mega millions

S

Spektor

Guest
Why do millionaire celebrities like for imsance floyd maywether take out loans for cars and houses when he can buy it upfront? Why do millionaires do this? Why do they take out loans for stuff they can purchase in one swipe?
 
Because they taste might change and then rent make more sense than buying because if you have a ferrari and then want a new lamborghini you gotta a 300k car standing around that you don't drive no more
 
^
Still makes no sense, why buy it on credits? You'll have to pay it off every month, imagine buying 10 cars then having to pay a big sum every month.. if you BUY the car, then you might be able to trade or sell lol.. smarter.
 
UnkNowNGenius said:
^
Still makes no sense, why buy it on credits? You'll have to pay it off every month, imagine buying 10 cars then having to pay a big sum every month.. if you BUY the car, then you might be able to trade or sell lol.. smarter.
Click to expand...

If they don't want the car no more they'll find a way to stop paying, if you're rich you can actually do shit like that
 
because when you have millions
ppl buy stuff they would never buy
like a
$500 vase
or a
$5,500 stereo

it's wasteful to us because we aren't millionaires

yeah they can buy in one swipe and it is smarter
but money changes ppl's mindsets
ppl think they will continue to rack in the dough even after their career is way over
and still want to live the expensive lifestyle they had when their career was at full speed
that's why you have tons of entertainers/millionaire in trouble with the IRS
and bankrupt but still living better than most other Americans(money/car/home-wise)

you know this Spektor simple common sense


-Coach Antonio
 
They do it for the same reason people lease cars (ALMOST). Those people can afford the payments, they just want cheaper payments.

Buying it costs more than making payments on it. They might want to get a newer car before it's actually paid off.

You buy a $200,000 car, your payments are $4,000 a month. You keep the car for 6 months and then you want something else... you paid $24,000 and had a lot of fun. You got killed in interest but you still have like $170,000 that you didn't plunk down on the car you drove around for 6 months.

Sort of like when Beans took over those payments on that car Dame Dash had. Dame Dash didn't have to pay the full amount of the car but he had some good times in it... the rest of the payments were Beans' problem.

They're basically leasing the stuff they buy, they intend to sell it or get rid of it eventually.

What if you bought a car in 2012 an expensive one... if you were a star like Floyd Mayweather, would you still drive it in 2017?

... or would you get rid of it and get something else to stay current?
 
Last edited:
I guess its because to earn 1.000.000 they have to tour through the whole year, and they want that car here and now.
 
Because they're stupid and hire financial advisors who don't always have their best interests in mind.

That's why most go broke and lose petty stuff they coulda paid off at their prime.

Regular people do it too. Why buy a brand new $80k mercedes that you end up paying $1,200 a month for when you coulda bought a $15,000 Toyota with what you had in your account flat out? People live outside of their means whether they make $100k a year or $1M a year.

These millionaires don't HAVE ENOUGH LIQUID ASSETS to buy all 10 sportscars they own and the 3 properties they dwell at, they'd rather have money going in and out and own all this stuff til things go to shyt for them and lose it all than to just own 1 home and car(or a few cheaper homes and cars in most cases).
 
Their financial advisers tell them to do this. It is wise to get a loan on a house no matter how rich you are. Unless you know you are going to stay in a house for the rest of your life, don't buy it cash. Even Mark Zuckerberg has a mortgage on his million dollar homes in palo alto and san francisco.

Let's say you have $10 million. There is a $3 million dollar home you want. You have two choices with that $3 million:

-You can buy the house cash $3 million with no guarentee it will go up in value and not worry about mortgage payments. That $3 million is gone and you can't get it back.

- Or you can put $600,000 down and have a huge montyly mortgage payment you can afford and have $2.3 million left to invest in stocks that will beat the inflation rate or buy a Mcdonald's franchise that will be making you money for the rest of your life.

Which of the two options is wiser financially? This is how the rich stay or keep getting rich.

Now as far as rappers going broke with no house to their name? There is no guarantee you will be hot next year. In their case buying a simple 3,000 sq ft. $250,000 house cash in their hometown would make sense since they don't have a guaranteed income source to make mortgage payments.
 
Last edited:
^^^If you got 10 Million dollars with no assured way of making a penny more, IMO, you shouldn't be investing $3M in a house period. $1.5M top and BUY IT. But say you want a $3M house, just BUY IT. What difference will it make if you're making payments? That just means if you do finally pay it off after 10-30 years, you've paid $4M(after interest)for your $3M house. If you opt to quit making payments, you get foreclosed, lawsuits from lenders, ect.

Even if you buy the $3M house when you can afford it, and have to resell it someday for $2M to get rid of it reasl quick you're still coming out $2M richer in the end and in a better situation than 1 day being broke with no paid off home, right?

