Financing a motorcycle isn't always bad. Here's why

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Financing a motorcycle isn't always bad. Here's why
We've been told, pay cash for your toys, or you can't afford them. Is that correct? What about when financing rates are very low? What if you have the cash to buy the bike - are there cases where you might still want to finance?
Let me show you why I chose to finance my BMW R1250GS instead of paying cash, and how I will have more money at the end of my 4-year loan than I would have if I paid cash. No gimmicks, just simple math!
#debt #finances #r1250gs #money
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@BigRockMoto 2 года назад

NEW MERCH SHOP ! : big-rock-moto.myspreadshop.com/ ROCKY MOUNTAIN LINK: www.rockymountainatvmc.com/?ref=1053&BigRockMoto&

@Speedytrip 2 года назад

Great video. Let me summarize: It's always a good idea to buy a motorcycle, regardless how you do it and where the money comes from. Never let anyone convince you otherwise :P

@MotoBeemer 2 года назад

This^^

@lanceharrison6073 2 года назад

🤣🤣😃👍🏻🏍

@mike.thomas 2 года назад

😂 good one!

@scottelton5451 2 года назад

“Dave Ramsey is coming down the hall and he is pissed!” Hahaha 🤣

@dimitrikolijn8334 2 года назад

What you forget to add in is risk. What if during the 4 years you finance the bike you loose your job and can’t make the monthly payments? Remember 2008 or 2020 how many people lose their jobs that they thought would never happen. Life is not just simple numbers. A lot of thinks can happen over 4 years. Paying cash I own the asset. Financing the asset owns me.

@terrystratford1235 Год назад

This happened to me! They offered to come and sort out my financial situation! They forgot to tell me it would cost me £500 for 30mins of their time! Also £175 to take it to auction! It was a £6500 bike, shop said they would pay me £4500 cash! Finance people said they would auction it and try to get the very best price! Yeh, £1600 minus fees! So basically they screwed me into handing over the bike, and get f all for it! But they don't care! They know the outcome, it's never good for the customer! Buy it cash! Hard earnt saved spare cash!

@ralphwarom2514 Год назад

I mean, if I have 50,000 $ lying around I see no reasons to give the bank free money. I've worked for Financial institutions , (Marketing Department) and all I can say is that getting into debt is never a good idea. Just buy a cheaper used motorcycle or a cheaper model and go enjoy yourself. It's the institution that always wins. Granted finance is not the worst thing in the world.

@flippy66 6 месяцев назад

@@terrystratford1235 Who are "they" mate? And why did you auction it (the worst way to sell) rather than selling it privately? You just seem a bit inept.

@flippy66 6 месяцев назад

@@ralphwarom2514 If you worked in marketing then your experience is irrelevant to financial advice. It's actually stupid to turn down free (or very cheap) credit, as it's low risk and you build up a positive credit score. I financed my bike using a 0% credit card, because I want free money from the bank, which I'm getting. And since the money isn't tied to an asset, I can sell that asset whenever I please, unlike with vehicle finance. Stick to marketing.

@terrystratford1235 6 месяцев назад

@flippy5118 they....finance company! I was young and stupid! I was out of work due to a bad back injury. I was making min payments! The system fuked me! I had 2 offers of 4500 for the bike, but I was told it was in my best interests to let them sell the bike to have interest free repayments! I will never get a loan again! If you can't pay for it, don't buy it!

@SuPhCh 2 года назад

The monthly benefit of that $27,095 needs to be added to the cash side, so that at 7% I get around another $4,247 so much closer. The other Con not mentioned here is the risk element of investing, that 7% is not guaranteed and if you hit an unlucky period you could earn much less or even end up losing money over that period. So ultimately in this situation its a case of does the person want the less risky option with less potential gain or the more risky option with the more potential gain. For me that extra $1500 is not worth the risk of the extra $25k being invested. Solid video though and well explianed.

@garydiane1577 2 года назад

When people start to assume 7% is conservative, and almost guaranteed is when we have a big crash. That you’ve been able to get 7% the last 10 or 20 years say look out below. No one knows the future, but the only real guarantee is .5% on a CD.

@mikemerrill175 2 года назад

That 30 k bike worth 15 with a note due of 20 is where this story ends.

@BigRockMoto 2 года назад

thank you

@shavedape 2 года назад

@@garydiane1577 if we could all get 7% returns not many of us would even bother working.....reality is much less year over year I would think (in mutual funds anyway). Depends how much work you put into it maybe but I put in zero and just put in some aggressive growth MF and forget about it.

@jeffreyulery2182 2 года назад

Cost of insurance on a owned bike vs one you have to cover the value on for the loan is line on the sheet most over look.

