat meeting it would be nice, but she lets me ride and she also was the one who suggested to buy some guns (I was also stupid and sold them all because of the ex) so all is not lost.

Am I suggesting that everyone should wait 20 plus years to get back into riding, NO, what I am saying is you can have consumable items without going into debt.  During the last 28 years we have done what some of the above posters have done, used other people's money to purchase something for "6 months same as cash", etc, but we worked hard not to overextend ourselves so we did not have the worry of payments.

[jay547]

I've always suspected that sport-tourers are predominantly upper-middle and upper-class folks. This poll seems to confirm that! I only say this because I'm amazed at the number of people (10!) who paid cash for bikes costing $10K or more.

that and i've always been amazed at the number of people here who take multi-week or multi-month long vacations to ride. i've never been able to take more than a week off except when i was unemployed, and then i couldn't go anywhere because of lack of money.

maybe we should do an income poll?

[MadOzodi]

I funded some of the purchase with a trade-in, paid cash for part of the remainder and then financed the rest.

Previous bike was paid for in cash.  Next bike will (hopefully) be paid for in cash.

[ANZAC]

HAD TO RIDE!!!!!!!

Financed. Payed off with a 401K loan within the first 2 years.

Now I am paying myself back. (I don't care to hear any of your opinions on this)

That's a good way to do it - the 401k loan is sweet  

[black hills]

That's a good way to do it - the 401k loan is sweet  

All things considered the 401k loan is a bad idea. Take a look at the lost earnings compared to what you can finance for through a credit union or local bank.

[Squareman357]

First new bike was a "lay-away" over the winter.  Cost about $6K new, put money down on it in September, had it paid off by May of the next year.  Next new bike was also a "lay-away", new I wanted a bigger bike, traded in a bike and paid the rest over the winter.   Put money down in September, also had it paid off by May of the next year.  Was $10K, but got about $4K for the trade-in, paid the rest over the same 9 month period as the first bike.  The 3rd new bike was paid for with a performance bonus.  Got $25K, invested/saved $15K, spent the other $10 on the new bike.  Sold the previous bike personally and used the proceeds from that to farkelize the new bike.  The 4th new bike was an insurance pay out after my previous bike was destroyed.  Replaced it with same model, paid cash for it.  Every new purchase except the first one was over $10K, but they were all leveraged somehow by a previous bike except the one I spent bonus money on.  Now I'm saving so that when I'm ready for new bike #5, I have money to get it, probably also leveraged by a sale of my existing bike, which by then will have high miles.  Not rich, or upper class.  

[M.Brane]

 Current bike was cash in full. Cash came from insurance check for previous bike which was half cash half financed through Bank Of Rick.

[stealth1]

I paid cash but sold a bike a few days before buying the current one.
I used that money for partial payment and cash for the rest.
The last time I financed a bike was 1974.
If I can't afford it without a loan I don't need it.

[bomber]

Cash -- re-arranged some piles of money, and bought the bike . . . . .

Ditto for the last 5 vehicles (2 and 4 wheels) . . . . . . . .

[ajf]

If you're 45+ and you're still financing your toys, you're probably headed for an uncomfortable retirement.  You'll probably have to work into your 60s or even your 70s.

If you really like working, that's not problem, I guess.

[black hills]

If you're 45+ and you're still financing your toys, you're probably headed for an uncomfortable retirement.  You'll probably have to work into your 60s or even your 70s.

If you really like working, that's not problem, I guess.

or you have hundreds of thousands of dollars in investments making 10+% interest and would rather pay 8% on a loan than lose 18% in income on the same amount of money? Not to mention the tax implications  

an example: if you buy a $10,000 bike, finance @ 8% for 3 years you will pay 1,281.09 in interest
If you take the $10,000 out of an investment making 10% to "pay cash" you will lose $3,310.00 in earnings? So, even with the interest you paid on the loan you still come out $2000 ahead.

