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Brunswick selling SeaRay

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2 hours ago, Phillbo said:

A boat is a toy and should never be financed. 

I wonder how many people could take that advice??

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As a Chartered Financial Consultant....dont do business with people that say never.

As an example, I have a 3.25 loan rate on my boat and yes it is a 20 year loan.

Interest is tax deductible as a second home, my net cost is closer to 2.5, why would I tie up my money rather than use a banks.

I can keep my portfolio fully invested with enough liquidity to take advantage of investment opportunity if I find one attractive.

 

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I make more money borrowing the banks money for toys. Leaving my money in tax free MUNI bonds & collecting the interest.

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52 minutes ago, jeffk said:

As a Chartered Financial Consultant....dont do business with people that say never.

As an example, I have a 3.25 loan rate on my boat and yes it is a 20 year loan.

Interest is tax deductible as a second home, my net cost is closer to 2.5, why would I tie up my money rather than use a banks.

I can keep my portfolio fully invested with enough liquidity to take advantage of investment opportunity if I find one attractive.

 

That's why I said I wouldn't say never.  Banks money is relatively cheap right, as long as I am budgeting and it fits in there really is not a lot of harm, as the money I might divert from investing towards boat or a toy stays in my investing making way more that the interest rate on that toy is.  As long as you are smart, most toy rates are cheap at under 6% or less.

 

Now I don't know your whole situation nor do I want to, but I still find it hard to find positives in pushing out a loan 20 years on a toy, between interest accumulation and keeping up with depreciation seems like a tall task.  But then again what amount was financed, how much down etc.  You just take 100k stretched over 20 years at 4 or 5 % I don't see how you negate that sort of cost even with right offs.  And that's before you figure out how to pay 8-900 a month for it, and year 4 or 5 into it and need to sell and you owe way more than its worth.  Just a bad proposition for most.

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42 minutes ago, jeffk said:

As a Chartered Financial Consultant....dont do business with people that say never.

As an example, I have a 3.25 loan rate on my boat and yes it is a 20 year loan.

Interest is tax deductible as a second home, my net cost is closer to 2.5, why would I tie up my money rather than use a banks.

I can keep my portfolio fully invested with enough liquidity to take advantage of investment opportunity if I find one attractive.

 

I am in the same boat (pun intended).  All our 401ks are maxed out (and both wife and I have pensions), additional savings for retirement are set, and college fund for daughter is set up.  Financing a used boat (actually only financed half) allowed us to get on the water a year or two sooner.  We are just not in a position in our lives to buy a new boat.  I really wish we were.  

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So borrow money from a bank at some interest rate to spend it on a depreciating asset versus buying a comparatively depreciated asset that is only a few years old

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40 minutes ago, Dennis A said:

So borrow money from a bank at some interest rate to spend it on a depreciating asset versus buying a comparatively depreciated asset that is only a few years old

I don't think the argument is really used vs new here I think it is financing vs buying outright.  Theres nothing wrong with either if you are smart, end of the day the best way if you have the cash probably is to buy outright and not make payments and pay somebody else to use their money.  But with that said if you are smart with your money lending allows you to do two things at once per say, also for some you can make save money by using other peoples money,  rich people don't use their own capital to build or invest in something they loans, so what does that tell you. 

With that said there may be a few like Jeffk that understand what they are doing and are disciplined, but admittedly jeff I tend to get iffy when people say I have X experience, but with that said if you know how to play with money like Jeffk is, lending can be a smart way to go.  But I would be pretty confident in saying that the majority are not smart and disciplined and see lending and lending at long terms as way to acquire something they really cant afford.  Its pretty evident by the asking price of a lot new used boats when you see prices firm at 5-10-15k over books on used stuff and it sits.

For me and back to the original topic, ive bought and lended but I buy used.  We have a 3 month season and like I said boats aren't like cars.  a 10 year old boat with a few hours can be had for a fraction of what the model is going for, and they probably look relatively the same and probably do the exact same thing.  But its a free county people buy crap that they want to, its how the world goes around. 

