Money Question... E.T.A, AGAIN...

I would say that selling off an asset to pay off debt just to be paying off debt is not needed. A nice thought but not needed.

Yeah, I would sell it, clear the debt and maybe buy it again later on down the road when you have the cash for it. I've done it myself.

If you are in debt, that means you can't afford the item.

Sell it. Buy it when you can acquire the item with cash and NO debt.

Do you USE this luxury item? what does it represent?
Why would you buy it again in the future?

Thats the info I would need to evaluate the question.

For example. It's a diamond engagement ring- don't use it, can do without it, but represents something special.

Or a souped up Muscle Car sitting in the garage... just something pretty and cool to own and look at.

A boat- could do without, but actually able to use it and enjoy it while you have it.

I guess I'm leaning toward selling the luxury item, and not even buying again in the future. You can do without it now, you can do without it later as well.

Or keep it becuase you like it. I don't get the whole "sell it to pay off debt, then just buy another one in the future anyway"... usually it's buying big luxury items that are unnecessary that puts you in debt in the first place.

i knewthat was going to be about your motorcycle. i would sell it ONLY if you could live with one for a few years, to wait until you could save to buy a new one in cash again. Also, only if you could find one you liked as much at the same price yourd sell it for. If the chances are low that you'd ever let yourself spend the cash on that item again I;d say keep it instead of regretting it

Ummm, ok I didn't read the other posts so I may be repeating. You have the item, you want the item, but you are going to sell the item only to buy it again?

Unless you are in dire straights I would keep it. Why? Because once you buy something it depreciates (most things) in value. Like cars. As soon as you drive a brand new car off the lot it depreciates by around 30%. So why would I buy a new car, sell it for the depreciated value, and then buy it back new? Seems like a waste.

Then again if you want straight numbers. How much will you sell it for? How much did you buy it for? How much will it take to repurchase said item?

Take that number, and figure out how much you will be saving on interest with your current debt. Which ever number is greater wins.

I would not sell it if it makes you happy. I don't suggest anyone go splurge on a toy, but, you already have this one thing that belongs to you. I'm willing to bet you probably had to make a few sacrificies to get it. It makes you happy. It's a hobby that isn't costing you any money.

Being debt free is a great goal and one you will always have and continue to work toward all your life. We get out, we get back in, we get back out again. It can be taken away by an illness or an unforseen circumstance. If you sacrifice your only luxury to reduce debt and then find yourself back in debt, you will feel totally ripped off!

Did I miss a question previous to this one with some additional information? Because I would need more information to be able to make a decision about it. Is the debt load a problem right now? Is your cash flow in the red because of it? What is the interest rate on the current debt? Would selling the item be enough to pay off the debt in full, or just "towards" it?
Is there some serious potential for near future changes in your income (to the negative)?

I guess, seeing that you KNOW you will repurchase the item, I am not seeing the urgency. Is there any urgency, or is it just because you have decided to pay off all debt? Because that matters in making the decision. Is there some upside besides just having the debt paid off (not that that isn't a good thing--- being debt free).. .but usually there is a bigger benefit than that. More financial flexibility that you are looking for, for some specific reason--you need to replace a car, you have a trip you want to take, you have a medical procedure coming up, the kids need braces, etc.. you get the idea.

If it is JUST and soley to be able to pay off the debt, and the interest on the debt isn't more than 1% or so.. then I probably would hang onto whatever it is. But if there are other issues that come into play (Jr needs braces THIS SUMMER, the cash flow is wrecking your sanity, whatever).. then I'd have to look at it more open mindedly.

Like any other equation you have to access it's worth and it's future worth then weigh that with the interest savings paying off debt.

In other words you owe 1,000 and the item is worth 1,000. You will pay the debt off over four years paying say 200 in interest. The object will increase in value by 100 in the next four years. Then pay off the debt. If the object will increase 300 in the next four years, keep the object.

After reading your what happened: I got what you are saying, was I not clear? You have to look at how much more it will cost you to re-buy, if that is larger than the savings of paying off the debt then it is not cost effective to sell the item. If you want to make it complicated add in time value of money as it relates to the amount of time beyond the term of the debt to when you anticipate buying the item again.

Don't you wish I had stuck with the first answer? :p

Does the item have any sentimental value? What percentage of the debt would it be paying? Is this something that appreciates in value? Do you use this luxury item? Will is cost you more to replace then when ou bought it orignally?