My retirement is looking just fine, thank you very much

[ajf]

or you have hundreds of thousands of dollars in investments making 10+% interest and would rather pay 8% on a loan than lose 18% in income on the same amount of money? Not to mention the tax implications  

I'm not all that familiar with the American tax system.  Here in Canada, there's a limit to what you can contribute to tax-sheltered investments.  With my pension plan I was at that limit most of my working life so I never had to choose between buying a toy or putting money away to get a tax refund.  But, I do see what you're saying, I think.  Buying a toy with cash instead of contributing to your tax-sheltered  investments paying 10% gives you a direct loss of 2%.  When you borrow and contribute, your tax system pays you an extra 16%.  Is that it?

One problem with this plan is that you get the tax refund only once whereas you pay interest usually for several years.  And you eventually have to pay taxes on the money when you withdraw it in retirement, so it's hard to see how you're better off overall by borrowing.

Finally, if your retirement fund depends on earning 10+% per year for, say, 20 years, you'd probably be better off buying lottery tickets.  

[black hills]

Finally, if your retirement fund depends on earning 10+% per year for, say, 20 years, you'd probably be better off buying lottery tickets.  

Definately correct there, I was just using a low percentage to show what happens. Another thing to remember is that you earn interest on an increasing amount of principal while you pay interest on a decreasing amount of principal. Read the book "rich dad, poor dad" it expalins things far better than I can.

[ajf]

Definately correct there, I was just using a low percentage to show what happens.

Wow!  I was thinking exactly the opposite.  Historically, secure investments have returned 3% above inflation.  My pension seems to assume a return of 5%, based on what I and my employer contributed vs what I'm receiving, and that's with professional management and a government backstop that makes it easier for them to take risks, and an ever-increasing number of employees contributing.  (It's probably less than 5% since they must be paying me back some of the principal as well as the income from my contributions, but the payouts are inflation-adjusted so it's hard to work out.)

Actually needing 10% and managing it yourself or paying some financial adviser who took a two-week course - yikes!  That's scary.

[black hills]

Wow!  I was thinking exactly the opposite.  Historically, secure investments have returned 3% above inflation.  My pension seems to assume a return of 5%, based on what I and my employer contributed vs what I'm receiving, and that's with professional management and a government backstop that makes it easier for them to take risks, and an ever-increasing number of employees contributing.  (It's probably less than 5% since they must be paying me back some of the principal as well as the income from my contributions, but the payouts are inflation-adjusted so it's hard to work out.)

Actually needing 10% and managing it yourself or paying some financial adviser who took a two-week course - yikes!  That's scary.

My last 401K statement ranged from 9.8% to 18.7% depending on what I was invested in. Of course, the closer to retirement I get the more I will move to the less risky (and lower return) options...

[gradus]

My last 401K statement ranged from 9.8% to 18.7% depending on what I was invested in. Of course, the closer to retirement I get the more I will move to the less risky (and lower return) options...

Yes, your investments ranged from 9.8%-18.7% in 2010.  Heck look at 2009 and quote +30%.  But the 10 year average for domestic stocks (Russell 3000) was a little over 2%.  International developed markets 10yr return is 3.5%.  Longer than 10 years and things look better, but you don't assume +10% in your retirement assumptions and have much probability for success.                

[ajf]

Sorry, I didn't read this bit until now, which you added as an edit while I was away from my computer.  Apparently we get warnings only of new posts while composing a reply, not edits.

an example: if you buy a $10,000 bike, finance @ 8% for 3 years you will pay 1,281.09 in interest
If you take the $10,000 out of an investment making 10% to "pay cash" you will lose $3,310.00 in earnings? So, even with the interest you paid on the loan you still come out $2000 ahead.

My retirement is looking just fine, thank you very much

There is something you haven't included.  The 10k is gone, either into the investment or as cash for the bike.  But you don't have to make monthly payments if you pay cash for the bike.  If you invest those at 10%, a quick back-of-an-envelope calculation says you earn almost all of the $2000 difference in your calculations.  The real difference is just a couple or three hundred dollars.

Meanwhile, you've taken less risk with your money.  If, as can happen with investments that are supposed to earn 10%, the actual return becomes -80%, you have the opportunity of redirecting the monthly contributions you haven't made yet.

[Justin]

Last bike (Busa) was about $9k with tax/tag, paid cash for everything.

[R Doug]

I'm too tired to vote.  I clicked the wrong option.  

