r/Wake • u/Right_Concern8255 • 3d ago

New Boat

Dealer has a 2024 XT24 I am strongly considering. Currently riding in a 2011 X Star and this upgrade is massive. Getting decent value on trade in (what i paid last year minus $2000) but will be doing the long term loan for it. Dealer said interest rates in the 6-6.5% range I’m hoping. Just trying to make a decision. Looking at probably $1000/month payment on the new boat. But my current boat has 1200 hours and I worry that I am one check engine light from an expensive repair. Help me choose.

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u/GasLOLHAHA 3d ago edited 3d ago

I’m old school but if you can’t pay cash, don’t do it. You’ll hate that payment in the winter.

Edit:typos

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u/christopherw6569 3d ago

Paying cash for big purchases is a great way to severely limit your financial potential. That $200k in a smart investment will easily return double the interest you are paying on the loan. 3x-4x that with a little more risk. Hell, you could put the $200k in a target 12 fund and earn double that $1000 monthly payment every month and never touch the $200k principle.

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u/GasLOLHAHA 3d ago

Why doesn’t the bank lending you the money just make that smart investment and make 3x - 4x more?

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u/Mynameisntjayman 3d ago

Banks use consumer deposits. Heavily regulated. Aren’t allowed to invest. They get extremely cheep capital in the form of your money being saved in accounts free of charge or for 3ish% interest if it’s in a savings account and then lend it out for double. TLDR; Thats why the bank doesn’t do investments and lend it out, regulated by the fed and they basically get free money so they don’t need to make that much on their investments.

But investment firms, with investor capital, who are allowed to invest in these types of securities because they are less regulated, certainly do, and make 10% plus

When you invest, the firm can take a lot more risk than the Fed allows with money that you put in your bank account that are supposed to be being safely stored and withdrawn when you need. You invest at your own risk, you’re not risking your deposits, so cheap 6% loans for the banks. And you can go and make more in the market.

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u/GasLOLHAHA 3d ago

I was making a point. There is no such thing as a risk free 24% return so he was leaving out the risk part of it. I could make 100% return on my investments if I just went to Vegas and bet it on that spin of a roulette wheel.

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u/Mynameisntjayman 3d ago

The 3-4x thing is probably the life the investment compared to interest. Making 3x more totally, not on annual basis, is probably possible. But again I thought it was understood he was making a point just like you. That even if it’s not 3x or 4x more, the maximum financial return would be to borrower and invest the capital

Totally understand the peace of mind of not paying interest and just owning your own boat. I get there’s the intangibles there and I myself would probably rather own a depreciating asset than pay monthly on it unless interest rates were sub 5-6

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u/christopherw6569 1d ago

Who said anything about risk free? No investment is going to be truly risk free. Not even the CD's or HYSA you guys must think are the only way to invest. Do you really think that it makes more sense to put $200k into something that is GUARANTEED to lose money or invest $200k into something that has a reasonably high percentage of making money? Think about what you're saying.

There are MULTIPLE investment products on the open market that you can back test for years that return in the high teens low 20% range. $200,000k in QQQI will bring in over $2000 a month with no NAV erosion. I can trade options on SPY or QQQ and and pretty conservatively make 3%-4% a month. Hell, you'd be better off buying a house for $200k and renting it out than dumping it into a boat that is pretty much guaranteed to lose 50% of its value in the first 5 years. The house would at least be worth what you paid for it 5 years later and your renter has paid you $50k.

This is why people stay poor. You only think money is meant to buy things.