Congrats on your successes. As a wise old man, I would urge you to not make financial decisions based on the expectation of continued 20% returns. I've been through the times like recent years where you can make no bad picks. And I've tried to catch falling knives that just cannot possibly fall any lower. Until they do. Some companies that stumble stumble all the way to $0, so a strategy of picking companies that stumble is a dangerous one. Good luck.

The point was that your debt capacity is not a function of your cash balance, and it's a function of your ability to service the debt.

Certainly. And the OP gave plenty of information to indicate that he is in a precarious financial situation.
" it bleed the bank account pretty dry so I had to sell my Shiv to allow for more cash flow because as a coach it is hard enough to make a living never mind come up with an extra $5000."

He is married and has a kid and barely makes enough to live on, and his savings were drained by an unexpected expense.

Unvarnished opinions to follow:

This thread is insane. No one needs a $5K bike, this is a pure question of want. This is especially true for someone who can't afford a $5K bike and has other, serious responsibilities. I frankly am surprised this was even posed as a question.

/you posted this question, there's my opinion.

I do agree with this 100%. Our shop uses Synchrony which also provides financing of bikes for 12 months 0% interest. The issue is historically that 90% (according to Dave Ramsey) do not pay it off in the allotted time. When you don't they back charge and slam you with insane rates of interest. I believe this is a hobby and you should not go into crazy amounts of debt in order to do it. Like Aust said, especially on something that you will not gain on when it's time to sell the bike. I had 2 clients come in yesterday and financed $50 of nutrition and a $180 saddle. If you have to finance those things, you really should be rethinking your priorities.

With that said, I don't know your financials and I'm not sure your exact situation other than what you've written above. However, a year is a long time away and there's so much stuff that can happen between now and then. That's what these banks hope for so they can make money off you. They wouldn't have open doors if they gave everyone 0% and didn't make a dime. Car problems? Health problems? All kinds of shit can happen. My transmission went out 2 weeks ago, $2,700 later. That'd buy the majority of tri bikes out there but that unexpected chunk of change for my transmission could screw up a payment plan, if I had limited funds.

Not trying to preach, but listen to the Total Money Makeover by Dave. It'll change your way of thinking of supporting the banks by going into debt.

/rant

If you're so low on cash that you had to sell your other bike to make ends meet then I don't think it makes sense to go into debt for a new bike and race places that require plane rides and hotels. If I were in your shoes I'd race locally and start saving for another bike.

Lets say you have no debt, 401k has a million dollars in it, you make more than $100k a year, kid's college savings is fully funded ----- then I say buy that bike!

OR ---- you're a pro and you're racing Kona next year and have won a few regional ironmans.

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Want: 58cm Cervelo Soloist. PM me if you have one to sell

Vintage Cervelo: A Resource

I stick to the banking sector. I know this industry inside and out. Banks that stumble rarely go to $0. The FDIC finds a suitor and that bank absorbs the defunct one. Smaller community banks can fold, so I prefer more regional sized banks.

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The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

Thanks for clarifying. I figured that's what you meant.

I would separate businesses from consumers. A consumer borrows money to buy things. A business borrows money to make things. I think the driving force behind consumer debt is the 'keeping up with the Jones' mentality. It's a very very slippery slope.

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The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

"killer" ride here, in this dude's neighborhood. Ready to race $2500. Start with the story and offer $2K

At every race, "FOR SALE" take numbers and pass it on when the last race is done. What's not to like?

<http://www.kijiji.ca/...hNavigationFlag=true

Or another hardly used...

<http://www.kijiji.ca/...hNavigationFlag=true


I've seen nearly new P2's for like $1500 with stock wheels mind you.

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Training Tweets: https://twitter.com/Jagersport_com
FM Sports: http://fluidmotionsports.com

I think the driving force behind consumer debt is the 'keeping up with the Jones' mentality.

You don't think it is easy credit and predatory lending, along with 24/7 mind-control advertising that turns hapless humans into consumption addicts?

Just thinking of all the people I know that have been in debt up to and above their eyeballs all their lives. They aren't keeping up with the Jones in any fashion, because quickly the excess debt results in a *lowering* of living standard. They simply can't stop.

While the Jones' might be a factor, I think overall it's being tempted with nice kit/lifestyle marketing. Hey it feels good to be swathed in leather, electronic trinkets, hardwood floors and smart appliances. Trips to abroad etc.

The good thing, at least for me about sport/training and certainly cycling is that I am viewing most of that as sideshow fluff. Because I am trying to commute by bike, the car is only a utilitarian necessary evil.

And with time on the road, track or lake/pool you are focused on fitness - not dreaming of trips or vacation.

Since the sport is very portable, I seem to be earning and saving more as well.