I have paid cash for every bike I've acquired.  Some were through savings while others through part of proceeds from another bike.  I did finance the Super Duke for 6 months because KTM provided 6 months same as cash.  So, I kept earning interest on my savings until the 6 months were up.  I'm not sure I would fully consider that "financing" the bike.  I just let KTM give it to me for free for 6 months.  

[SWriverstone]

Threads like this kill me because there are SO many variables...

For example, there are HUGE variances in the cost of living around the U.S. (don't know if the variations are as big in Canada---I suspect not, because there couldn't possibly be any place in Canada that's as expensive as New York, Washington D.C. or San Francisco!) I haven't researched this...but I'd be willing to bet that the differences in average annual salaries are not as dramatic as cost of living differences. So if you're lucky enough to live somewhere cheap, that helps a lot.

Whether or not you have kids makes a HUGE difference. (I can't even begin to say how much money I've spent on my kids!)

Whether or not you commute to work makes a HUGE difference. I spend $200/month out-of-pocket on gas each month getting to/from work (lots more if you count vehicle depreciation).

I realize for the most part, these are all choices we make, and I'm mostly okay with my choices. Ajf's point about being 45+ and not being set for a comfortable retirement is totally true for me. But you know what? I have literally never, ever in my life thought (even for a minute) that I would retire someday. I was smart enough to know from the time I was 18 that I was going to spend every penny I earned on recreational activities!  

And I'm honestly perfectly fine knowing I won't retire. I don't want to retire---I want to be productive and income-earning til the day I die. Yeah yeah...I know we cant always control that...but I'm ready and willing to order the plug to be pulled if I ever become a financial burden on my wife or kids or the state.

Meanwhile, I may have zero savings...but I've led a rich, happy life and experienced a lot of great things...and I don't regret a penny I ever spent.  

Scott

[R Doug]

Meanwhile, I may have zero savings...but I've led a rich, happy life and experienced a lot of great things...and I don't regret a penny I ever spent.  

Scott

Scott, I say good for you.  Life is a balance.  While I respect those who save every penny for retirement and live life on the cheap, I believe you need to have as much balance in your life as possible.  My concern for those to save and save and never have any fun is, how do you know you're going to live long enough to enjoy those savings?

Personally, my wife and I are D.I.N.K.s.  I am fortunate enough to have savings AND blow through cash on recreation activies as if I were going to kill over tomorrow.  

[SWriverstone]

Scott, I say good for you.  Life is a balance.  While I respect those who save every penny for retirement and live life on the cheap, I believe you need to have as much balance in your life as possible.  My concern for those to save and save and never have any fun is, how do you know you're going to live long enough to enjoy those savings?

Well said!   My feelings exactly. So many people "defer the fun" for their whole lives. That never made any sense to me—I wanna have fun now—while I'm still fit and healthy and don't have arthritis, Alzheimer's, osteoporosis, etc.  

Personally, my wife and I are D.I.N.K.s.  I am fortunate enough to have savings AND blow through cash on recreation activies as if I were going to kill over tomorrow.  

LOL...I envy you! (But I don't regret having kids either...)

Scott

[black hills]

Meanwhile, I may have zero savings...but I've led a rich, happy life and experienced a lot of great things...and I don't regret a penny I ever spent.  

Scott

   Life is a balancing act, and to me enjoying life is #1. I have a multi millionaire uncle who is pathetic, spent thier whole lives "getting rich" and now that they are retired they have no hobbies and no friends. Sad fact is most of us will end up in a nursing home eating jello and shitting our pants. At that point stories are all we have left. I'd rather have stories about great adventures than stories about how much money I have
  That being said, some people are luckier than others. You may inherit some weatlh, win a lottery, or just work the rest of your life "getting by". No matter what happens as long as you are enjoying it who cares? I got lucky, fell into a great job with great benefits so retiement is looking good for me (through none of my own doings) I guess I'm lucky, and yes I count my blessing all the time. On the other hand I have a friend who is 60, flat broke and happy as hell? He enjoys doing what he does and has built the body on the worlds fastest sit on motorcycle (ridden by Joe Amo). I'm pretty sure that will be remember long after anyone can remember how much money anyone had.

[SWriverstone]

I'm counting on inheriting some cash from my parents when the kick the bucket, who were far more fiscally successful than me.  

Sad fact is most of us will end up in a nursing home eating jello and shitting our pants.

