Financing AP? Can you?

[dimitros]

I financed my student loans and they are locked in at less than 3% and that education is now paying dividends. That was worth it...

A house is worth financing these days because of low interest rates, reasonable expectation for appreciating in value and the tax benefits. Financing is a good idea if you don't have all the money up front.

Other than that why pay interest for a DEPRECIATING asset that you don't really need?!?

You won't become rich or stay rich by making bad financial moves. If watches are the one splurge in your life, and it makes you really happy, you are not otherwise into fancy cars, clothes, vacations, and lets say your double income with no kids and its your passion... Well life is short after all then do it. But otherwise I'd say you're crazy.

I agree with all the above posts, I buy watches and car with cash, and as Salman suggested 'like new' used to avoid a steep depreciation hit.

[thlax]

I'd pay cash/trade towards it. Otherwise. Do whatever you want.

[BIG_B_n_FLA]

Originally Posted by Kringkily

You could finance the watch but for a watch really? A car has functional use especially if it takes you to work and around town but a watch I wouldn't finance. I would wait for a bonus or something.

Any car will serve your personal necessary needs of transportation. A watch will give u time. Luxury is the key word of this debate. You finance a luxury car why not the luxury watch? L

[BIG_B_n_FLA]

Originally Posted by mfserge

Only cash payments for me. No cash = no watch. I understand your POV on 0% financing but for a piece of jewelery?? No thanks, cash all the way.

BTW, 30% savings for retirement??? Have you spoken with a financial advisor about that decision? If you're putting that into a 401k, then you are exceeding your yearly limit.

I max out the 401k and the roth. I also still save for rainy day. I studied finance in college.. no student or credit card debt either... Thank for mentioning it though.

[dimitros]

I see KK's point, depending on where you live you might NEED a car. If you need the car to get to work to make money in the first place, go grocery shopping etc-I can see financing it if you don't have the money up front to buy it. But in that situation why not buy a beater honda with cash than finance a 3 series. I don't finance luxury cars, only buy them when I can pay for them in cash.

You need shelter, you need food, you need companionship, you need to plan for retirement, you need health insurance, if possible you need to plan for higher education for your kids.
You need a mode of transportation, you need a means of communication,
but now a days you don't really need a watch.

It just doesn't make sense to spend that much of your income for something that you really don't need. Do you expect to make much more than your present level of income in the near future? How stable is your job? If I were in your situation, I wouldn't feel comfortable spending that chunk of my income unless I had all of the above taken care of and enough saved not just for a rainy day, but rainy 6 months to a year, because you never know in this economy.
And you might argue that a high end watch is a relatively liquid asset and that you wouldn't lose much if you had to sell it, but if you are selling distressed, you will likely do so for a loss. There is a much bigger market for used 5K rolex than a used 30K AP/Patek. Easier to move a rolex than an AP/Patek.

But hey its your money...

[HL65]

Originally Posted by dimitros

I see KK's point, depending on where you live you might NEED a car. If you need the car to get to work to make money in the first place, go grocery shopping etc-I can see financing it if you don't have the money up front to buy it. But in that situation why not buy a beater honda with cash than finance a 3 series. I don't finance luxury cars, only buy them when I can pay for them in cash.

You need shelter, you need food, you need companionship, you need to plan for retirement, you need health insurance, if possible you need to plan for higher education for your kids.
You need a mode of transportation, you need a means of communication,
but now a days you don't really need a watch.

It just doesn't make sense to spend that much of your income for something that you really don't need. Do you expect to make much more than your present level of income in the near future? How stable is your job? If I were in your situation, I wouldn't feel comfortable spending that chunk of my income unless I had all of the above taken care of and enough saved not just for a rainy day, but rainy 6 months to a year, because you never know in this economy.
And you might argue that a high end watch is a relatively liquid asset and that you wouldn't lose much if you had to sell it, but if you are selling distressed, you will likely do so for a loss. There is a much bigger market for used 5K rolex than a used 30K AP/Patek. Easier to move a rolex than an AP/Patek.

But hey its your money...

Actually it is quite easy to move $100K Pateks and other high end watches if you are in the right circles and have the knowledge. Trust me I know!!

