Remember back a few days when I said I was very tired and I didn’t want to do any more chores around the house? (click here) I felt it was just time to let things go. For a while, anyway.
Well, a few days have passed and my mood, strength and attitude have changed. I did a little bit at a time BUT I have managed to somehow do all the chores that were pilling up and causing me to stress out. In retirement, as we age, we can still do everything we want BUT at a different pace. We need NOT to be so hard on ourselves (guilty!) and just take our time. It’ll all get done. Eventually.
We were able to afford and finance our brand new RV a few ways. First up, I am NOT a financial expert. I can not and will not ever give out financial advice. I will only tell you what we did. What works for us may not work for you. Also, we both know that going into debt in retirement is a serious no-no! I emphatically express NOT to do this. The only way we are able to do this is because we have the cash ready and available to pay for our new rig, in full, ASAP, in case of a calamity or upheaval. In this current financial environment however, with the low and lower interest rates being offered, we seriously thought about NOT exposing our own money. We decided to use THEIR (the banks) money instead of our own.
When I sold my Florida condo two years ago, I invested 90% of that money in a callable CD paying 4.25%. Hubs and I got a nice, hefty monthly interest check each and every month. However, now that the Feds have finally lowered interest rates, the callable CD got called. Bummer. Have you seen the paltry CD rates being offered now? Hubs and I did some research PLUS on the advice of a reliable source (don’t you just love that expression?) we invested a percentage of our condo money into a 10 year corporate bond paying close to 4% (BBB+ rated but not FDIC, so its all at risk, but the corporation has been around for a very long time and hopefully for the next 10 years). The remaining percentage we invested back into those paltry CDs (2.55% FDIC). We’ll still be receiving about the same monthly interest amount as before. Before we made any new investments, however, we were able to extract $5,000 cash to put in to our emergency liquid, money market fund (paying 1.75% FDIC).
DH and I have come to the conclusion that over the past years, we had made serious mistakes paying cash for everything. We’ve seriously depleted our retirement saving accounts paying cash for every single thing! Paying cash for cars and houses works out good ONLY if you’re going to keep the darn things for like forever. Which is what we did. We’ve since opted for those zero interest credit card loans and paid whatever we bought, over time, at zero percent. We paid the same amount the product sold for, but over time, instead of all at once. This system IMHO doesn’t work for RVs. RVs are traded in all the time. Lifestyles and needs change. So do RVs.
I sold my Newport RI beach house at an $87,000 “loss”. If I had a mortgage, there would have been no actual loss. Just a “paper loss”. I would have just come out with less money when I sold. Duh! Thankfully, when we bought our last RV, the Hummingbird, we financed it at 5.75%. The payments were $140 a month, over 2 years meant we laid out $3360. Combine that amount with the $1,500 down payment and we only paid out of pocket $4,860. That’s all that came out of our savings account: $4,860. The Hummingbird had a retail value of $17,500 but because we bought it in Michigan (right down the road from where it was manufactured) we only paid $12,500. Right now, on the open retail market, the Hummingbird can sell for $13,000. In other words, we were NOT upside down on the loan PLUS the Hummingbird retained a high trade in value IMHO. In addition, when we applied the Hummingbird as our down payment on the new 2020 Rockwood Mini Lite RV, we got a sales tax break.
Our current new 2020 RV has an original sales price of $32,000 and believe me, many, many buyers pay this amount. Don’t ask me how DH and I did it. We were in negotiations with the dealer for over 3 hours. There was no way they were letting us go without a sale. There was no way we were going to make a sale unless we got the purchase price we wanted AND the trade-in value we wanted too. Both DH and I have FICO scores in the 800s, plus we have the cash and the determination to get what we want. We’re the type of people RV dealers want. We can close a deal. BUT it had to be the way WE wanted it to be. NOT the other way around.
I’ll get to the end of the story: we got our new RV for $20,600. We got enough money on our trade in, that it was almost awash with our original loan balance. For the new rig, we only put down $500 new cash, which the dealer matched with another $500, making the down payment $1000. The dealer needed another $1,200 from us to make the loan ratio look more presentable to the bank so that we would qualify for the very low rate of 3.99%. No worries. We did NOT take one more cent out of our savings. Since we are now going to stay at a trailer/RV park in Florida there was no need for me to keep the state park reservations. I cancelled all the Florida state park reservations and got a refund of $1,600. I used that credit towards the $1,200 deposit as well as the $67 new registration fee. The remaining credit was used towards the deposit for the trailer/RV park. We’re reserved for three winter months (January, February and March 2020 @$20 a day) vs the two months we were going to stay at the Florida state parks (with only a water and electric hook up, plus we had to move every 14 days @$34 a day) We get full hook up (sewer, electricity, water) at this new RV Park, plus we don’t have to move AND this is our actual view from our patio: