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Old 12-24-2012, 10:22 AM   #1
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hey guys
on our side of the world we are used to buy our things cash (cars, boats, etc etc)
pretty much the only thing we finance is our house but even there we like to have some own money in it.
have been over at youre place several times and am still ashtonished by the different way you guys handle these things
1 salary to pay off all the creditcards and downpayments and the second one to pay for the living
have i been talking to the wrong people or is this really the way the average american deals with money
i looks like a total different lifestyle
rens
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Old 12-24-2012, 02:32 PM   #2
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Rens......You haven't been on the Baylinerowners website have you? That was a big discussion on that website and using that as a way to judge which way you buy things, here goes..... Americans love payments. IMHO I thought more boaters from Canada paid for their boats with cash than Americans which used the a payment system for buying their boats.Now I'm not saying one method is better than another, I just got that impression from reading the threads from when this was discussed.

Myself, I have a 20 year boat loan. I don't mind the monthly payment and used the interest when doing my income taxes at the end of the year to get a little bit bigger chunk back from uncle sam. I put 30% down to make the monthly payment at where I wanted to pay. This is me. I am OK with this. Some people might not be this way.

Some people this is the only way they can afford anything, using the Credit Card, and it is a shame. Our middle class is losing ground.

My wife and I are lucky enought if we do use our credit cards they are paid off at the end of the month. I am 2 years away from retirement and don't want any expenses that are not needed.

So I hope I have answered your question. I think debt is handled or thought about in very different views depending where you live around the world.

Merry Christmas

Roger
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Old 12-24-2012, 02:50 PM   #3
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Roger, how can u claim the interest on your tax? Over here only allowed on 2nd house if rented
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Old 12-24-2012, 02:59 PM   #4
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your total tax rate is 85% of your income, ours is more like 28%.

The rest of the taxes here are consumption tax, drive a car more more gasoline tax.... etc.

All dollars are deprecating. even with 1% inflation rate.

So, a credit card loan at 1.9% or 3.9% is actually free money. This is why people lease cars here.

Boats are different, they are considered to be a 2nd home, if they have a galley and bathroom, so it is a tax right-off, or loop hole.

If you pay 7% boat loan, and that's $6,000.00 in interest for a year, you write that off on your taxes, and get the $6,000.00 back.

Probate tax, is the death tax, where 1/2 of everything you made is returned back to the state, so the money cycle is, work your ass off, until you can pay cash, you'll be too old to use it. then die and give it all back in probate tax.

Our founding fathers did not want a self generating aristocratic like the Lords of Britannia, who's upper class never worked.

So, your family house that has been used for generations un-tax, ours will goto thru probate and if the family is lucky can pay the taxes to keep it in the estate, then divide it among the siblings.
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Old 12-24-2012, 04:00 PM   #5
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I have a considerable amount of equity in my home so I used an equity loan to purchase my boat. I pay 2% interest and once the home is paid off in 5 years I'll put the monthly mortgage payment towards paying off the equity loan. Plan is to be completely debt free (all cars are paid off and I carry no credit card debt) within 7 years including the boat.

I can't take the interest deduction on the boat since I am already taking it on a second home.

When I retire in 15 years the current boat (if I still own it) will be sold and I'm buying a sail boat and heading south
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Old 12-24-2012, 06:13 PM   #6
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you should carry a mortgage for as long as possible for the for the tax deduction.

even if your use the home equity line at 1.9% to get the money returning more like 7% in the market.

The problem is every retiree is in the same, boat, with liquid cash, that is only deprecating.... like the size of your box on corn flakes, still $3 bucks just 1/3 the size of five years ago.

15 years from now your boat will be worth $0..... like the rest of them.....
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Old 12-24-2012, 08:23 PM   #7
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OK
we can only deduct interest payed on a mortgage for a house.
but then that's about 50% refund
loans for cars or boats are non deductable (if they were i wouldnt pay cash)
saw something about taxrate.
income taxes in my country are 32, 42 and 52%
i pay the max so not happy at all
but would rather pay 52% than 42% (income would be lower :0))
on the other side, our social system is one of the best in the world and included in the taxrate
rens
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Old 12-26-2012, 04:28 PM   #8
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Quote:
Originally Posted by rens914 View Post
1 salary to pay off all the creditcards and downpayments and the second one to pay for the living
have i been talking to the wrong people or is this really the way the average american deals with money?
Who said anything about 1 salary? I would venture to say most households are dual income. Obviously that is not the rule. I couldn't afford to boat if my wife did not have a career of her own.

Also note, that in the US, there is not a tax deduction for boats, per se. There is a tax deduction on the interest paid on any property in which you can reside in. Obviously that includes a primary, secondary, tertiary loans or Line of Credit backed by the equity of the property. However, this also includes any RV or boat which has a bed, toilet facility, sink and stove. So, there are many boats which don't qualify. The deduction is only on the interest paid on the loan for that property.

Yes, the US is a consumer driven lot who tend to manage ourfinances based on the gross income and monthly debt payments. Not unlike most of the countries in the world LOL
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Old 12-26-2012, 06:25 PM   #9
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Quote:
Originally Posted by shrew View Post
Who said anything about 1 salary? I would venture to say most households are dual income. Obviously that is not the rule.
Single income here. If I had a wife with another full income we'd be retired by now
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Old 12-26-2012, 10:55 PM   #10
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another word on credit..... its better to lose someone else's money then yours.

so,

Cash for $150k boat, your out $150k.......

Loan for $150k, your out $4,200.025 in base principle, and you filed for bankruptcy for the other $145,799.75....

Think like the rich.... and don't expose your wealth to harm.....
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