 
Ahh...I can't wait!   But seriously...I REFUSE to end up in a rocking chair under a blanket in a diaper, with spittle running down my stubbly chin, staring at the TV. No frickin' way. I will go out like Guy Waterman instead—he was a speechwriter for Richard Nixon, well-educated and led a very successful life...

The circumstances of Guy Waterman's death reflected a side of the man seldom glimpsed by the outside world. He had lost two of his three sons, which must have been a great grief and burden to him. A vigorous man, he evidently had a greater than normal fear of losing his abilities with age; his personal habits suggested he had a deep-seated need to control his fate as much as possible. Thus, on a brisk winter's day, he left his home destined for Mount Lafayette, with a plan to breathe his last there, a plan that he carried out near that mountain's summit, thanks to the cold and wind of the open ridge. Friends retrieved the body on February 11.

I'll do something like this, if it comes down to it...

Scott

[black hills]

I'll do something like this, if it comes down to it...

Scott

That is my plan as well, considering I have the option. Unfortunatley we don't always get to make that decision. I have a freind who went from our thursday night woods ride to being a quadrilplegic, now he has no choice but to live. His attitude on life has changed considerably as well, so you just never know, enjoy it while you can

[ajf]

 Life is a balance.  While I respect those who save every penny for retirement and live life on the cheap, I believe you need to have as much balance in your life as possible.  My concern for those to save and save and never have any fun is, how do you know you're going to live long enough to enjoy those savings?

I haven't seen much evidence that how much enjoyment you get out of life depends on how much money you spend.  Most people in the US and Canada have enough income that happiness depends mainly on their nature and the choices they make.

I'm mostly happy most of the time.  I was happy when I was a poor graduate student, living on the cheap so I could afford to buy a brand new CB750 (there weren't any used ones) and take it roadracing, and I did the same as a postdoc to buy my first airplane.  When I got a real job I did the same so I could buy my Pitts.  So I'm familiar with living in poverty to spend every spare penny on toys.

But when I hit 40 I faced up to the reality that I liked my hobbies more than my work, despite having the best job I could imagine myself doing.  I changed my free-spending ways.  I kept my 81 GS650G for 29 years, drove my cars until they died, didn't upgrade the Pitts to a 300k Extra or Sukhoi, and I retired at 56 without any change in my lifestyle.  Sure, I might have won a few more aerobatic contests with a superplane and gone a little faster on the bike trip I had time to take every three years, but I doubt I would have had significantly more fun.

What would make me unhappy would be still having to work into my 60s, having to compete with all the young hotshots for research grants when my heart wasn't really in it, and having my bucket list getting longer instead of shorter.

I think what this comes down to is whether you like your work.  If you do - if it's the best part of your day - then retirement shouldn't be a issue.  But if you live mostly for weekends and holidays, it seems advisable to think very carefully about whether you want to keep working for the rest of your life.

[black hills]

I think what this comes down to is whether you like your work.  If you do - if it's the best part of your day - then retirement shouldn't be a issue.  But if you live mostly for weekends and holidays, it seems advisable to think very carefully about whether you want to keep working for the rest of your life.

Hence the "balance" part. Balance the fun now with the oportunity for more fun later. It's tough, and life's not fair so hard to say what is "right". Had a guy from another power comany retire on a friday a few months ago and have a heart attack and die the following monday (first official day of retirement). Bet he wished he had done things differently. Better planning early in life always pays of (better career, more investing, etc.) but you have to make it to a certain point to enjoy it. Wish I had the answers......

[McHack]

I think what this comes down to is whether you like your work.  If you do - if it's the best part of your day - then retirement shouldn't be a issue.  But if you live mostly for weekends and holidays, it seems advisable to think very carefully about whether you want to keep working for the rest of your life.

Ya know,  this is exactly what my 21 year old daughter says.   Keep in mind,  she's dropped out of college,  so she can go be someone else's admin assistant,  so she can "buy a better car"...   which,  6 months later,  she still hasn't done,  because she's too busy "treating herself".

That said,  I do agree that money isn't everything...   You cant buy happiness,  only another bike...  

[black hills]

Money can't buy happiness, but it can keep you busy until you find it

[SWriverstone]

@ajf...