@winduncan9818 2 года назад

I totally agree with this video, however I just don't think it applies to the majority of buyers. With over 50% of Americans not having 1k in the bank I think the vast majority are financing because they can't afford a 25k bike. And honestly, those who are invested and can write checks for 25k toys probably aren't the ones needing this video. I think a guy should take the depreciation (10k in your example) + interest + full coverage insurance. Then divide that by number of years and evaluate is that yearly cost worth it to you? I just think a used sub 5k bike with virtually no depreciation and $110 a year liability insurance makes more financial sense to the vast majority of people. Who are probably broke but don't know it. I also think you need to consider you could invest the monthly cash flow you didn't account for in your example. Great video, thanks!

@azr2d1 2 года назад

That's what I did. Bought a 12 year old adv bike that was in outstanding shape for 6K. My insurance is 24 a year ( yes, it really is) and I pay about 50 for tags. Do maintenance myself. I LOVE the bike to death and it will do for many years to come, is cheap and I own it. There are many ways to ride and it doesn't have to cost a lot.

@shavedape 2 года назад

@@azr2d1 tags in QC Canada are $800 CAD for 990 Adv or Harley (each!) vs maybe $50 in other provinces. QC sucks in that way and its insane, and that doesn't even include insurance.

@azr2d1 2 года назад

@@shavedape When new ? or the same today? How much is it for cars? Seems outrageous.

@shavedape 2 года назад

@@azr2d1 Used or new doesn't matter. Sports bike registration is over $2000 CAD. Harley/KTM types or lower risk (cruiser/tourer and an adventure bike) are lower risk so to get plates for a year is 'only' $800. Then insurance on top of that. They're crooks in Quebec and ruining motorcycling, I may have to sell one to afford it or just register/ride one bike one year, the other the next but I can't justify $1600 or $1700/year for the two bikes just to get plates on them. Nevermind insurance or gas or repairs/maintenance/depreciation.

@shavedape 2 года назад

@@azr2d1 Cars aren't bad - it's just bikes they pick on.

@LTVoyager 2 года назад

There is a huge difference between having the cash, but choosing to finance and financing a bike you can’t really afford. I use a credit card for almost all of my purchases each month, but I pay the bill in full each month so I get to use OPM for 30 days or more and no cost. That is a good deal for me. I could pay cash, but I choose to use the CC since it actually is slightly cheaper that way, unless the vendor charges an extra CC fee in which case I pay cash.

@BlazinBlades 2 года назад

Sorry for being a party pooper 😂You have to be very investment savvy and a little lucky to make this work. Assuming you hit another ‘2008’ will you continue to invest your money even if you see it drop 30% in a year? Looking at 2000-2001-2002: 3 consecutive years with a negative return, what then? You are showing a 7% as a minimum guaranteed return and that’s misleading. Just my $.02 Cheers BB 🍻 Great motorcycling content!

@dougdekuiper3194 2 года назад

Or like the past couple of years you earn over 30%.

@BlazinBlades 2 года назад

@@dougdekuiper3194 Yes! Everyone likes a winning bet I’m just not a betting man.

@blessedbethecurse 2 года назад

Investment time horizons should be longer than a year or a couple of years. Return assumptions should be averaged out over a long term. That way the outlier good years and bad years balance out.

@azr2d1 2 года назад

very true. with current markets being high and not having a had a recession in a longer than average time, it's quite likely that investment will be negative over the next 4 years.

@blessedbethecurse 2 года назад

@@azr2d1 If you can accurately time the stock market or the business cycle, you certainly should have much better things to be concerned with than whether a motorcycle loan might pencil 😉

@brentdoogle 2 года назад

Its a valid argument but assumes the buyer has an additional $25k in cash available. While many BMW buyers might, the majority would not. This lesson is for the minority that actually are flush.

@azr2d1 2 года назад

yep, good point. Most riders have $0, finance the bike, get into money problems (loss of job, sickness, etc) and are in big trouble then. If one really wants a bike , get a used one and buy cash. There's LOTS of low miles motorcycles out there. Way more than cars w low miles.

@paulbartsch1223 2 года назад

That extra $25k cancels itself out on either side of the argument so it’s irrelevant.

@azr2d1 2 года назад

@@paulbartsch1223 for comparison, yes. But its also a safety net in case your income isn't sufficient to make the payments.

@thunderfromsea 2 года назад

I appreciate the good financial theory of “taking on debt when the return on equity is higher” (or cost of borrowing is less than an assumed earnings for investments). My primary disagreement in your presenting this to the average consumer has one critical flaw: it should assume that one starts with the ability to pay cash as an option. Most people in the US borrow without having the option of paying all cash, or they borrow for the portion they can’t afford. Hence, they never see that theoretical return on investment since they spent what cash they had and are now further eroding monthly cash flows for the debt payments. Can’t stress enough: this line of thought ONLY applies if one has the ability to pay all cash up front. Perhaps said three times emphatically up front. Now get on the darn bike!

