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Discussion in 'Lawn Mowing' started by grassyfras, Jun 20, 2004.

  1. grassyfras

    grassyfras LawnSite Bronze Member
    Messages: 1,475

    Im buying a new mower and thinking of financing it. I punched some numbers and for 220 a month for 2 years I can get about a $5000 loan. The finance charge would be for around $400. This is all at about a 7% intersest rate. Im thinking of foing this route so I can take my 5k and put it into the stock market and hope for a gain better then 7%. Does this sound like a decent plan or should I just pay cash. Remember Im 18 I live at home and im going to community college which is payed for by my parents. So its not like 200 bucks would kill me per month or if i payed cash I wouldnt be deprinving myself of anything I would need or really want besides expanding my portfolio. In my situation what would you do. O yea my dad would have to co-sign the loan or take the whole thing out in his name, not sure yet. I have no credit.
  2. Mark McC

    Mark McC LawnSite Bronze Member
    Messages: 1,565

    You should probably consult a financial analyst. On the other hand, if you have no debt, you could use your chunk of cash as collateral for the loan and that would establish your credit pretty nicely.
  3. kipper

    kipper LawnSite Member
    Messages: 191

    Mark McC has a good point to secure the loa and build credit. I just have one sayig for you though " The borrower is slave to the lender ".
  4. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    If he has to take the whole loan out in his name, it'll do nothing for your credit, just his.

    If you're able to, get the loan in your name, build yourself some credit, but do not put the money in the stock market.

    Put it in a CD, or a jar on the shelf, just so if you get in a bind for some reason you've got the money to pay off the loan.

    If you put the money in the stock market and lose 1/2, then next summer you break your leg, or you decide that you don't want to mow grass anymore, but are unable to sell your mower right away, you may be working your next job or wondering how you're going to pay for this mower, in the meantime your credit that you didn't have before is now worse than it started.
  5. Itsgottobegreen

    Itsgottobegreen LawnSite Silver Member
    Messages: 2,177

    I always like using a back hoe and burying it. But CDs are the safest way to go.
  6. grassyfras

    grassyfras LawnSite Bronze Member
    Messages: 1,475

    I have some cash stashed away just in case that I never touch. About a thousand maybe more. I also already have a nice portfolio so even if I get out of this business I still have other investments to keep me a float or pay off the loan. The money as a collateral is a good idea as well.
  7. shorty7616

    shorty7616 LawnSite Member
    Messages: 230

    If your dad cosigns, you will be able to build credit, which you will need one day....better now than later.

    In my opinion, I would buy maybe 1/2 up front, and then maybe finance the other half. To put 5000 in the stock market today, or even a mutual fund you are going to need to earn upwards of 12-15% within the next 2 years to make it worth while. You will have to factor in taxes and inflation.

    In my honest opinion, I think you would be better off paying the 7% interest, or paying for part, or all up front.

    BTW....studying for a finance degree.....if you have anymore
    ????, feel free to ask.
  8. grassyfras

    grassyfras LawnSite Bronze Member
    Messages: 1,475

    For only a few hundred dollars in finance charges I dont see how its a bad business move. Also, I'm surprised to hear so many of you rave about CD's. Those are barly earn above inflation so its like having money just sitting around. I have made much more in the stock market.
  9. GeeVee

    GeeVee LawnSite Senior Member
    Messages: 421

    Co signing doesn't help Junior with credit.

    Buy the mower.
  10. 2tall

    2tall LawnSite Member
    Messages: 93

    How about financing the mower thru the manufacturer. I know Ferris right now has 0% for 36 months. Not sure what other manufactures have going right now.

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