Though I don't mind my job, I definitely live for evenings, weekends, holidays, hooky days, etc. But I'm still not too concerned about retirement because I know I can live with FAR less than I have now.

I'd be happy and still find interesting things to do even if all I had was a one-room house, a few clothes to wear, enough food to survive, and a fishing pole. :-)

My point is that conversations like these are entirely predicated upon what each of us considers "enough" in terms of material possessions, amount of food we eat, number of pairs of underwear we have, etc. And I think most of us here could probably get by---and even be happy---with far less than what we have now.

Americans (and possibly Canadians) are the world champions of believing we need lots of stuff to be happy...but for some people it's just the opposite.

As I get older, I've found myself steadily "dropping ballast" because I often find that all the material stuff just weighs me down---it becomes a pain and a hassle...and each time I throw something overboard, I feel relief! (Well...except when I sold my KLR, which I kinda regret, LOL)

Scott

[stealth1]

Money can't buy happiness, but it can keep you busy until you find it

But I'd rather be rich and unhappy than poor and unhappy.
The amount of fun one has is NOT directly proportional to the amount of money spent.
Ive had lots of fun on $200 dollar motorcycles as well as $12,000 dollar motorcycles.

[Justin]

I call BS - that whole "money can't buy you happiness" thing is something rich people made up to make us poor folk feel better. I can honestly say if I was filthy rich I'd be happy.

[cbsnbiker]

Money from the insurance check from the totaling of the previous bike covered most of the cost of the purchase of the most recent bike. In this instance, that makes me an "other."

Story:

http://www.sport-touring.net/forums/index.php/topic,15373.0.html

I paid cash for all the other ones. As a general rule I do not believe in financing depreciating assets.

[R Doug]

@ ajf, I believe you missed my point.  

I'm talking about people who have money but chose to work their fingers to the bone and never treat themselves via any personal time while they keep hoarding their cash away for some magic day when they'll "enjoy life."  I never said money doesn't buy happiness.  Maybe you picked up on that when I told Scott that my wife and work, have cash, and we're not afraid to spend it to enjoy life.  All I'm saying is a life needs balance and for me balance includes work, family, friends, religion, and hobbies.    

I remember when I had to live paycheck to paycheck and had to make decisions of whether I could afford to purchase beer when shopping for groceries.  I had my little Suzuki GS450L and I couldn't be more happy than when I was riding it.  

[cultureslayer]

@ ajf, I believe you missed my point.  

I'm talking about people who have money but chose to work their fingers to the bone and never treat themselves via any personal time while they keep hoarding their cash away for some magic day when they'll "enjoy life."  I never said money doesn't buy happiness.  Maybe you picked up on that when I told Scott that my wife and work, have cash, and we're not afraid to spend it to enjoy life.  All I'm saying is a life needs balance and for me balance includes work, family, friends, religion, and hobbies.    

I remember when I had to live paycheck to paycheck and had to make decisions of whether I could afford to purchase beer when shopping for groceries.  I had my little Suzuki GS450L and I couldn't be more happy than when I was riding it.  

Whatever floats your boat, as long as you have enough saved up to deal with some sort of unexpected illness or job loss.  Both happened to me at the same time, but I couldn't get unemployment because I'd been a student.  It sucked.

[ajf]

@ ajf, I believe you missed my point.  

I was trying to expand on your point by discussing the choices one has to make to to maximize happiness, with an example from my personal life.  Clearly the type of people you're talking about have been making poor choices, and are unlikely to change.  No disagreement with what you posted.  Sorry if that wasn't clear.

[R Doug]

In hindsight, I see that.  Thanks for the clarity.  

[doublen675]

Cash, I was lucky as my Mother sold her house and she owed me the money.  I figured it'd be a while before I had that kind of scratch all at one time so I took the plunge.  

[SWriverstone]

I think the truest possible "measurement" of how well you managed your money in life is to ask yourself the following questions:

1) Do I regret any major purchase I ever made?
2) Are there any major purchases I haven't made that I must make to make my life happier?

Hopefully, you'll answer "No" to the first...and "No" to the second.   (Those are my answers.)