But for most you are correct and I agree with the rest of your post as it makes perfect sense!!!

[tomato]

Originally Posted by caryyee

Cash for me too. The only thing I have ever financed is my house. Financing, to me, leads down a slippery path unless you have good self control. Once you finance one thing, you think, gee, that was too easy, and then you start financing more consumer items.
I'm reasonably disciplined, I understand a low interest rate can mean your surplus cash can be invested elsewhere while you pay off your watch, but with interest rates so low at the moment, the extra I get from investing, probably isn't worth it my effort.

I totally agree. It's a slippery slope. You may find yourself financing a whole host of things before you know it. Besides, interest rate would have to go up inevitably at some point. Since you sound like a financially savvy guy, why not use your investment skill on the entire 30k and you would get the most bang for your buck. Delayed gratification may also make you enjoy your AP more in the future. My 2 cents.

[psv]

OK, I give up. You chose to ask the question here on TRF. 100% of the respondents says that we don't finance a watch, many says they don't finance any consumption items. You keep twisting and turning, keep trying to motivate financing something like $30,000 luxury watch (on a salary only twice of the purchase price nonetheless).

Have it your way. Looking forward to the incoming thread.

[HL65]

Originally Posted by psv

OK, I give up. You chose to ask the question here on TRF. 100% of the respondents says that we don't finance a watch, many says they don't finance any consumption items. You keep twisting and turning, keep trying to motivate financing something like $30,000 luxury watch (on a salary only twice of the purchase price nonetheless).

Have it your way. Looking forward to the incoming thread.

Patrick-- Maybe I am doing it all wrong. If I did finance instead of using discretionary cash earmarked for watches I could really take my collection to a whole new level!

[BIG_B_n_FLA]

Thanks to everyone who has posted a POV about this subject. I have gained a valuable perspective on acquiring luxury items. I will continue to invest and save up and gratify myself later. You guys made this an interesting post to say the least...

[HL65]

Originally Posted by BIG_B_n_FLA

Thanks to everyone who has posted a POV about this subject. I have gained a valuable perspective on acquiring luxury items. I will continue to invest and save up and gratify myself later. You guys made this an interesting post to say the least...

Very smart!

[dalip]

As usual with these "financing" threads there's a consensus on that not being a good idea.

There has been very sound/solid advice given. It is most certainly what I'd also advise. Do not finance that much on a watch.

It is of course your choice OP. if you want to finance yourself for an AP then go ahead.

If it'll make you happy and you don't mind sitting in debt then that's your choice.

What I find extraordinary is the level of responsible and pragmatic thinking offered whenever these threads come up. There isn't this sense of just do it....who cares! Another fantastic aspect of this forum.

We will celebrate your incoming with you but it would have been irresponsible to encourage you to go into such a debt to do so..

[dalip]

Originally Posted by BIG_B_n_FLA

Thanks to everyone who has posted a POV about this subject. I have gained a valuable perspective on acquiring luxury items. I will continue to invest and save up and gratify myself later. You guys made this an interesting post to say the least...

Good for you

[dimitros]

Originally Posted by SteelerFan65

Actually it is quite easy to move $100K Pateks and other high end watches...

Yes, a lot of them seem to move right into your hands!

[brian8121]

Originally Posted by SteelerFan65

Patrick-- Maybe I am doing it all wrong. If I did finance instead of using discretionary cash earmarked for watches I could really take my collection to a whole new level!

Hell, let's just start a TRF LBO firm and take over all the independent watch companies.

[BIG_B_n_FLA]

Originally Posted by psv

OK, I give up. You chose to ask the question here on TRF. 100% of the respondents says that we don't finance a watch, many says they don't finance any consumption items. You keep twisting and turning, keep trying to motivate financing something like $30,000 luxury watch (on a salary only twice of the purchase price nonetheless).

Have it your way. Looking forward to the incoming thread.