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The cost of new in the size we wanted forced us to look at used. Lucky for us we found something that we could buy outright which I've found that many others we've met have done also. The only issue is I do like technology which our boat is light on and unfortunately technology loves my wallet so it's certainly a trade off of what you're willing to live with.

With the costs associated with financing I find it unreasonable for us. We're too old to be having another lengthy loan.

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9 hours ago, Phillbo said:

A boat is a toy and should never be financed. 

 

6 hours ago, Waterfun said:

I wonder how many people could take that advice??

 

It's not an advice, it is a principle that applies to most regardless of if they like it or not, practice it or not. Yes, it means that in many cases they cannot afford that bigger house, or a new SUV, or a boat regardless of if they know it or not, want to admit it or not. Unless your kids collage is already planned for, your retirement plan is already in place, and your investment safe, it ain't smart to do otherwise.

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Sometimes things don't have to be entirely black and white.  I agree that there are certainly people who finance more than they can afford, and in a way that the value of the boat can't support, and that's not wise.  I also agree that its crucial to plan, save, and work towards our futures, and our children's' futures.  But the things we can't deny are that our children are only children once, and there's no guarantee that we'll get a tomorrow.  I feel like my time on the water with family helps me be a better father and husband.  I think the relief I feel as I pull out of my driveway with my boat in tow headed to the lake on the weekend makes me better at what I do at work the next week.  Man I'm looking forward to spring already.  

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25 minutes ago, TNBrett said:

Man I'm looking forward to spring already.

Ditto!!

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14 minutes ago, TNBrett said:

Sometimes things don't have to be entirely black and white.  I agree that there are certainly people who finance more than they can afford, and in a way that the value of the boat can't support, and that's not wise.  I also agree that its crucial to plan, save, and work towards our futures, and our children's' futures.  But the things we can't deny are that our children are only children once, and there's no guarantee that we'll get a tomorrow.  I feel like my time on the water with family helps me be a better father and husband.  I think the relief I feel as I pull out of my driveway with my boat in tow headed to the lake on the weekend makes me better at what I do at work the next week.  Man I'm looking forward to spring already.  

Amen to that. Early on a NHRA Modified Production drag car got the best of everything and remained competitive in a tough class. Travel expenses were high too and I had a good woman that shared those times with baby daughter in tow. Took me a while to realize she did not share my passion and was there for me alone. Sold the car and bought a boat to "save money", and found a medium that we could share with friends and family. Looking back I could not believe that I could have been that self indulgent, and to be young and dumb is not a valid excuse. She's gone now after 44 years together, and I wish I had those early years to do over again. The lesson here is if you are fortunate enough to find something special that can be shared and enjoyed equally, then indulge yourself and others. Just make sure the level of commitment is there as boating comes at a cost. We were able to afford the big Sea Ray but it did require sacrifice in other areas. The stay in business things got covered first and foremost. College, home maintenance, medical care, charity, and the occasional run away to a new and exciting place always took priority after I woke up with eyes wide open. To this day my "little girl" (just turned 40) still appreciates time on the water as do I. Stay in your lane, buy what you can afford, learn how to maintain it and do so with commitment so when it's time to trade up or get out you have some value left.  W

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^^^ sound advice.

I am certain that I will "lose" over $300k in my life to this boating hobby. Between new boats, insurance, maintenance, depreciation, ... it adds up. However, the memories forged over the past 20 years and the next years with the loved ones I have, have lost, and will gain, are a fair trade for me. I live within my means, have retirement fully funded already, have paid/am paying for all my children's education, so it is money I can afford, and spend willingly. Did I finance some at the beginning- absolutely. Hit rewind and start again, would I repeat it - absolutely.

On the topic at hand, I think Brunswick is moving with the times, getting out of a business segment that is not a great fit for them, and hoping the brand has enough value now to lure in a buyer. Sea Ray buyers are loyal for the most part, and will follow the brand to a new owner if it sells. The new owner has some changes to make to transform it into a viable business, but I bet they figure those out and it becomes a profitable business.

I think it will be a foreign owner this time, looking to gain some North America market share.