For example, I had a windfall one year and used most of it to buy a hang glider (a $5000 purchase) and pay for hang gliding lessons (another $1,000 or so). I learned to fly, earned an advanced rating, and flew regularly for about 3 years. Then I moved on—sold my hang glider for $2500.

The natural question that follows is, "Did I get at least $3500 worth of enjoyment from the expense?" and my answer is "HELL YES!" Flying a hang glider was one of most amazing experiences of my life...and what's an amazing experience worth? for my part, I can say it was easily worth $5000, maybe more.

This is a really important question that I don't think enough people ask themselves: "What are my great experiences worth in dollars?" They ought to teach this in business and economics courses.

Of course it's a subjective thing and near-impossible to quantify...but I suspect that if most people looked at life this way (placing an actual dollar value on their rewarding/memorable/fun experiences) we would all look at our life's overall finances VERY differently.

For example, I'd say over the past 25 years, I've "banked" well over $250,000 in rewarding/memorable/fun experiences. (And I might even raise that number.)

Scott

EDIT: This invites an obvious response: "Yeah, but you can't pay bills or buy food with those "experience dollars." That's true...but those "experience dollars" bought me countless happy memories...and as many will tell you...a lifetime of happy memories can be a powerful force in getting you through hard times...as well as leaving you happy when that "final bell tolls." I'd say that's worth a LOT!

[jay547]

I think the truest possible "measurement" of how well you managed your money in life is to ask yourself the following questions:

1) Do I regret any major purchase I ever made?
2) Are there any major purchases I haven't made that I must make to make my life happier?

Hopefully, you'll answer "No" to the first...and "No" to the second.   (Those are my answers.)

For example, I had a windfall one year and used most of it to buy a hang glider (a $5000 purchase) and pay for hang gliding lessons (another $1,000 or so). I learned to fly, earned an advanced rating, and flew regularly for about 3 years. Then I moved on—sold my hang glider for $2500.

The natural question that follows is, "Did I get at least $3500 worth of enjoyment from the expense?" and my answer is "HELL YES!" Flying a hang glider was one of most amazing experiences of my life...and what's an amazing experience worth? for my part, I can say it was easily worth $5000, maybe more.

This is a really important question that I don't think enough people ask themselves: "What are my great experiences worth in dollars?" They ought to teach this in business and economics courses.

Of course it's a subjective thing and near-impossible to quantify...but I suspect that if most people looked at life this way (placing an actual dollar value on their rewarding/memorable/fun experiences) we would all look at our life's overall finances VERY differently.

For example, I'd say over the past 25 years, I've "banked" well over $250,000 in rewarding/memorable/fun experiences. (And I might even raise that number.)

Scott

EDIT: This invites an obvious response: "Yeah, but you can't pay bills or buy food with those "experience dollars." That's true...but those "experience dollars" bought me countless happy memories...and as many will tell you...a lifetime of happy memories can be a powerful force in getting you through hard times...as well as leaving you happy when that "final bell tolls." I'd say that's worth a LOT!

you and i have the same outlook on life.  

[falconati]

I pay cash for everything (I'm considering credit cards as short-term cash, as I pay off the balance each month)

[Scottyfizz]

I call BS - that whole "money can't buy you happiness" thing is something rich people made up to make us poor folk feel better. I can honestly say if I was filthy rich I'd be happy.

Fuckin A!

[Chronic]

I pay cash for everything (I'm considering credit cards as short-term cash, as I pay off the balance each month)

 ....... same-same, here.    I blow alot $$ on stuff, but, interest ain't one of 'em (except for home loan)

[MK96xj]

The ZZR I paid with my AMEX and paid in full cash. The Multi was a partial finance as I was not really looking and stumbled across it.

[McHack]

Paid Cash for the SV,  am now selling for cash,  3 years later.

But,  now am sort of in a tweener situation...  have only about half what I need to buy what I have decided on.

Do, I float a note for the remainder?   Do I continue to save & buy down the principal on my car?
AAHHHHHH,  summer w/o a bike?  REALLY?

[RocketJohn]

It's so nice to pay cash...

[black hills]

Decided I need a 990 adventure, if I finance part of it I can keep the CBR as well. I can borrow the $ for 5% so that is what I did. I think it will be worth what I pay in interest.

[McHack]

Yea,  well...  I did the financially prudent thing...   took all the cash I had, & dumped it into my car note.