@adamrichards2072 2 года назад

Never thought I'd be getting financial advice on a moto channel, but here we are.

@mikemerrill175 2 года назад

Respectfully, this is not good advice for anyone looking for financial independence. If you can’t afford it and it goes down in value, buy something you can afford.

@jeffbren2151 2 года назад

I’m missing a big part of the logic here. In the finance option your adding in “ payment by monthly cash flow”. But in the cash example, you don’t add in any other funds. So clearly when you add in money to one side you will have an imbalance in money. So in the finance example you had $50k, then ADDED IN another $27k from monthly cash flow to pay for the bike. So you have $77,000 invested in the bike and the investment right? To make this example logical, you need to add “weekly cash flow investments” over the same time period. What does the investment look like then?

@boodog4023 2 года назад

DING DING--we have a winner! You my man caught that too: that's outside money. Also late payment charges, can happen in some cases (there is auto bill tho); another is you must get full insurance coverage; yet another is taxes and commission fees on cashing out parts of the ETF to pay bill with investment (no outside money scenario). All this can be more tedious than some think. Both my bikes I purchased with cash for under 10,000--the lower the price the more cash makes since. Had a very bad experience with late fees and even fraud when using a 0% finance on a rolex. Never again. Probably would however finance something that big at a low rate, but then I don't buy expensive new things new too often.

@blessedbethecurse 2 года назад

Most people have a job and monthly income. It's significantly easier for most people to pay $564 a month over 4 years than come up with $25,000 all at once. So yes, he used another source, but he subtracted out the full $27K when he made the comparison. The thing he didn't do was factor in the extra interest that could be gained on the $564 a month in cash flow with the "pay in cash" scenario, which he admits. That moves the cash scenario closer to the financing scenario. On the other hand, he also didn't factor in inflation, which helps the financing scenario, because that $564 per month is going to be paid with slightly cheaper dollars over time. It's not going to be a big impact over 4 years and with such small amounts, but it's not nothing. Inflation would be more of a factor for a larger loan amount over a longer period, such as a 30-year home mortgage.

@jeffbren2151 2 года назад

@@blessedbethecurse yup, you make sense. I let my wife do the finance work in my house. But, I'm the one making the money (and also the one buying "toys" for myself and my son). So I try to look at every aspect. And try to avoid the "dealer spin" when looking at vehicle financing.

@boodog4023 2 года назад

@@blessedbethecurse You're inflation point is very warranted--especially today. But the assertion of "most people have a ... monthly income" does not disguise the fact that that is outside money, which is not taken into account here.

@blessedbethecurse 2 года назад

@@boodog4023 The "outside money" portion isn't relevant; he subtracts out the cost of the payments. So it's more or less accounted for on the financing side. He just doesn't account for the extra earnings on the monthly cash flow on the cash-up-front side. That's where it's missing.

@dalehunt1383 2 года назад

I did the Easy Ride with balloon even though I had cash to buy my 2021 40 yr anniversary edition 1250GSA. Kept me awake having the debt so paid it off after 2 months. That's how I was raised.

@darthtyrannosaurus946 2 года назад

I love that you combined Motorcycle and Investing. Its so important for all to learn investing.

@free2chasehappy 2 года назад

It's all about being smart with money and put it where it grows the most. I personally believe that there is no good debt because I've been in one... but if someone who is financially smart and responsible, go right ahead and let money work for you.

@cmcjvcltcbmc 2 года назад

I'm guessing your wife was the primary intended audience for this video :-) "Look honey, we'd be stupid if I didnt buy this GSA!"

@SWTrailsAndWheels 2 года назад

Darn it. I went from financing new bikes to only buying used in recent years. Now you have me seriously contemplating financing a new Tenere 700. Thanks a lot :/

@Krydolph 2 года назад

If you have the money to finance a bike, but you already have one... Then don't. find out how much you would have to pay monthly if you financed, then put those money into saving, or investment as bigrock suggest. in a few years you can just buy it, and you can keep pretending like you are financing, and after that you wont have to chose if you should buy only used bikes, or finance new bikes. But just think about what bike you want next!

@Gnux91 2 года назад

@@Krydolph this is the stupidest shit I’ve ever heard

@Krydolph 2 года назад

@@Gnux91 Maybe try listen to yourself sometimes then! My comment will fall down the list fast then!

@beejoutbush3322 2 года назад

My EXACT thoughts. 😂

@rocketrollsvlogs7625 2 года назад

Great job at explaining this approach.

@markg7834 2 года назад

Excellent video. Looking forward to the vid on the BMW Easy Ride program.