I would consider the above and base my decison on that... hard to give an opinion with the data you provided, but if it does have sentimental value, pays only a small % of the debt, would appreciate in value etc, then I would not sell.

sell it, because if you are in debt you really can't to aford to have the item.
Buy it again when you can aford it without getting into debt.

No, I got your point. My point is if you are in debt and cannot pay your debt and you need the money - you should cell the bike and pay your debt. Then buy another one when you can afford it without getting a loan. (I realize that the bike did not cause the debt)

EDIT:

I am with the wife. I remember my husband wanting to pawn or sell one of his first computers to send money to his mom. I would not let himi. I told him he struggled and saved too hard to do this. He didn't sell it. We took out a loan for a year which improved our credit rating and were done.
Keep the motorcylce because it is going to cost more to replace it than and you will regret it.

I would try to pay the debt of another way. You sell the item for X and how much more is it going to cost you to but it back? Prices always go up and not down. Selling the item may not bring in as much money as you hope for and you still have the debt.

I would rearrange or explore other option with my budget bit to pay off the existing debt.

Everyone says they wiill buy back something they sell and 9 times out of 10 they don't and resent the fact that they don't have the item. LIfe gets in the way and we need the money for something else.

Sorry I didn't answer any better.

The other S.

Dave Ramsey's advice is to ask "would you borrow money right now to buy it?"

Obviously not - HOWEVER - I would also ask myself "Will it cost more to purchase in the future, than what I can sell it for?"

I don't think you have to sell everything you own - unless your debt is in THAT bad of shape.

If your revenue is going to be less than the replacement cost, then I say hang on to it. Because really, you're going to go *back* into debt to re-purchase this item that you already own free and clear.

However....if you don't use the object and MAY or may not buy it again, and it could drastically reduce your debts, then I'd probably try and sell it.

J.:

Personally? I would rather pay off debt than have a luxury item that looks nice on the shelf or somewhere else in my house. I would assume though that this luxury item is insured - my valuables are insured. So it's costing me something to retain it. Is it worth the cost to retain it?

If I am not ACTIVELY using it and I have debt - I would sell it as long as I knew it would bring some serious cash in and by serious cash - I mean enough to pay off the debt in question, not just put a dent in it.

If you only plan to purchase it again when you are in better standing - I don't know. If you aren't using it - why would you want it again? Is it something like a Picasso painting? For me - paying debt and staying debt free is priority...luxury items are NOT.

I guess I have more questions than advice.....

will this luxury item bring in enough money to clear the debt in question or only cover a portion of it?

Will the amount brought in from this sale benefit me in more ways than one?

Why would I want to purchase this item again in the future?

aaaahhhh sorry - I think I had more questions than advice. SORRY!!

I'm guessing your item isn't property, as there are maintenance costs and taxes associated with that, nor is it likely a car, boat, RV or other vehicle, since insurance and maintenance fees exist for those, too. I point this out, to make sure you are also considering that just because something is paid for, doesn't mean it doesn't also cost you something.

For things that you do truly pay nothing on it would really depend, for me, on the object, and what it means to us. Wedding/engagement rings and certain inherited objects - too high an emotional cost to sell. There is also the probability of not eventually being able to replace something that we genuinely enjoy, that we would miss and regret selling.

Also, if you sold this item, would it make a significant enough difference? Cost vs. benefit. If it is an item that you enjoy and would definately replace, is the hassle of replacing it worth whatever debt you would erase? Ie, if you are selling something worth $200 in order to send a little more money to a 30-year mortgage, well, no - probably not worth it.

On the flip side, if this is something you keep more out of habit than real affection - say, that painting that someone gave you when you got married that you are kind of ambivalent about, but because it's an original you can get enough to pay off one and a half credit cards that have been nagging at you, well, definately worth it. And then replace the painting with art you actually like somewhere down the line.

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Keep it.

The $200 a year to keep it doesn't seem to be breaking the bank. Also, if your wife isn't anxious for you to get rid of it, then she's seeing your pleasure in owning it, as worth more than the debt its loss would help with.

You are guilt-free on this one, my friend. Appreciate that your wife loves you, and keep it.

We sold my husband's motorcycle under the same circumstances. We preferred paying off the debt now and dealing with later at some point in the future. My husband would like to get another bike but then again it might not happen for a while, maybe ever. Good luck.