It's not a 100% more like 95%.. lol
Ps I don't buy notion that everyone here on TRF buys cars and watches out right. I have seen lease payment on a Mercedes Benz S65 AMG that was above $2k a month. My mentor is a CFP so I know exactly how wealth is created and how most wealthy spend. It sounds good to say I bought cash but really....lol

[psv]

Originally Posted by BIG_B_n_FLA

Thanks to everyone who has posted a POV about this subject. I have gained a valuable perspective on acquiring luxury items. I will continue to invest and save up and gratify myself later. You guys made this an interesting post to say the least...

Wise move. That strategy will take you places.

[brian8121]

Originally Posted by BIG_B_n_FLA

Thanks to everyone who has posted a POV about this subject. I have gained a valuable perspective on acquiring luxury items. I will continue to invest and save up and gratify myself later. You guys made this an interesting post to say the least...

Wise choice IMO. Looking forward to the incoming thread!

[HL65]

Originally Posted by dimitros

Yes, a lot of them seem to move right into your hands!

And none financed!!

[BIG_B_n_FLA]

Originally Posted by psv

OK, I give up. You chose to ask the question here on TRF. 100% of the respondents says that we don't finance a watch, many says they don't finance any consumption items. You keep twisting and turning, keep trying to motivate financing something like $30,000 luxury watch (on a salary only twice of the purchase price nonetheless).

Have it your way. Looking forward to the incoming thread.

It's not a 100% more like 95%.. lol
Ps I don't buy notion that everyone here on TRF buys cars and watches out right. I have seen lease payment on a Mercedes Benz S65 AMG that was above $2k a month. Things like wedding rings, wedding receptions, vacations and even plastic surgery are financed by wealthypeople . My mentor is a CFP so I know exactly how wealth is created and how most wealthy spend. It sounds good to say I bought cash but really....lol

[emagni]

Originally Posted by jenniferjanef

.

I believe OP was trying to say he makes $67K a year but save 30% of it every pay check towards saving/retirement.

[jenniferjanef]

Originally Posted by emagni

I believe OP was trying to say he makes $67K a year but save 30% of it every pay check towards saving/retirement.

Got it.

[patrike]

Cash only :)

[travisb]

Always payed in full.
I couldn't justify making payments on a watch..

[Watchonisto]

Cash for me

[patek.wis]

If you finance a new watch vs buying a used watch in cash - you can debate that the devaluation in circumstance A; can be thought of as interest - therefore you lost 30% of the watch, or an interest charge of 30% for the first year.

If you can finance a used watch, your math makes sense at 0%. You need to take into account current asset value when you play with numbers like this. This is how so many people got themselves into debt and went bankrupt (0% - buy now pay later)

[iLLGT2]

Originally Posted by SteelerFan65

Would never buy watch for anything but cash and excess cash at that!

Agreed... My whole collection is cash only , even when badgered occasionally with a financing plan ! Only way to be IMO, I wouldn't feel comfortable financing a 30k watch, same usually goes with my cars...

People argue liquidity this and that, but, if you can then why not?

[BIG_B_n_FLA]

I have never heard in my life so much crap of bull*** The TRF is so full of it. The number of folks that claim to pay in cash fully is preposterous. They claim that they pay in full cars, watches and even wedding rings. The automotive industry especially the highend would not survive if everyone on TFR paid in cash nor would Rolex...lol you guys need to give it break and be truthful... This is coming from a CFP by the way.

[TSW]

Originally Posted by BIG_B_n_FLA

I have never heard in my life so much crap of bull*** The TRF is so full of it. The number of folks that claim to pay in cash fully is preposterous. They claim that they pay in full cars, watches and even wedding rings. The automotive industry especially the highend would not survive if everyone on TFR paid in cash nor would Rolex...lol you guys need to give it break and be truthful... This is coming from a CFP by the way.

Really

[HL65]

Originally Posted by BIG_B_n_FLA

I have never heard in my life so much crap of bull*** The TRF is so full of it. The number of folks that claim to pay in cash fully is preposterous. They claim that they pay in full cars, watches and even wedding rings. The automotive industry especially the highend would not survive if everyone on TFR paid in cash nor would Rolex...lol you guys need to give it break and be truthful... This is coming from a CFP by the way.

Well young Byron you have a lot to learn in life and this is coming from a cash buyer!

If you don't like the answers and think TRF is so full of crap I'd be happy to hit the eject button--just say the word.