Guy and gal have no debts aside from a 2011 motor vehicle currently worth $20k, encumbered for payout of $19k. Current repayments are $440/month. Guy and gal have cash in bank that could pay off loan but would leave them short if a crisis hits. So guy has trouble convincing gal this is a good idea, frees up $440/month for saving and eradicates debt? WTF why is this not so obvious to her??? please explain especially if any gals out there PS thats guy to the left
Grab the figures for saved interest payments if you pay off the loan now rather than slowly over time... they should speak for themselves. Besides your buffer will replenish itself quickly enough with the extra money you can save once you are free of the loan.
Take gal out for dinner. Buy gal presents. Spend less time on interweb and more time working to buy gal a house, holiday, nice clothes etc. This will make great reading for gal as well. You need to balance it up hiho.
Can't help but can we cry on each other's shoulders. My gal bites my head off anytime I mentioned cashing out of one or two existing, overpriced houses in order to reduce total debt so have been forced to diligently reducing the outstanding debts through repayments (whilst trying to stack). And then a fortnight ago my gal says she wants to buy ANOTHER house ffs!! Be easier convincing EarthJade to vote for the Liberal Democratic Party I swear. She wants to live in a place where the house prices have halved since 2007 and says "But they're sooo cheap! How can you not want to buy?" Aaaaaaaahh!!!!
In all seriousness, I would do this ^^^^ with one suttle difference. Don't show her the savings to be had by paying out the loan - women love savings, because it means they can spend more. Just like at a SALE! Instead, show her how much the car will really cost after interest payments for the full term of the loan. If this doesn't convince her, then just be like the rest of us and keep banging your head against the wall. Eventually your forehead goes numb and you don't feel it anymore.
She obviously feels richer having the money in the bank and even though paying off the debt at once would be cheaper in the long run, all she sees is that she currently has thousands in the bank. If she pays off the debt now, she has $0 in the bank. She doesn't even care about having the debt, all her friends have debt as well. See it's not that difficult to understand their .....uh "logic". PS: Well I think that's the case :/
Message to your gal from another gal, 1. Pay the car off, your guy is absolutely without doubt right ! 2. Or, if you really can't face that, what about a compromise > paying half the debt off now, debt would be paid off in half time and can at least salvage half the interest $.
pay off car paying interest on a depreciating 'asset'....one of the worse things you can do financially
So long as the Car loan is above 7% interest rate then it's a no brainier, pay out the loan and save up new cash that earns interest rather than paying interest Other than my first car (which wasn't all that fancy) I have never had nor would ever get a car loan, I only get loans under the true inflation rate which limits me to housing loans only atm
Not enough hypothetical information. Will there be a penalty for paying out the loan early ? Can the monthly repayments be increased ? Can half the cash be kept and half paid off the loan ? Gal sees the cash in bank as a safety net in case of crisis. She does have a point - a fully paid off car is not much use in a crisis. In a sudden need of cash, car would have to be sold off, most likely at a large loss.
Unfortunately, it is impossible to read and understand the first book ... although the sentences look readable when first looked at, they actually have no logical structure ... they jump all over the place, are continuously contradictory, make impossible assumptions, and totally deny absolute facts. I understand the condensed version was based on arbitrarily picking pages, passages and words out of the complete version (of which there were numerous editions, and which all contradicted each other), and then haphazardly joining them together (I believe so the pages looked neat and tidy and pretty). Rumour has it than a brave and misguided man once attempted to read this book sentence by sentence from beginning to end, but after labouring through the first three pages, he started ranting and raving insanely, and then mysteriously disappeared down a wormhole never to be seen or heard from again. As a result, most man don't even attempt to open this book these days, let alone try to make any sense of what is inside it. For the few that do read the odd passage and believe they have understood it, they always eventually find out they seriously misunderstood what they thought they had read. P.S. thanks for the picture ... I am about to email it my wife
Compromise - pay off half the loan, invest the other half. Use a few dollars to buy her the 50 Shades of Grey scam/series. Alternatively, sit down and ask her to calculate the net result after X amount of years it would take to pay off the car. Girl reaches own obvious logical conclusion. Second alternative - seek out this exact advise in an article online, preferably as MSM as you can get. Show girl article. Third alternative - I just realise Chilli already said my first and third alternatives ... and Chilli would know whats what. Incidentally I've been in a similar situation - except missus had a 20K personal loan at 15%, with redraw capability, and 3K in savings! I said "um, if you can redraw, with no extra charge, then put the 3K against the loan!". Anyway, logic and nagging prevailed eventually. I think some people believe savings and loans are two completely unrelated things - and 'net worth' never comes into it.