@BigRockMoto 2 года назад

You all have brought to light important issues that I did try to annotate in the video, but maybe people are not watching the whole thing. Yes, I missed adding in the cash flow under the paying cash scenario. That ends up making the end result a lot closer. Also, yes, investments are risky, I just used the 7% return the market has produced over the LONG RUN. I also forgot to mention capital gains taxes. I am not a CFP. I just wanted to offer an alternative point of view to the commonly held viewpoint that CASH IS KING and FINANCING IS BAD. I appreciate the comments, you all help make this channel a community. We can disagree, that's OK.

@dubbartolec549 2 года назад

It is all good. We got an idea and we appreciate effort you put into these videos. It is great source of technical, practical and other interesting info about bikes for all of us. We'd like you to know that. We appreciate it greatly. Some of us don't have skills to express it through videos and we admire people like you who can do it. I know that it takes hours and hours of planning to make these videos. Sometimes we disagree about some opinions but that is quite normal. Rule of thumb is that people are likely to watch hours and hours of videos and enjoy them (but not comment on them) and then when they disagree with something they comment, so one can get wrong impression. Keep up great work and continue building community.

@dalehunt1383 2 года назад

Makes you think which is becoming a lost art!

@danielmelish3978 2 года назад

This is very, very important. Thanks!

@Desertfox92308 2 года назад

Good video Ian, I have financed several new bikes over the years. Starting out with lower cost Japanese bikes up to expensive BMW's. My income determined the bike I could afford in my twenties to much more in my 40's and 50's. I paid them all off and built my credit in the process! I was just as excited about owning my Honda CB360 in '79 as I was my R1200RT in 2013!

@BigRockMoto 2 года назад

Good stuff!

@mr.solitude3352 2 года назад

Another great video. Thank you. There is one benefit to complete and debt free ownership that wasn't touched upon and which I personally experienced on more than one occasion: should I need to liquidate an asset because of an emergency situation, I am able to do that because I have the bike's title. In the case of financing, the title remains in the loan officer's hands until it's paid off. I've never acquired emergency funds via a loan 'cause I was always able to liquidate a free and clear asset. It's much easier, generally, to unload your bike for any reason if you owned it outright. Happy trails, Kemosabe!

@garydiane1577 2 года назад

The other benefit is you’re not forced to buy full coverage insurance if you own it outright. If you’re only riding a couple thousand miles a year, like many riders, full coverage is pretty expensive per mile.

@michiganmoto7687 2 года назад

He did cover that on the pro/con list. As for the insurance, motorcycle insurance is pretty cheap and why wouldn’t you want full coverage on a new motorcycle? You could ride only once this year and have someone pull out in front of you or have it stolen or hit some road debris on a curve and high side into a guard rail. I would want to be covered. Plus my full coverage also covers my riding gear. Have to protect those investments.

@ChooseBrian 2 года назад

Great vid. I agree with most of it.. I purchased my Tenere in April and financed half with a killer deal of 2.9 financed through. Yamaha. Just paid the bike off in August. It feels good to own it at this point. Now I MUST go fianance a GSA on easy ride. Thanx for the content Ian.

@brianmorse8811 2 года назад

A GSA is a great value because it holds its value on the resale or trade in. I was glad to trade in my old one for the new one. I feel like all the fun I had with the old one was at a greater value then a regular vacation using a plane to get to my vacation destinations.

@azr2d1 2 года назад

It still takes a big hit when new, just like a car.

@AFard-hn3fo 2 года назад

Thanks for the video(s). Definitely a fan! Just Don’t forget the taxes you’ll have to pay on the 7% capital gain…at the end, assuming a steady 7% growth rate you’ll probably net around 3-5% which is typically either lower or even.

@klauspeters7434 2 года назад

in most cases it doesn‘t make any sense because of huge price reductions by paying cash - at least in Germany …

@BlazingTyphlosion 2 года назад

Since I was a kid I always dreamed of riding my own bike one day. I'm so close to it. Currently I'm studying in university and I will finish soon. When I go to work I will get my motorcycle license and buy my first motorcycle. I can't wait haha. I really enjoy your videos and just walked by your channel. Greetings from Germany.

@diogomorais9938 2 года назад

This is great man maths I can now use to explain to the wife why it’s a good idea to buy the GS1250

@GreenEagle1983 2 года назад

Great video as I have been moving towards this route. I tend to be the cash in hand/no doubt but this totally makes sense and seems to not make such a big hit to the wallet right away. Thanks for the reassurance on this thought and method

@BigRockMoto 2 года назад

Glad it was helpful!