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There is only 1 rule  ....I TRY  ....to obey MYSELF !!!!!

DO NOT BUY a toy I do not want a lot. I have learned LATE in life.  That a cheaper affordable substitute.   WILL NOT SATISFY ME ENOUGH.

AS I admitted about my brand new 2002 186 SSI 5.0L engine loaded. Sold it.  Realized I missed it a lot. Health is very good & not depressed. 

Bought another 2002 identical to the virgin.     :D  Life is good again.

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Remember this about MOST businesses / products.

There is ALWAYS someone more capable than me or you to take a for sale business & make it fly again...................................??

If the product can be sold directly on a web site.  Where the action is for the NOT wealthy.

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23 hours ago, Waterfun said:

I wonder how many people could take that advice??

It's smarter financially to think this way.  Sure it can be rationalized to finance a toy for 20 years.  After all people rationalize killing their spouse instead of divorce.  It's all fun and games till your caught!

Heres the boat industry problem.  The pricing goes up so much faster than inflation. A new boat is out of reach for most Americans.  Even before factoring in maintenance, storage, and mishaps.  Pontoons are popular with manufacturing because they are easy to build, and far more profitable.  Manufacturers have discovered that they can jazz them up with plush seats, nice stereo and some hp and they can get 70 herd all day long on a boat they can mass produce in 1/4 of the time and expense of a fiberglass boat.  At shows they put the behemoths next to a comparably priced boat, and newbies think, "wow I get so much more seating for the same money."

Another problem the industry has created with the 20 year note.  In the past a new boat buyer would finance for 5 years, and is usually ready to buy another within that time frame.  However with the long term loan, a buyer is so upside down that once he finds a way out from under his obligation, he has either lost his credit worthiness, or he was so beaten by the loss, that another boat is probably not in his future.  What I'm saying is the long term loans were a band-aid for an overpriced hobby.  But it came at the expense of killing future sales and keeping people in the hobby.

i bought an older boat for cash.  In 8 years I have doubled my investment with upgrades and freshening it up doing most of the work myself (another form of therapy).  All with cash in hand. it's all paid for.  I'm never stuck.  When I sell, I'll have money to use elsewhere.  I see this as freedom.  Upside down loans keep many Americans enslaved.  It's amazing how they don't even see it.

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3 hours ago, Wingnut said:

Amen to that. Early on a NHRA Modified Production drag car got the best of everything and remained competitive in a tough class. Travel expenses were high too and I had a good woman that shared those times with baby daughter in tow. Took me a while to realize she did not share my passion and was there for me alone. Sold the car and bought a boat to "save money", and found a medium that we could share with friends and family. Looking back I could not believe that I could have been that self indulgent, and to be young and dumb is not a valid excuse. She's gone now after 44 years together, and I wish I had those early years to do over again. The lesson here is if you are fortunate enough to find something special that can be shared and enjoyed equally, then indulge yourself and others. Just make sure the level of commitment is there as boating comes at a cost. We were able to afford the big Sea Ray but it did require sacrifice in other areas. The stay in business things got covered first and foremost. College, home maintenance, medical care, charity, and the occasional run away to a new and exciting place always took priority after I woke up with eyes wide open. To this day my "little girl" (just turned 40) still appreciates time on the water as do I. Stay in your lane, buy what you can afford, learn how to maintain it and do so with commitment so when it's time to trade up or get out you have some value left.  W

Nicely put!  I really need to get up your way, I still owe you dinner for all the advice you've given me.

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6 minutes ago, Duane2135 said:

It's smarter financially to think this way.  Sure it can be rationalized to finance a toy for 20 years.  After all people rationalize killing their spouse instead of divorce.  It's all fun and games till your caught!

Heres the boat industry problem.  The pricing goes up so much faster than inflation. A new boat is out of reach for most Americans.  Even before factoring in maintenance, storage, and mishaps.  Pontoons are popular with manufacturing because they are easy to build, and far more profitable.  Manufacturers have discovered that they can jazz them up with plush seats, nice stereo and some hp and they can get 70 herd all day long on a boat they can mass produce in 1/4 of the time and expense of a fiberglass boat.  At shows they put the behemoths next to a comparably priced boat, and newbies think, "wow I get so much more seating for the same money."