Um....this is a no brainer. Cash in the asset to pay off debt then buy it when you can pay ca$h. That's how things work in our house. And my husband has a pretty sweet Harley. And we don't "do" debt. :)

Dave Ramsey would probably say "would you borrow money to own the item?" If not, then why are you essentially staying in debt to keep it (by not selling it to pay off or down the debt)?

Unless it's a sentimental item like an engagement ring or family heirloom then I would sell it to get rid of debt faster.

Good luck - my curiosity is killing me - what is it?

well, if you paid it to pay off debt, that makes you better off financially. In a sense and could re-purchase this luxury item immediately. I think the biggest question would be is this luxury item's value going up, remaining the same or decreasing? in other words, if you bought a new one, would the value be the same as the one you just sold? or would you be creating more debt with something not as valuable as you originally had? know what I mean?

I would sell the luxury item and pay off the debt......I would wait until financially secure with no or minimum debt before I would consider buying the item again and if I did buy it I would make sure it doesn;t put me back where I started - in debt.....I am very averse to being in debt - some bad childhood memories of parents always being stressed about debt so I just do whatever is takes to stay out of that mess.......but sometimes it is just unavoidable.
my husband would say it is a numbers question - doesn't cost you to own the item, what are you paying for your debt (percentage of interest wise) and then would you be able to reacquire the asset at a lower interest than what you are paying for your debt now..................

Do you really love it? So much so that you will instantly buy it back or one just like it when you can afford it? If so, are you confident you could one day replace this luxury item?

I say sell it *ONLY* if you truly believe you will be able to replace it one day!

There are a lot of factors.
1. how often do you ride the motorcycle? Do you have other transportation if you get rid of it?
2. Can you get enough for it to make a significant dent in your debt?
3. Have you exhausted other options?

Since you plan to buy it again later, I would lean towards not selling it now, since rebuying it down the road will only send you back into debt. Find other ways to cut your expenses and see if you can pick up a little extra work here and there - every bi helps. I recently found a blog writing job that pays $25 per post and I am supposed to post once a week. It provides an extra $100 per month, which isn't a lot, but is enough to pay for our phone & internet bill!

Sell it now. Use the cash which it sounds like you need more to pay
down the debt.

You can always rep-purchase this item at a later date when you have more money again.

Hope I didn't miss the mark.

Helpful to know it's a motorcycle -- these are not necessarily just any ol' luxury item but often an investment of the soul ;)

If you feel like you could find a suitable replacement later, not a huge deal to sell now to be able to get rid of debt.

However, if it's a vintage, hard to find model that you are sentimentally attached to and your soul would be irreversably damaged if you couldn't find/afford another same/similar kind down the road, then you might want to consider keeping it.

Bikes do wierd things to people... you might not be one of these folks but my advice is taking this possibility into consideration just in case.

Well, the luxury item isn't costing you money, but the debt is, so best do what it takes to get rid of the debt. Last year my husband sold his 1966 Chevy Impala so we could get a new driveway and not have to take out a loan for it. He was sad to see it go, but when we have the money, he will probably get another classic car. Years ago he sold his 1969 Chevy Camaro RSSS when we bought our house.

If this luxury item is not insured, what would happen if it was destroyed? You would get nothing for it. Most luxury items require additional insurance. If it is not costing you anything to own it, I am assuming that it is not insured. You might want to sell it while it still has value. Just make sure you can get a good price for it.

If you sell this luxury item, it will help you pay off SOME debt? Is this mortgage debt or consumer debt? What does your wife think? Is she pushing you to sell it?

Sounds like selling it is a good idea. But not if you are going to spend the next few years resenting your family for pressuring you to sell it. (This happened to my friend whose wife "made" him sell his prized motorcycle.)

If you really want to keep the luxury item, and you are not like those people from "Hoarders", then maybe give yourself another six months to think it over. In the meantime, see if you can save money in other areas of your budget to equal what you would have earned if you had sold the item. Then you can reward yourself by keeping the item. Good luck!

ETA: LOL! Keep the motorcycle! You won't be able to find another one EXACTLY like it.

The more debts you pay off, the more momentum you build to keep at it. Being debt-free is such a great accomplishment, but in today's scary economy, it should be a goal we all try to reach.

If you sell the motorcycle, you cannot buy another one unless you have saved up the cash and are out of debt. That is another smart financial move - saving up to get something before you buy.

I would sell it and start making great financial decisions from here on out. Set up a schedule of how long it will take to get debt-free (there are calculators online) and go for it!

