Correct way to go?.....financing vs purchasing....

I have too much time to think. Makes for a fun day.

My latest "thought" today.

Save up $30,000 and go buy a Tractor/trailer and have possession free and clear of any payment or loan.

I also have a $4000 credit card. It's limit is increased every 6 months if I want it to. I just have to ask.

Maintain the tractor/trailer free and clear. However, secure a $25,000 revolving Line of credit. And if needed, use the tractor/trailer as the "collateral" if the bank needs it. Helps cover operating expense if absolutely needed.

Use the credit card for the day to day operations and pay off the balance at the end of each month before billing starts and with the settlements that come in from the loads hauled.

Have $2500-5000 in savings/cash on hand. "daily emergency" type fund. IE blow a tire.


The thinking is:

You have no vehicle payment. You are actually putting that money into YOUR savings account instead of paying it to a bank and being charged interest. That I have amortization schedules showing it's about $1100 per month.

You aren't really paying anything to "have" the line of credit unless you actually use it.

As it is, I am already planning to put $2000 per month into a maintenance escrow account.

Authority Escrow is also already being put away to cover those expenses.

Since the credit card is paid off completely each month with the accounts receivables, you aren't paying interest there either.

Whatever you "net" at the end of the month goes into the checkbook and is left there to continue to cover the monthly expense that are accrued on the credit card.

Basically building up the "cash reserves" until it is 2X the credit limit on the credit card.

Monthly bills are actually paid on the credit card to accumulate "points" so that at the end of the year, the wife and I can take a free trip to "where ever" on the card companies' dime.

 

Agreed. It's way too small. I have gone from people saying I have no credit to "pay $39 annual fee for a $500 limit" to a $4000 card in 2 years. With the bank telling me I can up the limit every 6 months, it's always a good option.

It's a "business" tool that has to be managed properly for the right reasons. The collection company settled for 55% of the total medical bill so I am focusing on clearing that off the credit card now. Netted me a savings of over $1500 that I can put to other debt now.

 

yop. I remembered.

It's more the clearing of the credit report I am focusing on at the moment.

Did I mention divorces and ex-spouses with no financial intelligence SUCK. And she went to college for a 4 year accounting degree.

 

when I was with my ex, I had a score of 560-570. It sucked.

Since then I have worked it up to a 680. This took a lot off my record.

The thing killing me now is the foreclosure on the record from 2008 during the divorce. I have had one bank tell me no to a truck finance because of that alone. They see it the same as a truck repo.

In my mind, I just took the checkbook and tossed all past records. I said as of today, I am debt free and started life over. Don't get me wrong. I "knew" the past debts were there. I just quit caring about them and focused on my personal health. The divorce was mean enough on me, I didn't need the debt too.


But yes, cash is quickly becoming king.