@trikyle005 2 года назад

Awesome!!!.. im financing and getting a GSA tomorrow, 😆 Thanks bro

@legalboy71 2 года назад

Great video. A lot of people don't think about opportunity cost so it's good to bring that up. Your did ignore in your example the assumption that just because you can afford to make monthly payments now, you will be able to do so over the life of the loan. That's hard to label as a straight pro or con for financing vs cash because if you finance you might have more in liquid savings to cover job loss but if you paid cash you might have replenished your funds with the money your aren't using for monthly payments. But depending on your level of certainty in the future it's worth thinking about with your risk tolerance. Peace of mind may be worth losing out on the chance to make a little more. But financing isn't intrinsically bad.

@MotoPavilion 2 года назад

7% is way to high. In every big institution when you invest in 10 years plan, the real number is 4%-5%

@jimalbuquerque1764 2 года назад

What’s missing is cost of ownership in the equation specifically maintenance, insurance, accessories perhaps. If at the end of the day you made enough earnings on your investment to cover the bike and c of o over the 4 years that would be a great outcome but market forces are unpredictable as we know. I think if your investment pays for at least some of your toy you came out ahead by financing.

@mikehawk4665 2 года назад

Interesting video im 24 and only saved and got my toys so far no credit yet but thanks for the different perspective learned alot

@BigRockMoto 2 года назад

Glad you enjoyed it!

@gray5857 2 года назад

Your a smart guy Ian I appreciate your insight

@ianferrier235 2 года назад

Thanks Ian

@georgetumino9652 2 года назад

I've bought a new bike using the money from an investment redraw account allowing someone else to pay for the bike. Something to consider if you have such a thing. Don't know how this works in the US. Interest rates on investment mortgages are currently low in Australia.

@jeffromoto874 2 года назад

Here’s the rub. I once bought a new car with $25k cash (that I worked hard for) and basically used up all my cash reserves, then realized I only saved about $800 interest. Not long after had dental bills for $4k. Lesson learned…never again.

@chrisallen5548 2 года назад

Great video, thanks. I am looking at finance options now, in the UK low risk investment pays far less than the interest rates charged on loans but it'll be worth shopping around for other finance and investment options to see if I can make it more worthwhile.

@mikemerrill175 2 года назад

Love the presentation, but a bike, boat, Atv, airplane etc is not an investment. This is how many end upside down.

@lowriderrjw 2 года назад

Solid video! Always other angles and perspectives to consider. At the rate you rotate motorcycles, that GS is going to be gone well before the 4 years is up! (just kidding 🤣)

@BigRockMoto 2 года назад

Great point!

@brettknighten1171 2 года назад

Investment is separate from the motorcycle. You still paid more for the financed bike.

@ISPhotographic 2 года назад

Option C: Finance at a low interest rate and just hang on to the cash, just in case. In case a great land purchase makes itself available. In case a new startup opportunity arises that requires capital. In case of a job loss and the cash is needed for a month for simple living expenses.

@jlchausse909 2 года назад

I do understand the logic behind it, all though myself and a lot of people like me just don’t like having debt and like the freedom of knowing that if we end up on EI we can still make our mortgage payment since we don’t have all theses other payments to make.

@mrsilbo6499 2 года назад

It's a simple concept that the delta between the finance interest rate (true APR, not the flat rate) & a better rate of interest when investing is attractive, especially as you retain the asset, eventually, either way. But the stock market is volatile, good investment advice costs money and any profits are taxable at your nominal tax rate. In the UK that could easily be as high as 40% tax, if you are a high earner. The value of being in control of your finances is enormous & the likelihood of making 7% plus, year on year, for 4 years, is slim. Thus, if you have the cash, pay it. If you don't, finance it and accept the interest charges, but at least you won't lose your shirt & your credit rating will improve.

@Carlisho Год назад

In my case, which is what I believe in, it makes sense to finance a new bike if its your daily commuter, and if you need a car for any reason then the car can be the old cheap vehicle that you buy cash. Financing a car is twice (or even more) as expensive as a brand new 1250 GS, and commuting in a bike is way better than in a car, if you can do it of course.

@f360dude 2 года назад

Your equation is missing a component. and when you add the 48 installments of $ 564.xx your numbers will not be validated. If the payment is made via surplus CF, then I will argue the same CF could be re-invested increasing the return on the Assets side greater than the liability side. NOW, all these foreplay is as solid as Jello, since no Index investment has a guaranteed return at all.

@christopherdoran3608 2 года назад

I think I it’s important to factor in your tax liability on the investment so you clearly show your net gain. Also banks often have lower rates than dealers. The law says they can legally hold 2 points of interest to pad the back end profit.

@GraemeRobinson 10 месяцев назад

Very interesting video thanks for posting your thoughts. I have never financed a bike - just bought my KTM 390 ADV out of cash. I have purchased a car with finance - but that was a business decision and expense. I take your point about finance for a 'toy' (non-business purchase) being viable if you can earn more by investing than it costs you in interest to pay out the bike. I will consider it when I next buy a bike/car.