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Training Tweets: https://twitter.com/Jagersport_com
FM Sports: http://fluidmotionsports.com

Sometimes wonder if I should try to keep up with the Jones' a little more. My '86 Toyota truck for instance:

Unfixed deer collision damage (mangled fender and bumper, headlight held in place with wire). Big crack in the windshield. Paint totally faded from sitting out in the sun at 7k ft. Rusted wheels I got at a junk yard (wanted 15in not the 14in it came with). Never gets cleaned inside or out.

On the other hand, maybe I bought into the line that the stuff I own should be an expression of who I really am? That truck is all me... for sure.

Not really. I bought a treadmill using PayPal credit. Zero interest for 24 months. I could have easily paid cash, but why if I got zero interest.

Still comes down to personal accountability and responsibility. Easy credit just allows them to act on that impulse. I see all the marketing and advertising, yet I know my limits. I leave the bike shop with my head down pouting all the time. There is no mind control. These are company's trying to present their goods and services in the best possible manner. It's up to the consumer to decide if there is value.

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The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

During the height of my corporate banking days I had a Porsche, Summer Jeep Wrangler and a new car every two years. I finally looked at these stupid ass toys and got ride of them all. I now have a 2010 Subaru Outback with 115m miles on it and I still love it. I have a small condo that I paid cash for thanks to housing bubble (new condo foreclosed on so I raped the bank with my offer lol). There are still stupid things i spend my money on but they are a much much smaller fraction of my income. Example, I love workout clothes (Granted I use them 5+ time a week). I love shoes (sound like a girl, I know). I love cycling stuff and running stuff.

My friends may pull up in BMW's (chick cars) or Land Rovers. They have big houses. It just doesn't phase me anymore. I have zero interest bearing debt. I have a massive retirement account. I quite working in corporate banking to focus on my love of economics, which eventually turned into being a professor. Just today I was at a commencement hugging a student who graduated. I really really miss banking and the money, but my job today changes lives (although pays shit).

Whenever you think of the Jones, think about the debt that comes with it.

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The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

There is no mind control.

Maybe call it predatory psychological manipulation. Many people are highly susceptible to whatever it is they are pushing. There is a high payoff for scientific advances in this category, and not just for advertising products and services... manipulating the psychological and emotional state of large populations.

I agree there are weak minds that fall for it. There are laws that protect them (more so now). That still doesn't give them a free pass from personal responsibility and accountability. During the housing bubble, many homeowners were rewarded for poor financial decisions via home mortgage principle reductions. Much of this cost was paid for by the more financially responsible tax payer. So many banks were blamed for the housing bubble but they weren't the only player in the game. The regulators failed and, for the subject of this thread, the homeowner embraced mortgage debt as if were some credit card (HELOC's used to buy cars, 2nd homes, etc.). People seem to think a home is an investment so they embrace homestead deduction like it's a good thing, while completely ignoring that they are still paying interest on debt.

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The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

You wont buy Sears....you wont.

I agree with what you are saying. I found a deal on last years bike and had the money in the savings account to pay for it. However the retailer offered be 0% finance so I decided that would be a better option. I am guessing that will have an impact on my credit rating, but I am not buying a house or anything like that in the next 12 months so preferred to go that route. I feel like I got an absolute steal to be honest. I think finance can work out in some instances.

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He who understands the WHY, will understand the HOW.

^^^ this!!

Lol talk about a thread backfire. I reckon this guy was just looking for a free bike or discount. Why the need to go into a big sob story to justify a question about getting finance...

Another plug for Ramsey. My wife and I have a very nice household income, but were getting nowhere fast between two car payments, student loans, IRAs, and my kids' 529s. After reading The Total Money Makeover, we made some big changes. Paid off my student loans, both cars, funded a 5 month emergency fund, and now are able to easily contribute 15% to retirement, fully fund 529s, and now have plenty of leftover money for fun things. Now, if we have an unexpected financial hit (such as the big tax payment I have to make this year), it's no big deal. Before the makeover, I'd be screwed.

Like the OP, I'd like a new bike. Even with our very blessed situation, I"m not in a position today to buy the bike I want. So, we have devised a plan to save up and pay for it. That means, I'll buy it next year, but for cash. Even with 0% interest, there is always risk - that one will lose his job, have a medical emergency, etc. It would be easy to find oneself unable to make those payments, which have much larger consequences. Going the cash route, that is never a concern.

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Attacking this day with enthusiasm unknown to mankind.

Get your shit together and priority straight.
You have family: wife and sick kid. They are your priority. Go to work that will be able to secure their future. save 50-100k for your kid education, have a safety fund for the kid just in case god forbid sickens comes back.
Don't borrow money for toys. Get a physical job allowing you to have some activity, you will have money and fitness...

You guys do realize NachoLuchaLibre bumped a 3 year old post?

I've been noticing that recently that a few people are necro-bumping old posts (without even realizing it).

😳😳😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂
Now that's funny, I guess I won't get back the time I wasted reading the first 2 pages.

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"Be your best cheerleader , not your worst critic.”

So, what was the outcome??

New bike?