Just to pay down debt? No I would keep it.

To pay the rent/mortgage because I had no other way? Yes I would sell it. I would say pawn it, but that isn't helping your debt situation. :)

It would really depend on how deep in debt I was, and what the item was. It makes no sense to me to sell something only to buy it again. If it a useful item that is going to be used- car, camper, boat, etc, that gets used, then it doesn't make sense to sell it, and it may cost you MORE to re-purchase it.
If it is like a TV, stereo, piece of jewelry, them maybe.
But, again, it would depend on how deep in debt I was and what my ultimate goal would be after I was out of debt.

i would hang onto it :) but i love motorcycles. to me if it is owned outright and is not debt, AND you would want to replace it later, then it's not worth it. probably not the dave ramsey answer though...:) good luck whatever you decide.

Well, there is also registration fees that probably run $60 a year.
If the debt you speak of is on an interest bearing account or loan,
you need to consider how long it would take to pay off the debt
and add up the interest that you would be saving if you sold the
bike. I would also consider how much you love this bike, and would
you really purchase the very same year and model in the future?
I wouldn't get rid of my only means of transportation, though.
It is a beautiful thing to be debt free. Even then, the cost of living
when paying cash is a tough one.
Lots of luck to you and your decision.

Is there any sentimental value in this item?

Are you able to pay down the debt at a decent rate w/o selling it?

Is it an item that your family uses for time together (like a boat?). We have a boat (no $ owed on it) and I wouldn't sell it unless I was in dire need b/c we love to go fishing and boating as a family. It's what we do when we have time off together. We don't travel or do huge vacations ~ we camp and fish.

Will buying this item at a later date put you back into debt?

If you wouldn't mind having a newer make/model bike in the future, then yes sell it for the cash. If this is the exact bike you would want in the future then keep it.

I would go ahead and sell it. Clearly the debt is a burden on you, and if the item is not something you actually need, then doing without it will not hurt you. Luxury items rarely appreciate in value, contrary to the 'conventional wisdom', so if later you find you really want this thing again, you will be able to find it, possibly for less than you paid initially, or recouped by selling. You might also find that you lose interest in reacquiring the item once it is no longer in your life.

Why so mysterious about what the item is? And why would it bring 'instant cash no questions asked'? I'd ask questions about ANYTHING I was buying from ANYONE, even a gold brick. :)

Could you buy it again later for the same price that you sold it for or less? If not, don't sell and then pay extra later. Also, will you be able to find it again later to purchase? If not, don't sell unless you are behind on your debt's payments or can't afford the payments on your debt.

How bad is the debt?
Sure the luxury item is paid for (no loan or monthly payments) so THAT isn't costing you, BUT it's costing you ($70 +($10 X 12 months) =) $190 a year and you have to add in a bit for oil, tires when they need replacing it, maintenance things, etc.
Does that $190 plus a bit help with the debt?
If you sell it, and you can wipe out the debt, you can add up that $190 and the interest you are not paying on the debt anymore to save up for that luxury item down the line (buy it with cash - don't do a loan).
Unless it becomes a classic collectors item kept in mint condition, motorcycles depreciate, so it's value becomes less the longer you hold onto it.
You have a window of opportunity that's open right now.
Wait too long and selling the bike won't be enough to wipe the debt out.
The debt is costing you in interest - it's causing money to flow out.
It's worth it to be out of and stay out of debt.

Nothing feels as good as being debt free. You should sale the bike and pay off your debts. After you're debt free, pocket the money for a while and buy another with cash.

I would sell it now and work to pay off your debt. If you are in a position to once again buy something like it later without going into debt again, then you can explore that choice. But you might find that you don't need it later anyway.

My opinion is that if selling the bike would get you out of ALL your debt, then yes, I think it would be worth it. But by selling it you still had a lot of debt left, then no, I wouldn't do it. By the way, I just sold my "baby" so we could have no more car payments. Made me sad and happy at the same time. Good luck!

With such a general question, my first thought would be to keep the motorcycle and explore other options to pay off the debt.

However, there are other factors that need to be considered....
How much interest are you paying on the debt?
Are you struggling to make the payments on the debt?
Will selling the motorcycle, completely pay off the debt?
If the motorcyle used as a form of transportation or strictly for pleasure?
How often do you use the motorcyle OR is it just for you, or do others in the family use it to?