The First Loan I Ever Took Out


#21

@MyMoneyWizard - I did a similar thing when I bought my first car. Took the loan and then paid it off early. Now I wonder why I didn’t just negotiate the cost down and buy it outright…maybe the next go around?! 12 years later I am still driving it so I must have done something right!

@AmyB - Very fancy! I love the pin up style pics you and @Steve have of your cars! I need to get my old rust bucket out for a photo shoot next time the sun peeks out. :wink:

@NatPhorU - Interesting way to gain credit. I know parents put the kids on their accounts now to build credit but I can imagine what would happen if one of them got a hold of those cards! Your Dad was smart to put it all on you.

@8020YourFinances - Credit cards totally count! I think the first card I took out was at Walmart because they were giving away something free. Now I can’t even remember what it was!! Student loans are another huge one that I am shocked no one else listed! I never had any (no college!) but I feel for those who do/did. What a way to start your working career - financially negative!


#22

T’was 25 I think - only a couple of months out of college and finally making some real money. In my defense…if you’re going to make financial mistakes, the earlier the better! And I would definitely grab some popcorn to witness that conversation. Lots of cussing, I bet. Lots.


#23

You generally wouldn’t…the dealers get kickbacks on financing, so they can sell it for less $$ with a loan. :smiley:

My first loan was my mortgage.


#24

Yes, generally, but not always. I can be quite convincing… :wink:


#25

@thebigcheese - student loans seem to be a huge issue these days! 18 is too young to sign up for a lifetime…but I see you used it to your advantage! How long did it take to pay off the loans? Was it worth the expense in what you actually purchased?

@Melanie - an 18 year old with a new car…so hard! I had a crap beater at 16 that I paid $500 for. The only reason it was justifiable is because I was on a work release program at school where I got off early to go to my job and needed some wheels to get there. That little beater lasted a few years and then I upgraded to a nice car that the engine blew withing the first 3 months. :unamused: I should have kept the beater! Oh, and I hear you about the gap insurance. I did the same thing when I took out my first (and only!) car loan. Suckers!

@Peter - Wow!! Sweet!! I am too big of a wuss to invest in such things. Slow and steady seems to work better for some than others. Good for you guys for making a huge profit!! :slight_smile:

@Jillena - 17…yikes! Good for you for keeping your spending on the straight and narrow…even with a computer! What do you think changed in your relationship with loans that made you get so deep in debt? For me it was real estate! I also hit 500k in debt (all mortgage) but was able to use short sales to get out of most of it. It still took years to recover so I can only imagine your position!


#26

@F2P - Sweet ride! So funny that you bought the accessories before the bike. That is some true motivation to follow through with the big purchase! 10 years sounds like a great return on investment - you clearly loved it and got much use out of it. I’m super curious about the cosigning issue - I once went to a dealership to test drive a jeep and the man told me I needed my father with me “it was more car than I could handle”. :angry:

@SavingsRequired - You sound like you had a good handle on your finance even at a young age. Being I have only bought one car (though it was used) with a loan I would say I am on a similar track as you…14 years and still kicking it! :slight_smile: Was there any difference post marriage in how you take out loans? What risks you’re willing to take?

@eemusings - “If it has tires or testicles it’s going to give you trouble” - hysterical!! Good on you for setting up the loan for 18 months. People have a tendency to go for the lowest payment but don’t really calculate the price out to see they are paying far more!


#27

@MissMazuma it goes both ways. While we have also borrowed big and made some huge $2mill+ profits over the years we have also had some massive losses along the way $1mil loss especially hurt bad :grimacing:.
These days we’re certainly not as comfortable as before when using borrowed money for investments as we appreciate first hand debt is a double edged sword!:person_fencing:


#28

Well, I actually have a similar story to yours in the real estate department… At one point for a short while it was close to $700k. I sold one house and made $100k during the market flux. So I thought I was super smart. Then I had two houses with 500k in debt. So bad. It took years to recover. 15 years later I’m still trying to recover my credit but I am saving lots! Today I only have 74k house loan. We paid it down from 300k. Hoping to never need credit again for anything.


