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A horrible calculation, that I just did and potential decisions
07-18-2019, 02:55 PM
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#1
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Recycles dryer sheets
Join Date: Mar 2016
Posts: 85
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A horrible calculation, that I just did and potential decisions
Greetings all.
This week I decided to do my DTI (debt to Income) calculation, which is 16%, then I did my back end calculation, which includes all expenses, minus entertainment comes to 21%. Both of these made me very happy, as it shows we are doing well (which we are now, after some setbacks).
However, I then decided to see how much interest I was paying versus my 16% of fixed bills. Our only debt is a house payment and pool payment. Needless to say, of that $, 40% is Interest.
To put it into context:
Income 15400 after taxes (this is the number I used)
Debt: House (3.5%) and Pool (5.25%): This includes all escrow: $2561
Bills: minus food, gas, entertainment: $3300
Interest is $1300 ish of the $2561. The truth of borrowing to buy a house!
So we are putting $5K per month towards the Pool payment and will pay it off over the next 12 - 18 months.
Things we are tempted to do: We owe $72500 ish on the Pool, and I’m tempted to take out enough 0% credit cards and put it on it. I think this would save us some money!
Has anyone done anything like that?
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07-18-2019, 03:10 PM
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#2
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Confused about dryer sheets
Join Date: Jan 2014
Posts: 1
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Yes, you could do it on a 0% card and save money. Try finding a card that offers no more than a 2% transaction fee.
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07-18-2019, 03:14 PM
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#3
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Thinks s/he gets paid by the post
Join Date: May 2016
Location: Mid-Atlantic
Posts: 2,676
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We were offered 0% loans for much smaller projects, and we took it for a deck, which was roughly $5k (this was almost 20 years ago). It was 0% for a limited time, though, and we made sure we would be able to pay it off before that time, because this was one of those "gotcha!" loans where all the interest is just postponed, and will all come due if you miss a payment.
We actually had cash ready to pay for a car in 2017, but were offered 0% financing, so we decided to take it and use that cash to pay off the rest of our mortgage early. This 0% loan is not as tricky, so I'm really not worried about it.
Basically, check the terms on those 0% offers, and what the rate will be when it expires. It might work out to be more money if you can't pay it off soon enough.
Also consider, if you open up a few new credit cards and use most or all of the credit lines on them, your credit score will take a hit. You probably won't need to apply for a mortgage, but what about a car loan? If so, you might wind up paying a much higher rate.
__________________
-Looking to FIRE in the mid-2020s, which would be our mid-50s.
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07-18-2019, 03:17 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,985
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WADR I can not comprehend borrowing money to install a pool. My only advice with your income would be to pay it off ASAP. By cutting expenses I'm sure you could pay if off sooner than a bunch of gyrations with credit cards. However bear in mind I'm a simple plodder.
__________________
Took SS at 62 and hope I live long enough to regret the decision.
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07-18-2019, 03:18 PM
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#5
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Moderator
Join Date: Nov 2015
Posts: 13,917
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Most 0% cards are limited time - after an intro period the 0 becomes a normal rate. Could you get approved for multiple 0% cards and then pay it off before they become full rate? If not, be honest about how long it would take, and then compare that to the 5.25 you have currently.
One little slip, like a day late on one payment, can also void your intro and jack up your rates. So if you do go that route, setup auto pays on any credit card to avoid the risk.
I tend to be risk averse, and would just pay it down as is, aggressively.
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07-18-2019, 03:23 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Sep 2013
Location: Ventura County
Posts: 1,433
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At least show us a picture of what kind of pool 100 grand will get you these days.
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07-18-2019, 03:29 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Oct 2015
Posts: 2,326
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Quote:
Originally Posted by stepford
At least show us a picture of what kind of pool 100 grand will get you these days.
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My thoughts too..... better be one heck of a pool....
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07-18-2019, 03:36 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Dec 2014
Location: St. Charles
Posts: 3,919
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Quote:
Originally Posted by stepford
At least show us a picture of what kind of pool 100 grand will get you these days.
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Maybe it was "only" a $75,000" pool, but still......
OP,
You are taking home about $185,000, after tax, you put in an expensive pool, you must own a house worth at least $500k (or the pool makes no sense), and NOW you are wondering why you are paying so much in interest? Really?
I don't mean to be mean ( ), but if the interest on the pool is causing a spending concern, you might want to look at ALL your spending.
Just My Humble Opinion.
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
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07-18-2019, 03:38 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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must be one heck of a pool
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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07-18-2019, 03:39 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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Quote:
Originally Posted by foxfirev5
WADR I can not comprehend borrowing money to install a pool.
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have you ever lived in houston?
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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07-18-2019, 03:45 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,985
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Quote:
Originally Posted by Big_Hitter
have you ever lived in houston?
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If borrowing money for a pool is what it takes I'm out.
__________________
Took SS at 62 and hope I live long enough to regret the decision.
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07-18-2019, 03:57 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Not knowing what the cost of building a pool is now, I looked on the Web and found some examples. Prices seem to vary all over the place.
Following is a list of 93 real-world examples.
No.7 is an $85K pool in Maryland.
PS. Not all the pools were constructed recently! Some had the date as early as 1984. The listed costs are therefore not meaningful.
https://www.inyopools.com/Blog/how-m...orld-examples/
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"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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07-18-2019, 03:58 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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only if you can't pay cash and you are tired of sweating 24/7
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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07-18-2019, 04:27 PM
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#14
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Recycles dryer sheets
Join Date: Mar 2011
Posts: 120
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Im putting in a pool in September. Cost will be around $48,000. Nothing special, 12 x 24, salt, solar heater, cage. My house is worth probably.....$250,000 without the pool. Will be worth every single penny, I plan on being in it every day (Im in Florida, where else).
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07-18-2019, 04:35 PM
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#15
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,727
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Friend's son who works for Dell in Austin, TX just put in a pool. Cost was $100K, of which a load of that was for blasting the rock.
I Houston, we have Beaumont clay and digging is easy. What's not easy is keeping the pool from floating up out of the clay.
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*********Go Yankees!*********
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07-18-2019, 05:33 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,588
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A pool came with the house when we lived in Houston. We found that you could basically buy the same house with or without a pool for the same price. That was over 30 years ago.
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I have outlived most of the people I don't like and I am working on the rest.
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07-18-2019, 05:43 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 9,958
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You didn't realize this before you borrowed for the pool
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07-18-2019, 10:05 PM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Holy crap! Can't imagine going into hock for that much for a pool.
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"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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07-18-2019, 11:31 PM
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#19
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Moderator
Join Date: Oct 2010
Posts: 10,723
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When I was a kid, we had a "pool man", and I was left with the impression that "pools suck". So to recap, all I did was watch the guy, and I was thinking "WTF"? Why bother?
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07-19-2019, 04:57 AM
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#20
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Administrator
Join Date: Apr 2006
Posts: 23,037
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Two of my immediate neighbors removed their pools soon after they bought their houses. Too much work, too little benefit in this location. Liability exposure also drives up your insurance.
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Living an analog life in the Digital Age.
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