@hardworkingamerican8847 2 года назад

I got shafted for 16.99 for my Tenere . I got a credit penalty somehow for paying off my loan on a boxtruck early . There where a couple late credit card payments also but they took off the late charge because I pay a big part down each month . With my business it's very hard to keep up with bookkeeping ect , way too many grueling hours and at the end of most days there is not many brain cells left for more work . I could have paid cash for my Tenere 700 but I needed the cash more for my business and I paid it off in 11 months instead of 36 with no penalties .

@mototaco2132 2 года назад

Ian... Great subject among motorcyclists... For me, since motorcycling is a hobby, I would lead towards cash, less things to tend to.

@BigRockMoto 2 года назад

Fair enough!

@saroke1249 2 года назад

With interest rates so low at the moment I have financed my recently paid off jeep wrangler and the GSA I just ordered. With my credit union I was able to get under 3% which is only a couple thousand over the cost of the bike. I also add an addition $100 or so most months to the principal to reduce that even more. Putting money into a Roth IRA is pulling in over 3% at the moment so the math works out better for me at this time. Only cash funding available would be a 401K loan which is still making more interest than what I would be paying in financing. The option then is either wait to save up the cash or pay the low interest rate. I preferred not waiting and chose the latter option.

@tsav6952 2 года назад

Also after the 4 yr period that index fund asset keeps growing for years to come providing no long periods of market declines but 7% is a conservative figure even though long term averages have been closer to 10%. I would advice putting 20% down so you are not immediately upside-down. Lol at Dave Ramsey remark. Sorry Dave cash ain't king.

@Krydolph 2 года назад

from his example he still had 25k put into index fund when he payed cash. IF he had done that, and then payed all the money he just got from thin air in the other example into the investment, he would have 60K not figuring in all the extra interest he would have gotten... and then after 4 he would have 60k instead of 38k to keep making him money. But yeah... Debt is clearly a great thing! And the stock market is always at least 7% guaranteed....

@clemoniii 2 года назад

The only time debt is good is when you can generate significantly more income with your cash than the cost of that money (debt interest)

@jayknight850 2 года назад

Excellent “recap” of the obvious. So many people squirm when they think of this topic, good to get it as an open discussion.

@SticksAandstonesBozo 2 года назад

Fantastic video and very true. It’s such a shame we don’t teach our kids about finances literally at all in school. Fyi no other first world country doesn’t.

@jbandt 2 года назад

Spent the whole time watching this thinking of Dave Ramesy. Risk was definitely not factored into the evaluation here.

@ropehnd 2 года назад

I’m looking forward to hearing your review about BMW balloon note. I’m assuming it’s structured to incentivize buying a new bike when the balloon is due.

@BigRockMoto 2 года назад

correct

@handleby 2 года назад

3easy ride sounds good but when you go to the dealer they say its not for persons but only for companies and as an individual they make you an offer with a higher interes rate... at least this is the case where I am

@J.Assens 2 года назад

Complicated explanation that could be simplified to: If you have too much money and can invest to a better interest than you have to pay for a finance Agree meter, you should finance else buy cash, of course if you have that kind of money.

@jeanjacques9980 2 года назад

If you purchase bike using cash, standard 10% discount off RRP, no discount no sale, choose the purchase time to when dealers need to move metal, full RRP generally for finance deal. Sales person receives a bonus for the sale and a second bonus for finance deal. Are you not required to pay income tax on interest from index linked fund/unearned income? Any finance company charges for managing the fund? Mortgage comparison is not relevant, you have to live somewhere, a bike is a discretionary purchase for most people.

@michiganmoto7687 2 года назад

What you didn’t consider is if you paid cash for the bike and still saved the $500 monthly payment amount every month for four years you would (assuming you didn’t invest the payments and just put them into savings but had the other $25k vested into money markets) you would gain an additional $24k in your savings putting your total at $56,796 + the $15k asset. Pay yourself instead of the bank. Not to mention you have to pay taxes on that money market interest earnings annually (or quarterly depending on your personal situation). Higher investment brings higher returns but also higher tax bracket and the fed wants their piece of your pie.

@brantmcfarland517 2 года назад

I lost a family member in 1993 and got 250000$ and did just like that and every thang I own land truck home bikes all payed for and retired at 53 and still have all of that money. Now 911 hurt me but it come out ok when all sed and done. Thanks for all your videos.

@Jagshemasher Год назад

Financing makes sense provided the purchase price for cash and financing is the same and the interest rate on the loan is lower than the "after tax return" you make on the money you invested - at least where I live (Canada) interest on investments are taxed at your highest marginal tax rate (~45% in Canada). Different types of investment returns are taxed at different rates. Capital gains are taxed at a lower rate and dividends from Canadian corporations are taxed favourably. Interest bearing investments are taxed the most heavily - GIC's and Treasury Bills. The other consideration as you note is its good to keep a decent rainy day fund in case of emergency.