I bought my home cash for that exact reason. It's crazy to not have overhead like Mortgage/Rent. That's what most people work to pay. I'd rather have $7M in the bank and never have to pay mortgage/rent again than to have $9.5M with a $30k a month mortgage. God forbid I opt not to make a payment in year 8 or 9 of paying on that 10 year mortgage and have nothing to show for the $30k a month I shelled out the last 8-9 years, it happens all the time.
 
deRaNged 4 Phuk'dup said:
^^^If you got 10 Million dollars with no assured way of making a penny more, IMO, you shouldn't be investing $3M in a house period. $1.5M top and BUY IT. But say you want a $3M house, just BUY IT. What difference will it make if you're making payments? That just means if you do finally pay it off after 10-30 years, you've paid $4M(after interest)for your $3M house. If you opt to quit making payments, you get foreclosed, lawsuits from lenders, ect.

Even if you buy the $3M house when you can afford it, and have to resell it someday for $2M to get rid of it reasl quick you're still coming out $2M richer in the end and in a better situation than 1 day being broke with no paid off home, right?

I bought my home cash for that exact reason. It's crazy to not have overhead like Mortgage/Rent. That's what most people work to pay. I'd rather have $7M in the bank and never have to pay mortgage/rent again than to have $9.5M with a $30k a month mortgage. God forbid I opt not to make a payment in year 8 or 9 of paying on that 10 year mortgage and have nothing to show for the $30k a month I shelled out the last 8-9 years, it happens all the time.
Click to expand...

Well if the rapper don't plan on moving for the next 10-20 yrs then yes buying a house cash makes sense. I'm assuming if he doesn't have another hit ever again and the royalty checks become peanuts because it wasn't a classic and he has a criminal record and can never land a good paying job because of it, then yes I would suggest buying a house cash.

BUT if you have businesses or a good paying job after music, having a mortgage is a tax break. That mortgage interest is a tax write off. Uncle Sam is going to get his cut whether you sit on your money or spend it. That $7mil in the bank, the interest is taxed. You got inflation and Uncle Sam chipping away at your wealth every year. That house is going to be there whether it's paid off or has a loan on it. Why not use it to your advantage and give less to Uncle Sam while you invest the res
 
Last edited:
mac_luv said:
Well if the rapper don't plan on moving for the next 10-20 yrs then yes buying a house cash makes sense. I'm assuming if he doesn't have another hit ever again and the royalty checks become peanuts because it wasn't a classic and he has a criminal record and can never land a good paying job because of it, then yes I would suggest buying a house cash.

BUT if you have businesses or a good paying job after music, having a mortgage is a tax break. That mortgage interest is a tax write off. Uncle Sam is going to get his cut whether you sit on your money or spend it. That $7mil in the bank, the interest is taxed. You got inflation and Uncle Sam chipping away at your wealth every year. That house is going to be there whether it's paid off or has a loan on it. Why not use it to your advantage and give less to Uncle Sam while you invest the res
Click to expand...
Not arguing, just discussing, but still illogical IMO. That "tax break" makes sense when talking about an $80-300k home(in which case you probably would still be better off just not having to pay rent/mortgage all year). But why NOT pay off a home that costs you more in interest than you'd make from the tax break? We're talking a 3M home, we're talking 25k a month before interest. You're not getting that INTEREST back in the form of a taxbreak. Even if you do decide tyo one day move, you're gonna have to sell whether you own or making payments.

I'd rather own a home on the market that costs me nothing while it sits waiting for a bid than to be paying $25k(before interest)monthly on a home while relocating and buying something else. Why even buy the real estate if it's not permanent whether making payments or flat out? Just rent.

These ideas come from an era when money was constantly increasing, in this day and age, no such luck. Even your "investing" that you put above flat out buying and owning can drain away the money you coulda just put towards owning your home. then you're an investment in the hole with 7M left while still owing 3M(after interest) on that same home you could have paid off.
 
To the op its called the time value of money.

Say your mortgage is 4%, but you have investments that are going to make 8%, it wouldnt make financial sense to have a lot of money tied up when it could be working for you overtime. Thats a simple way to explain why rich people would do it.

If you ever get into this "should i buy a house all cash or invest my money" conundrum, then congrats. You'll have enough loot to pay someone to make these decisions if you dont get it.
 
^^^And those guys who you pay to make decisions have screwed alot of people as of late because their old systems no longer work. Investments are always gambles. Just settle for a home that's cheaper if you wanna invest. Buy a 1M home and invest 2M instead of making payments on a 3M home you'll ultimately lose to foreclosure when everything falls apart. That is statistically more often than not the story these days. That's what's wrong with Americans. We keep spending imaginary "if and maybe" money.
 
Last edited:
You must log in or register to reply here.
Back
Top