Financing your swimming pool

[webfeet]

I think the book I am speaking of was written in the 80's and I think it was authored by Larry Burkett. Nonetheless, the author promotes the concept of getting out debt, and shows you how to calculate the money that is saved when prepaying on a mortgage. The savings are huge when a mortgage is young. Bankers tend to be wealthy because they realize and take advantage of the way interest works. However, I reviewed the site posted above. I love tax deductions as much as anyone else . But I believe that interest that is deductible only reduces my taxable income by the deductible amount. For example purposes, assume I paid 6,000.00 a year in interest that qualfied as a tax deduction, and assume that I am in a 10% tax bracket, I would save $600.00 in taxes, so I would still have a loss of$5400.00 . I'd have to make at least that much on my investments just to break even.( assuming that I am not paying any interest on credit cards, cars, or other financed items, in which case I will still be in the hole )Please IM me, if you know of any safe or moderately risky investments funds that have routinely made as much as 8 or 10% consistently in the last few years, much less 14% . I am surprised the moderators have permitted some of these posts to remain, since they are off the original thread subject. But to get back on subject, I have rethought the financing of a pool. If you need to borrow money to have a pool, perhaps you could borrow from your parents or other relatives that would let you have the funds interest free. Better yet, get them to finance your house interest free!

[SeanB.]

Clearly the interest rates were different when that site was made, as they were at the time the book was written. However, the same principals still apply. The home we just closed on has about a 6.5% interest rate. I don't think you'd have to be too savvy an investor to beat that by at least 3% over a 30 year period. The historical average for the stock market, with all the highs and lows, is around 11.9%.

BTW, I don't doubt your word on the author of the book, I was just unable to find it. Amazon has dozens of books written by Mr. Burkett going back over twenty years, but none titled Banker's Secret. Maybe the one I found is an updated version. As I understand it, most of the book is tables anyway, so perhaps they made a revised version to apply to today's figures.

At any rate, my only problem with this type of discussion/debate is when people take the position that their way is the best way. There are so many different financial situations and scenarios that it really isn't fair or accurate to describe any one way as the best way to finance or pool, or do most anything for that matter. To me, it's helpful if people just give their experience and reasoning and then perhaps that will help others with their decisions.

Just my .02.

[webfeet]

I don't remember if the book was mostly tables or not. However, the principles are what interested me. Whether interest rates or 5% or 10%, the borrower is still paying to borrow. The less a person has to pay to use money, the better off he or she will be. Especially, if the money is used for non- necessities. Unless, of course, they are so wealthy that they need tax deductions related to operating a business. I am speaking of the average individual that has to borrow to pay for basic needs, when I discuss the benefits of not paying interest.
On the other hand, if someone was disciplined enough to remain in the stock market, and consistently make the right choices, over a period of 30 years or so that individual should gain maybe 8 to 10%. However, few people with 2 or 3 mortgages, car payments, and/or other revolving charge accounts,have the discipline to commit to routine deposits into investments, nor do they have the knowledge to make the correct choices. Many times they are so indebted that they don't have the spare funds in their budgets each month to make routine investments. In most cases, people are better able to invest when they are less indebted.
Financially speaking, for the average to upper middle income earner, in most cases, the less paid in interest the better. Yes, everyone's situation is different, but basic finanical principles remain. People have different priorities and different reasons for their actions. If a person's purchase that is financed, is escalating in value so quickly that their equity will surp*** the costs of interest, then paying interest may well be desired. However, pools don't usually appreciate in value.

[webfeet]

I stand corrected. The book, "The Banker's Secret", was written by Marc Ericson. With the depressed housing markets and foreclosures, and unemployment rates high, I wonder if anyone regrets borrowing money for a pool?


Webfeet