@mr.nmoney3554 2 года назад

100% agree we have record low interest rates right now. Its about cash flow. My rule is to borrow/finance what you can if you can get an interest rate 4% or lower and pay that loan off within 7 years. why 7 because there is usually a market dip every 8~10 years. 2nd even though i am financing i make sure there is always enough money in the bank to pay off the loan at any given moment. Right now i bought a car financed for 20grand i have 25 grand in the bank. anything i am making over i am investing

@brucebrown6597 2 года назад

I have one more advantage to finance my motorcycle. I am an instructor and WA State requires us to have and maintain a motorcycle, which then makes it become tax deductible. Win…win!

@pallotey810 2 года назад

What about the risk of investing on the stock market? Or is there any zero risk investment? Let me know, please. I want to buy a GSA.

@thatguy6207 2 года назад

Did you buy new?

@cat1racer 2 года назад

I can see it both ways and agree or disagree with your premise for various reasons. Someone mentioned stock market volatility below, and that is a serious factor in your model as the market is about 33% over valued and could reset any day. I also like the idea of no comp insurance needed when you pay cash, a total waste of money imo, and also keeps credit clean. I personally don't ever condone borrowing money except for your 1st home or to make money, not gambling, but like a business that generates income. It's been the secret of my success. I also raised my daughters always reminding them, "if you don't have the money for something, that means you can't afford it". I think people today have that mentality that you mention, "it feels cheaper to finance" or another long time friend says "your always going to have a house or car payment", no but he still does. Anywho, sorry for the novel, I like your videos.

@inozbik 2 года назад

I'm switching my mind towards what you're saying here. I always thought that debt is bad, but I started using it as leverage you mentioned here. I have a rule to not have more debt than I have in cash or other assents to simply pay it off when needed.

@johnmacdonald1878 8 месяцев назад

Damn you must be very good at investing. Mine make no where near that the banks take most in fees. My stockbroker fired me because I wasn’t selling and bying enough for him to make commission.

@daveo9844 2 года назад

Just remember folks. The benefits of motorcycle ownership are many 😎. Time is short, so get one any way you can 😀🏍💨

@antoniorios3856 2 года назад

Im financing a KLR so not too worried, im just a poor college student and a bike that can go offroad and commute for $200 a month is a good deal.

@rayfriedman9625 2 года назад

Interesting and helpful, but wonder how the numbers work if one doesn't begin with $50k in the bank? Say the person has considerably less or even ZERO to begin with. Note: just checked--I'm in the considerably less category!

@danielzhitomirsky9857 Год назад

Hi! Great video, but there are 2 problems with the math: 1) you forgot to subtract capital gains tax from your stock investment 2) it is applicable stock market performs well

@Kenkalsi 2 года назад

In Hong Kong GS is more than 40K usd, dont know why? BMW should discount in HK.

@mkoehler222 2 года назад

Spend your money now while you can enjoy it whichever way you choose. The government will take it when you go in the nursing home.

@dubbartolec549 2 года назад

This is great idea for video but it doesn't work in practice. If one already has $50k and they are thinking of buying $25k bike they have already done something right (assuming that is all after tax was paid) to get into that financial position, so why risk it further and buy money for questionable gain in the end? If $25k is all they have, finance is their only option if they need/want $25k bike (bit questionable in my view). Better option would be used $10k bike. I am also questioning "conservative 7%" return. Who can guarantee something like that ?

@justride9217 2 года назад

Yap - I always finance about half the cost of my Motorcycles. interest rates have been very low over the last 10 years. It makes good dollars and cents.... Always remember - it costs to be cool.

@richardvalitalo3670 2 года назад

What is cash? Seems to evaporate near me😕 I say live your dreams no matter what the cost, better than regrets! Get out & ride.

@MotoBeemer 2 года назад

I'm not sure why people care so much about what other people do with their money. Pay cash for a bike, cool. Steal it off the lot? Not my problem. Finance it for 50 years and 30% APR, why do I give a shit. Not so much here but the arguments in the comments about this particular topic get hilarious.

@piotrwydmuch9413 2 года назад

Hi Ian. That was really eye opening. Thank you. Would you mind telling me what tires you're running on your GSA currently? Are these Michelin Anakee Adventure? And if so, why do you use them. I'm really interested in your opinion

@BigRockMoto 2 года назад

I just put them on, love them so far

@TheSocialliberal 2 года назад

I'm actually considering financing a used motorcycle with a considerable down payment worth roughly half of what the bike is worth. Looking at used Africa Twins at private sale for around $11,000, with the idea being $5,000 down $6,000 financed/ loaned over 2-3 years. Based upon my current credit, the intrest would amount to $500-600 dollars over the lifetime of the loan if I paid the minimum monthly $180 payment. In my case, I have the money to buy the bike outright. However, The idea is to make my money work for me a bit to imporve my credit score, and to keep my current amount of saving high enough for any real emergencies.

