Monday, September 13, 2010

Hot or Not?

So I'm still thinking about cars.. but here's the deal. We own multiple homes, and mine doesn't have a whole lot left on the mortgage (less than half I think), and I upped the mortgage payment by 1k a month in order to speed up the pay-off process. This means that my cash account is not growing as much as it was.. so buying a car (even with getting about 10k for my G35) would be a sizable chunk of money gone... that and John's going to be buying a Mercedes S550 soon.

The end result is that I'm probably doing more talking about buying a car now than actually writing a check.. but then I've been known to just be impulsive. As they said in Spinal Tap, there's a fine line between stupid and clever.

Anyway.. the field is definitely narrowed down to the 370Z and the Porsche Cayman S. Money considerations aside (I think there would be a 10-20k premium for the Porsche), which is the way to go? I really loved driving the Z, but the Porsche is just.. something about it really turns me on.

I was committed to white for a while also, but now I'm not so sure.

I'm just mumbling incoherently.


Dan said...

Is your mortgage still deductible?

Tom said...

Mortgage interest is deductable, ya..

Dan said...

I just didn't know if you had it as your primary residence. Why pay off the mortgage sooner with less savings when, essentially, the mortgage interest is tax deductible? Unless you're trying to free up equity in the house. It's not as great with deposit rates as low as they are now, but essentially the only thing you pay is your principal. Then again, you and John file taxes separately because you're not married.

Generally speaking if you make a lot of money paying down your mortgage and getting rid of that deduction is rarely a good idea. It might be for you since John makes more money (at least that's the impression I get).

Anyway, rambling now and it's 1:30 am. Gonna go to sleep.

Tom said...

I've done the math. The interest costs more than the tax bill savings for having the deduction.

In fact, I think the deduction is rarely, if ever, worth the interest paid... otherwise people would just borrow money to have an interest deduction.

Cash deposits are paying basically zero. My money market account pays zero now. This is because government bonds are about 2.5%, and the US inflation rate is getting near zero.. in fact probably going to start a deflationary period for quite a while. Cash will probably end up being better than CD's and such.

kris said...

If one does the math - and I need simple articles in newspapers with tables to work it out - there is huge money to be saved by paying even one extra mortgage payment per year. Huge.

Being free from financial obligations for the roof over my head (and out of a banker's clutches) is my No1 priority.

There was a tv series here called "Paid my mortgage in one year" or something - the moral of which was the sacrifice is worth it.

Nice car though!

Dan said...

On a somewhat unrelated note: What are property taxes like in D/FW?

Tom said...

Texas doesn't have a state income tax, so they make it up in property taxes. They are really high. The taxes we pay for local schools is many thousands of dollars a year also.

As revenue declines because property values have dropped.. Dallas county raises the taxes.

I'd have to google to see what the actual rates are, but they vary by county, and there's like 4 or 5 counties that touch DF/W I think.

Tom said...

And agree with Kris. The worst possible scenario for buying a home is getting a 30 year mortgage, with the least money down possible, at the limit of your pre-qualification amount.

Needless to say, that's how a lot of Americans bought their homes. They were told that the homes would endless appreciate, so they could take cash out or refinance later. When the bubble burst, a lot of people were screwed.

It still amazes me that people look at consumer goods in terms of what they can afford on a monthly payment.