Real cost of full timing

GoPackGo wrote:

mbrower wrote:

This has always been a major concern of mine. My plan as of now is to cash out my company retirement account and purchase new truck/fifth wheel the day I file my retirement papers. However, the financial markets may change and put a kink in my plans but barring a complete meltdown, a new truck will at least be in my future. This account is different than my IRA/401K account. I carry a 15k credit card with me when I travel so hopefully that would cover any major expenses that may come up.

First suggestion: I carry two credit cards - Visa and Discover. Sometimes a place will only accept a certain one so I'm always covered. Also, In case there is any kind of problem with one, then you have a fallback. Always have options.

I am going to go against the grain a little with my next thought and I fully expect to be crucified for it. Here we go -

Consider not using your company retirement account to fund a new truck purchase. Loan rates are at historical lows. You may very well be able to get 0% interest on a new truck from the manufacturer. Put the money from the company retirement account in the bank and make payments from that account. I make 1%/year at my credit union. If you have a 0% loan, then you actually MAKE money doing it this way. And best of all, you have a pile of cash available that would not be there if it had been used to finance the truck. You might even consider investing the money in something with a higher return and just making truck payments from the $7k monthly income. This strategy could yield a higher return. And I would consider going this route even if I could not get a 0% interest loan. I like having options.

The camper purchase is a little different. These things depreciate much worse then cars or trucks. So the first thing is to buy them CHEAP. I got mine from one of the large 'wholesalers' for 35-40% off list. This drives your initial cost as low as it can go. Then you may or may not want to pay cash, for all the above reasons I set out. Additionally, the interest on a fiver loan is most probably tax deductible. So you may want to compare the net after tax cost of a 10 year low interest loan vs keeping that money in the bank, credit union or invested in stocks/bonds and earning interest. I will be the first to admit that this will most likely not be a wash, but, on the other hand, you will have the original cash in the bank at the end of the loan period plus a paid off truck and fiver.

Just something to think about.

Tim

I think this is very smart and I believe most people would agree with you. After I had posted that, I began to wonder if purchasing a new truck would be the best use of that money. I think investing fairly conservative would yield a 6% return where its fairly common to get very low interest auto loans of new vehicles. A lot of food for thought with purchasing the camper. Ill have to give that a lot of thought.

Mark