@leftymike8730 2 года назад

I couldn’t agree more with this video. I did go with the EZ Ride for my GS so I am curious to hear your opinions on that. For me it made sense but it might not for everyone.

@BornAGoon 2 года назад

You must be a financial advisor or something lol I agree money is so cheap to borrow why give up 20k of your cash when you can borrrow at 2% and get 10% to 20% in this bull market. When I bought my Triumph tiger I had no payments for 3 months and 2.5% was logical to go the finance route. Good video

@CarlosThomas 2 года назад

He is spot on. This is what rich people do. If you want to be rich, do what rich people do. If you want to be poor, do what poor people do.

@clemoniii 2 года назад

Capital Gains tax. Is a worsening reality of investments. Yes, depends on when you sell the investments, but this is a short term discussion. Still, your advice is sound assuming stock market continues a significantly upward trend. Thank you for bringing it to this community!

@NitrogenNO2 2 года назад

This is me explaining to my parents why I should get a 🏍️

@Justbehereandnow 2 года назад

Or loan the money from your bank and get potentially lower interest rate and instance title of your bike

@steveaustin1820 2 года назад

No brainer...I am constantly earning more than 2 times a month of what my payments are on my 2021 GSA....that's why I financed...depreciation isn't figured in though.

@nurtassolarstone8315 2 года назад

Wouldn’t work in Kazakhstan. Interest finance rate of the banks here is something between 14-18% 🤣 Only cash for toys

@MorningCoffeeDaily 2 года назад

I'm a freelance photographer, I don't have even 100 euros a month XD savings for an emergency are the big deal. I just day dream this bike for years. At the end of the day, I just had a GSA in dreams, no costs, still bankrupt looll :D

@clark5000 2 года назад

So, if I pay 27% interest to the dealer, is that bad? I don't have the money to pay cash, so I'm just gonna finance. I was gonna get a used KLR, but after your explanation, I've decided to get a new KTM 1250. They also said "no payments for 3 months" so maybe I can pick up a few side jobs. I currently make 14.75 and hour, but my mom only charges me $400 a month for rent. Aside from the 17K I have in credit card debit, I really dont have any other payments. (Although I'm waiting to go In front of a judge to finalize our divorce.- I might get slapped with child support, but I'll cross that bridge when i get there..) but I'll probably be able to pay the child support with the money I make from investing.....you said Bitcoin, right?

@kevshaw2020 2 года назад

Great video ! i think you should change the name of this video though to "how to convince your wife that buying a motorcycle is financially sound" lol also really enjoying the new content ! been watching since the first africa twin review !

@scorpioxmoto3627 2 года назад

I get the idea, its nice to play around, but theres a lot of ifs in this equation. Most importantly, in my area (central europe) tax on capital gains after 5 years is 20%, after 10y 15% etc. Yearly fee in mutual funds is also anywhere from 1 to 5% etc. and most importantly, your capital investment NEEDS to make money. and that can be stressful to have in the back of my mind all the time. Maybe some crypto funds, but thats another topic in itself. Id rather cash a Honda CRF 300 rally for 6k euros than have a financed BMW for 25k. Thats Just my experience tho, but I dont have a moto RU-vid business going on, obligations to sponsors etc. so I guess it all depends if a moto Is a neccessary tool for the person or not.

@steveh545 2 года назад

lol, you'll get a lot of comments on this one. I think other's have addressed some of the pitfalls of this scenario. For many Americans, whether buying a car or a bike, they likely wouldn't actually invest the money that they would have used for a cash purpose. I'd think a GS buyer would be more likely to have a little extra cash on hand. If stereotypes hold true. Now, if a GS buyer would pass on Starbucks, that would be another $4/day they could invest, and now we're talking real money.

@sethmoniz915 2 года назад

What if you bought a Klr for 1000 bucks and invested the rest and used the dividends to travel the world

@ronburhans5788 2 года назад

Paying cash might be better for some people if they don't invest.

@jblue1299 2 года назад

I don’t make money decisions because “all the financial experts in the world,” do something one way or the other! In fact, whatever the majority are doing in life, I tend to go the opposite direction! Thanks for the video; I am very much an independent thinker!

@azr2d1 2 года назад

You NEED a place to live (rent or own). You don't NEED a motorcycle that costs 25K. That's the big difference. WANT vs NEED. I don't finance, I buy used. This way someone else takes the initial hit (you) AND depreciation is slower while I own it. And I pay cash for it. If I don't have the cash I don't buy it.

@BigRockMoto 2 года назад

I hear you 100%