Another problem the industry has created with the 20 year note.  In the past a new boat buyer would finance for 5 years, and is usually ready to buy another within that time frame.  However with the long term loan, a buyer is so upside down that once he finds a way out from under his obligation, he has either lost his credit worthiness, or he was so beaten by the loss, that another boat is probably not in his future.  What I'm saying is the long term loans were a band-aid for an overpriced hobby.  But it came at the expense of killing future sales and keeping people in the hobby.

i bought an older boat for cash.  In 8 years I have doubled my investment with upgrades and freshening it up.  All with cash in hand. it's all paid for.  I'm never stuck.  When I sell, I'll have money to use elsewhere.  I see this as freedom.  Upside down loans keep many Americans enslaved.  It's amazing how they don't even see it.

+1.  The interest charge on a financed new boat is not the only cost, add the 20%, 15%, 14%, etc depreciation in years 1, 2, 3, 4, etc.   A boat or just about any other toy never makes pure financial sense.  

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13 minutes ago, Duane2135 said:

Nicely put!  I really need to get up your way, I still owe you dinner for all the advice you've given me.

Best friends in Sugarland, and sister is in LaMarque so perhaps dinner is on me in your hood.

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On ‎12‎/‎9‎/‎2017 at 0:57 PM, Duane2135 said:

It's smarter financially to think this way.  Sure it can be rationalized to finance a toy for 20 years.  After all people rationalize killing their spouse instead of divorce.  It's all fun and games till your caught!

 

Lol love it.  Yeah when I was in performance boats there were guys rationalizing 20-30 year notes on 300k boats, no different here.  It all comes at a balance, 20 years on a highly depreciated liability (note boat is not an asset) just doesn't pass the sniff test, some will sit here and throw numbers but they are just justifying it to themselves.  With that said you also have to live your only 30-45-50 once, and caskets don't have pockets, to each their own and everybody has different priorities.  For me Ive paid cash, lended, put money down and none down on toys.  I also max out my 401k and save.  Kids college well not my responsibility, they get a few bucks in there a month and it is what it is after 20 years.  IT will never be enough to pay for it all, nor was it designed too.  IMVHO everybody falls into this trap of its so expensive and my little johnnie cant pay for it, I don't buy it.  That's just my opine on that. 

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On 12/9/2017 at 0:57 PM, Duane2135 said:

Another problem the industry has created with the 20 year note.

IMHO, the 20 year note has enabled the boating industry to increase their prices faster than ever.

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1 hour ago, Waterfun said:

IMHO, the 20 year note has enabled the boating industry to increase their prices faster than ever.

Yep,  same with 7 year notes on vehicles and 30 year notes on student loans.  If i can pay the monthly payment then i can afford it!

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Yep, we've become a subscription based society with monthly payments for everything from cell phones, to cable TV, to Netflix, etc. etc.  Ask any car dealer their favorite customer and they'll tell you it's the  guy who wants to know how much the monthly payment is and not the cash price of the car.

I will admit that the last two boats I've bought have been on 10 year loans. I sold the first one after two years and I'd already paid 75% of the loan balance. I've had my new pontoon for 4 months and made about a years worth of payments already. 

 

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5 hours ago, Waterfun said:

IMHO, the 20 year note has enabled the boating industry to increase their prices faster than ever.

I agree, but at the cost of more "One & done" clients.  

It has to all but ruin a boater if they want out early, or want to upgrade.  Their upgrade options must be limited when upside down.

I have an acquaintance that bought a brand new Sea Ray 26' weekender (I don't know the exact model) in 2012.  He now has unexpected health issues.  They've sold their Harley, sold their RV, and are struggling to sell their boat, which has a 20 year note, and has been listed for a year.  They will either have it repo'd, or will have to cough up many herds just to unburden themselves.  All this while one is ill, not working and possibly terminal.  

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