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Thread: Lease vs Cash vs Hire Purchase

  1. #31
    Join Date
    5th December 2008 - 15:00
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    2008 Kawasaki z1000
    Location
    Mount Maunganui
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    194
    Quote Originally Posted by cowpoos View Post
    More importantly...you have to classify/justify its use in bussiness!! Its very easy for IRD to see use for personal gain...but the business gain of the machine would be??
    Ah.. thats easy: Im using it for business use. I travel to Ham and back 3-4 times a week at the moment and use it for getting round town during the day for various stuff (tauranga-mount bridge is a joke!).

    But as well as that, for personal use in the weekend.

  2. #32
    Join Date
    9th July 2004 - 12:34
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    KTM300EXC
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    Porirua
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    I'm all for getting a bike whichever way you can that's cool. Something to think about if you can be bothered reading any further - Please I'm not trying to tell people how to live their life just some free advice for those that are interested and it's only that - feel free not to read.

    So...

    There are only really two classes of items you have on a balance sheet (and in your life in a financial sense that is), an ASSET or a LIABILITY.

    An ASSET makes you money.

    A LIABILITY loses you money.

    You should work hard to get rid of Liabilities from your life and acquire Assets. Also, NEVER finance a Liability.

    WTF??

    Think of it this way. If you have $20,000 in the bank at 5% interest, that is making you money. $1000 a year in fact. So it is an ASSET.

    If you have $20,000 in a bike, it is depreciating so it is losing you money. It is a LIABILITY.

    You make things even worse, if you finance that bike.

    Not only is a bike worth less every year (unless say its something like a Vincent Black Shadow for example), you pay interest to a third party so it's a double whammy.

    Say the bike loses 10% of it's value every year, and the finance company or bank charges you 10% interest for your finance arrangement. That means you are paying $4000 a year just to have the thing in the garage (assuming you financed 100%) and you haven't even started paying the thing off!!!

    So, for what it is worth unless you need the bike to get to work say, lease or finance only on the understanding you are throwing cash away, away, away. Can you afford to burn cash? Is your name Bill Gates?

    If you want to get to a life of financial independence, one where you can tell your boss to shove his job because you can afford too, the sooner you apply the approach of FINANCE ONLY ASSETS (e.g. a house or a business) to your life - the sooner you will get to that financial independence. And telling the boss to f-off. And then buying with CASH the toys you really want.

    Pay cash for toys. Don't finance them. Finance Assets.

    Good luck :-)

  3. #33
    Join Date
    5th November 2009 - 09:50
    Bike
    GSXR750, KTM350EXCF
    Location
    Auckland
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    2,264
    Quote Originally Posted by That Guy View Post
    I'm all for getting a bike whichever way you can that's cool. Something to think about if you can be bothered reading any further - Please I'm not trying to tell people how to live their life just some free advice for those that are interested and it's only that - feel free not to read.

    So...

    There are only really two classes of items you have on a balance sheet (and in your life in a financial sense that is), an ASSET or a LIABILITY.

    An ASSET makes you money.

    A LIABILITY loses you money.

    Pay cash for toys. Don't finance them. Finance Assets.

    Good luck :-)
    If only it was that simple.
    I need vehicles for staff to get from job to job. It is an asset and a liability, but yes cash for toys is the way to go.

    You just have to manage the difference.

    For those looking at leasing, most have a maximum km limit and if you go over that it costs you money.
    our company can't do it as we rack up far to many k's in a year.

    On FBT, if you say it is available for private use then it is charged at 20% of the vehicles value less depreciation, less when it is not available i.e. getting fixed, you've gone on holiday.
    But to be classed as a company vehicle it has to be for the purpose of the work involved.

    But the up side is you can charge track days as vehicle training days.

  4. #34
    Join Date
    12th November 2009 - 14:57
    Bike
    Yamaha YZ250F
    Location
    Hamilton
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    94
    Quote Originally Posted by That Guy View Post
    I'm all for getting a bike whichever way you can that's cool. Something to think about if you can be bothered reading any further - Please I'm not trying to tell people how to live their life just some free advice for those that are interested and it's only that - feel free not to read.

    So...

    There are only really two classes of items you have on a balance sheet (and in your life in a financial sense that is), an ASSET or a LIABILITY.

    An ASSET makes you money.

    A LIABILITY loses you money.

    You should work hard to get rid of Liabilities from your life and acquire Assets. Also, NEVER finance a Liability.

    WTF??

    Think of it this way. If you have $20,000 in the bank at 5% interest, that is making you money. $1000 a year in fact. So it is an ASSET.

    If you have $20,000 in a bike, it is depreciating so it is losing you money. It is a LIABILITY.

    You make things even worse, if you finance that bike.

    Not only is a bike worth less every year (unless say its something like a Vincent Black Shadow for example), you pay interest to a third party so it's a double whammy.

    Say the bike loses 10% of it's value every year, and the finance company or bank charges you 10% interest for your finance arrangement. That means you are paying $4000 a year just to have the thing in the garage (assuming you financed 100%) and you haven't even started paying the thing off!!!

    So, for what it is worth unless you need the bike to get to work say, lease or finance only on the understanding you are throwing cash away, away, away. Can you afford to burn cash? Is your name Bill Gates?

    If you want to get to a life of financial independence, one where you can tell your boss to shove his job because you can afford too, the sooner you apply the approach of FINANCE ONLY ASSETS (e.g. a house or a business) to your life - the sooner you will get to that financial independence. And telling the boss to f-off. And then buying with CASH the toys you really want.

    Pay cash for toys. Don't finance them. Finance Assets.

    Good luck :-)
    If you are self-employed interest cost are tax deductible
    As with any Asset you can also show the depreciation as an expense against your taxable income and pay less income tax.

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