#29

I’ll say that student loans can be good and can be bad. It’s all in how you handle them. For one, if you don’t take out large amounts, then the monthly payments aren’t bad. My monthly payment is less than $200 and there’s no way I would have the job that I have today without that graduate degree. Could I possibly be making the same kind of money? Maybe, but most of my undergrad peers aren’t. But way too many people start out with six figures in debt and four figure monthly payments. That’s rough.


#30

Borrowing money for store bought boobs? That made me laugh out loud, thanks @MissMazuma!

Mine was not nearly as titillating (sorry for the Dad joke, couldn’t resist!).

A line of credit to purchase my first investment property… located on the other side of the world from where I was living at the time.

I’d flown home for a hit-and-run family visit, and by the third day I was ready to flee.

The local paper had a story about the local government giving the go ahead to a proposed new shopping mall nearby. I escaped the family for a drive, and discovered a new housing development that had just reached lockup stage located 800m from where the shopping mall was to be.

I made a cheeky offer, and three weeks later was a property owner!

Lessons learned:

  • It turns out there are no limits on what I will do to escape family gatherings!
  • Properties can be great investments
  • Flexible lines of credit are awesome (if potentially expensive)
  • Organising a mortgage in one country, while living and working in another, is not a route to serenity or inner peace.

I wrote a post about it once.

http://www.cantankerous.life/2016/11/my-first-real-estate-deal.html


#31

I absolutely agree - it’s all in how you use them. You have been responsible but so many others aren’t. This is exactly why financial literacy is so important. Really understanding the ramifications of credit is difficult if you’ve never been in debt before. Most kids are going into college completely unaware of the amount of hard work it takes to pay off the loan amounts they take out. It scares the crap out of me that my BF’s kid is 2 years away from being in that very position. He is clueless about money! :sweat_smile:


#32

Right?! I mean, I’m pretty sure she got them from a doctor, not Walmart, but the fact remains that it was her first loan. And again, I don’t want anyone to think I was dissing the boobs, per se, but it was just an interesting catalyst to the rest of our conversation. Where does debt start? Wanting something so bad you are willing to borrow money for it. Titillating, indeed… :wink:

As for your purchase…wow! You really did want to escape…pretty sure a frozen yogurt would have cost you less! :wink: Glad it turned around for you.


#33

Lol! Thanks @MissMazuma, you’ve opened my mind to the economics of store bought boobs, which is not something I’d ever thought about previously.

Now that I reflect on it what your friend did, it actually kind of makes sense that it might be a person’s first loan.

Were their chosen profession (or prospective profession) one that relied heavily on physical appearance… acting or news reading or modelling or sales or professional sports or whatever, then their chances of being offered those valuable early opportunities would potentially improve considerably with straight teeth or perfect hair or maybe a Hollywood nose or silicone enhancements.

Therefore if they going to venture down the store bought assistance route then it would make sense to do it early, maximising their chances of success and their return on investment. However it is precisely in those early stages that the person is unlikely to have the means to pay for the help, hence the loan.


#34

Raises hand in shame as I mumble swear words towards Sallie Mae…:sob:


#35

Well if CC count then Mom n Dad told me about getting my credit score going so…

Montgomery Wards credit card. (How many of you know this place?) Bought some furniture… many, many years ago


#36

Actually graduated 2 years ago in May. I’m scheduled to pay on them until 2025, but fortunately I’m smarter than 18 year old me. They’ll be gone by mid 2019.


#37

Other than a credit card that I never carried a balance on I’ve never had a typical loan.

Now, if we’re including loans from the bank of mom and dad. My first loan was a new-to-me used car upon graduation from college. It was part loan part gift, they said a certain amount was my graduation gift and I had to pay back anything above that when I picked the car - no interest added.

A mortgage will eventually be my first official on the books with interest loan though.