Its a bikeless year for me...

[Kraz]

Yea,  well...  I did the financially prudent thing...   took all the cash I had, & dumped it into my car note.

Its a bikeless year for me...

I did the opposite - sold my truck, which allowed to me to finish paying off a lot of other smaller debts.  Guess I didn't really need that truck.

EDIT: I go through a lot of bikes, but I usually pay cash, even if that means pulling it off a CC (which I considered financing, for the purposes of the poll).  Loans are messy and mandate full coverage insurance, which I'm not into.

[McHack]

I did the opposite - sold my truck, which allowed to me to finish paying off a lot of other smaller debts.  Guess I didn't really need that truck.

EDIT: I go through a lot of bikes, but I usually pay cash, even if that means pulling it off a CC (which I considered financing, for the purposes of the poll).  Loans are messy and mandate full coverage insurance, which I'm not into.

Yea, the only debt I have is my SUV,  & I had to buy it post divorce, credit destruction...  so, I'm trying like hell to pay down a stupid rate.
Credit rating has recovered, but the effects still linger...  

[keithg]

Just bought a C14. 1.9% rate was a no brainer.....................

[black hills]

Just bought a C14. 1.9% rate was a no brainer.....................

Is it 1.9 on the balance or the financed amount?

[TriumphTiger1050]

Financing is not bad as long as you get an actual fixed APR that is low.  Alot of motorcycle companies now offer that instead of the high interest loans due to the economy and folks just not buying as many bikes.  I see alot of cash back rebates along with like 3.99% financing which is great.  Only drawback to financing is that while there is a lien on the bike your insurance is usally double that it would regularly be.  Or in my case several years back when I financed my Honda VTX it was.

My insurance on my 2007 Triumph Tiger 1050 for 1 year with full coverage to include $3k in accessories is only $275 which is not too shabby.  I have had the MSF course and I am 41 years old with never a ticket......fingers crossed!!!!

But financing is not a terrible thing.  If you use the bike for primary transportation then it is better than a car in my book.  Unfortunately, I live where the winter months get cold and we get snow so riding year round reliably is not always a certainty.

[black hills]

Financing is not bad as long as you get an actual fixed APR that is low.  Alot of motorcycle companies now offer that instead of the high interest loans due to the economy and folks just not buying as many bikes.  I see alot of cash back rebates along with like 3.99% financing which is great.  Only drawback to financing is that while there is a lien on the bike your insurance is usally double that it would regularly be.  Or in my case several years back when I financed my Honda VTX it was.

My insurance on my 2007 Triumph Tiger 1050 for 1 year with full coverage to include $3k in accessories is only $275 which is not too shabby.  I have had the MSF course and I am 41 years old with never a ticket......fingers crossed!!!!

But financing is not a terrible thing.  If you use the bike for primary transportation then it is better than a car in my book.  Unfortunately, I live where the winter months get cold and we get snow so riding year round reliably is not always a certainty.

my insurance has never changed due to a lien or not? Same coverage: '03 CBR954 $305/yr.   '11 KTM990Adventure $289/yr.???  the CBR has been the same price since I bought it.

[Cablebandit]

Unfortunately, I live where the winter months get cold and we get snow so riding year round reliably is not always a certainty.

Shew...I hear those 50 degree winter days can be brutal down there in NC.    

[TriumphTiger1050]

Shew...I hear those 50 degree winter days can be brutal down there in NC.    

Overall yes, but last two years have been rather cold and snowy!

[MKorn]

I paid cash for my DRz back in the fall of 2006, but i financed some of my C14 this spring!
its a left over 2009 ABS, i wasn't ready to buy, but i couldnt pass on the hugs savings.

[Dan]

 I would only ever buy cash, I would not get in to debt for the sake of a vehicle - with the possible exception of 0% finance, IF I already had the money sitting in the bank.

[hpc800]

For me it is a cash deal...I have never bought a new bike, been close...but could not bring myself to it. Things are very tight for me, single income married w/2 boys. My wife is in her Jr year earning her Masters in Elementary Ed. I'm working fulltime and working on my BA in Computer Information Sys. Mortgage, Car, CC payments...minimal going into savings. On the plus side No Student Loans Yet and Still doing the 401k. Plenty of Ra-men and Ketchup Soup...

[black hills]

I guess I look at it differently? I have $21k in a mutual funds making 10%+, borrowed $13k @ 5% for the KTM. Am I not still ahead? plus I still have the cash if something happens?? how is this bad financial planning

[Cricket1]

I guess I look at it differently? I have $21k in a mutual funds making 10%+, borrowed $13k @ 5% for the KTM. Am I not still ahead? plus I still have the cash if something happens?? how is this bad financial planning

It isnt... so long as the mutual fund is making that kind of return. When the fund drops by 20%, then not so much.

[black hills]

It isnt... so long as the mutual fund is making that kind of return. When the fund drops by 20%, then not so much.

true, but life's a gamble

[Skee]

I guess I look at it differently? I have $21k in a mutual funds making 10%+, borrowed $13k @ 5% for the KTM. Am I not still ahead? plus I still have the cash if something happens?? how is this bad financial planning

I did something similar to this years ago and kept track of the cash flows, including taxes, etc.  The differential in interest rates was about 4%, if I recall correctly.  At least in my case, insurance premiums were higher on a vehicle with a lien on it, and certain other little fees for document transfer.  Plus, I found out I could not change insurance companies to get a better rate without the bank's permission, which really PO'd me off, and of course the bank charged a fee to handle the paperwork.  In the end, I came out just slightly ahead.

Not as good a deal in hindsight as it looked up front.

Not saying it's bad planning, because you still have your assets as a cushion, just saying I didn't really come out ahead dollar-wise.

For me, it's now an all cash deal.

[Dan]

I guess I look at it differently? I have $21k in a mutual funds making 10%+, borrowed $13k @ 5% for the KTM. Am I not still ahead? plus I still have the cash if something happens?? how is this bad financial planning

Well for me this would be similar to the 0% finance situation - if I had the money invested and it was making a higher return than the interest on finance, then IMHO it makes sense to use finance.  Just my humble opinion.

[black hills]

  At least in my case, insurance premiums were higher on a vehicle with a lien on it, and certain other little fees for document transfer.  Plus, I found out I could not change insurance companies to get a better rate without the bank's permission, which really PO'd me off, and of course the bank charged a fee to handle the paperwork.  

For me, it's now an all cash deal.

Not sure if the insurance deal is a state by state thing or what? Here, through state farm it's the same price wheter it is financed or not?

[Cablebandit]

I'm sure it just an insurance company thing at best.  They obviously will require full coverage which you may not have if there is no lien.  I've never heard of the coverage being higher on a bike with a lien, all other coverage being equal.  

[darty411]

Paid cash from sale of another bike

[phaze5]

i have only bought my van and a couple of sleds on credit,and that was years ago, i figured sleds would sell the best if i needed to when i am not working which is winter, luckily i have not had to,

i built my house myself and bought the material every week with cash so i got no mortgage, however i think the government may know this and tax me accordingly making me feel like i have a mortgage,

i am trying to talk the old lady into an r/v and say screw your taxes,but now my grandkids have come to stay with us, so i fear i will never be able to afford a new bike, so i guess 3500 bikes will be my bike of choice haha good thing i buy the best my money can get and i am not that picky,

but just once it would feel good to say i will take that one in red hahaha

[Nodaclu]

After I lost everything with the collapse of my business, I was bike-less for about a year (prior to that, I had bought and sold 4 new bikes in a 3 year span).

After I started working again, I saved up some money, and last August, bought a slightly beaten and worn down 92 Honda Nighthawk for $800. A winter of work and some TLC produced a bike in the spring that I sold for $1,500. Added $500 to it and bought a 2007 Yamaha Majesty for $2,000. Decided I didn't like it, so I put a top box on it (great deal off of Ebay) and sold it for $2,250. Added $250 to that, and ended up with the bike I have today - a 99 BMW F650, for $2,500 cash.

From where I was 18 months ago (considering selling my car to pay the rent), if you had told me that I could pay cash for a BMW motorcycle within a year's time - even a used, 12 year old model - I would have said you were crazy. But a little seed money, some elbow grease and mechanical ability, along with adding a few hundred dollars to every sale really can make a difference in a big hurry.