A good deal now versus buying with bigger debt later?

[xShane]

My dilemma;


I am a student, and for the next six years I will continue to be. While I am suffering from dyslexia, going to school has and is difficult, and it has meant that I always had to invest more time into studying than others. This has made my time allowance for part time jobs, lower, and thus I have been unable to save up for expensive things.

I was going to take a massive(for me) loan in the bank, for a Thunderbolt Display + a high end Haswell refreshed Retina MBP 15 inch, and apple care and see if this setup could get me through the majority of the years at university, thus justifying the price of admission paying it off.

The problem is that the interest rates a student like me gets are horrible. We are talking interest rates of 25-30% which means that if I take a loan of 5000 dollars, I am going to be paying the banks more than double the amount back over the course of four years. That is going to suck.


Being 25 years old, having never taken a loan thus far, and still having not travelled and all that, I fear I underestimate the consequences by taking such a crazy loan.



But alas, a guy I know told me about a deal for the employees of the reseller store he works at, were I can get a MBP15 with Retina Display, with interest rates at 1% over the next three years. It comes only with 8 gigs of ram which bumps me out, and not having all the wonders of haswell - faster CPU, GPU, integrated GPU, new wifi standards and all that.

The problem is that this opportunity, is only for a few more days so I need to make a decision.

So its not just a question of need-versus wait. its a question of debt that is fair, and crazy-debt to go even more all-in. taking the loans feel more lucrative because im going to be more future proofed and I can get all the accessories and thunderbolt display at the same time.

but on the other hand, taking the inferior MBP15 retina now.. its a good deal, and it aint even refurbished.







TL;DR - Im a 25 year old man of ignorance, who hopes that someone with more financial wisdom and life experience could give me advice on what to do.

First of all, do you absolutely *need* a MBP, or is it more of just a want? I'm not trying to sound rude here, but you have to weigh your needs vs. wants if you're looking at taking on this kind of financial "damage".

You likely don't need the retina, and will still be able to satisfy your computing/processing needs with a 15" MBP, which can trim quite a lot off of your estimates.

Another thing to keep in mind is that you have 1 year to buy AppleCare, so delaying that as long as possible might help to "absorb" some of the impact. You can also buy it from 3rd-party vendors such as Amazon.

Lastly, you could always get a comparable Thunderbolt display for a fraction of the price. If you must go with it, at least get a refurb one (approx. $150 cheaper).

But in all honesty, if you just get a normal 15" MBP and not the rMBP, a cheaper, non-Mac monitor, and delay your AppleCare (and purchase it 3rd party when you do decide to buy), you could save quite a *LOT* off of your initial estimate.

EDIT: After reading some of your other posts (all the above that I just said still applies), but you can upgrade from 8GB to 16GB in the 15" normal MBP model for roughly $80. That's much cheaper than paying the couple hundred to Apple for the pre-installed 16GB on a rMBP (which must be done to max out RAM on a rMBP as everything is soldered in; what you get is what you get; no upgrades down the road).

Also, after reading that you're just a "normal" computer user (i.e. documents, etc.), a 13" MBP will be *more* than enough. You can easily buy a refurb one for around $1k.

Refurb 13" ($1k) + regular, non-Mac/Thunderbolt PC monitor ($100-$500) + AppleCare = roughly $1.5k. Now that sounds a hell of a lot better than taking out a $5K loan. Even if you decide to buy a refurb 15" you could still probably get everything for around $2k, or less.

I hope this helps

 

[ybz90]

Cash is king my friend debt is dumb. never I mean NEVER would going into debt be the best idea when there are options of much cheaper computers out there, it's thought processes like yours that keep people in debt. You know how to stay out of debt DON'T GET IN IT! Google Dave Ramsey and listen to a few episodes of his. And sure it's ok to splurge now and then when you have the cash but stupid to splurge on your credit!

Again, not necessarily. It really depends on a utility analysis and if you're smart about how you plan for it. I spent a lot in college, somewhere around 30-35k in personal expenses over the course of four years, but I structured it very well in ways that I had to pay little to no interest, and now, less than 8 months out of undergrad, well, let's just say I have zero debt (including school loans) and a very healthy deposit in the bank. Granted, I also worked my butt off during college to pay for things, but that's something I factored into my own planning.

To say that one should never go into debt is very narrow-minded, especially if there is much to be gained from doing so. You just have to weigh the pros with the amortized cons over time (and be realistic about your means). Again, you shouldn't go into massive or unreasonable debt, but it can be worth it to spend depending on your situation.

I'll trust my professors at MIT Sloan over this Dave Ramsey fellow. His advice seems more geared to how best to manage your financials in a manner that serves a broad audience who may or may not have a good sense of fiscal management. His is not bad advice, but it's kind of the least common denominator, and a savvy individual can get ahead easily by being smart. Spending smart does not have always to be the same as spending frugally.

EDIT: I'll also note, I did not tell and am not telling the OP to splurge, which is how some may be interpreting my post. In fact, I agreed with Arnezie, except I wanted to note that debt can be structured intelligently if you so choose. I also just wanted to point out that you may wish to consider the what course of action will maximize your utility, an economic term for happiness, but it's something you should analyze and think long and hard about. It's not always black and white and easy to say, buy the cheapest thing, because the cheapest option may not be the best for your needs and can reduce your utility (example: bought a netbook to save money, was a source of constant frustration for a few months, and then ultimately lost money on it). If having some more cash and no debt maximizes your utility, and often it does, then that's the way to go. But there are many student loans, even for personal expenses, that don't carry any interest until after you graduate (check for instance, with your university's credit union). Just something to think about.

 

[hkim1983]

Newishmacguy sounds like an accountant, and since I tutor accounting, I agree with what he's saying.

That being said, luffytubby, I've been in your position before, and I know the desire is strong and sometimes overwhelming. The rMBP is a nice machine, I do not deny this, but unless you can comfortably buy it out of your own pocket, it's probably not the machine for you at this point.

If you do "serious" work in photoshop and you play games that are quite demanding (at high settings), but you still want a decent computer that can actually handle this, looking into a 15" cMBP from 2011 might not be a bad idea. The computer is still fast, it can handle most games today, you have some additional desktop space, and you have expandability options to make your computer last as long as possible. Will it last 6 years? Well, honestly, I don't think any computer can really last that long without serious diminishing returns, but you'll probably be pretty happy for 3-4 years, and if you really had to, you could probably stretch it to 5-6 with lesser demands.

You could use the money you saved on buying an external monitor too if you need the additional space for photoshop. The good thing about this is that you can buy this in waves rather than all at once, so it's a lot easier to do for someone who is cash strapped. I try to adhere to minimization myself (I'm looking into a retina to avoid buying an external monitor), but if I can't buy it, I can't buy it.

 

[locoboi187]

To be honest, you can do all computer tasks for a $500 computer in college, even with engineering apps.

 

[Mrbobb]

Apple has (many other outlets have similar) a pay-off in 12 months no interest. That's what I would do. If I can't do that then I set my sight lower.

If I am in school, I wouldn't have NO time to play with toys, so that nice rMBP maybe just be sitting all day not doing a whole lot other than make your roommates envious.


p.s.: I drive a Civic. I see my coworkers who are making the same as I do with a brand new Mercedes, am thinking, "Boy, am glad I don't have HIS debt!"

 

[SuperSnake2012]

To be honest, you'd be better off just buying a cheap PC instead of putting yourself in debt, ruining your credit, etc. People overrate the power needed for a computer in college. I don't know what you'll be studying, but you most likely will not need to run anything more intensive than Microsoft Office. A cheap $400 PC could do this. Remember, these things are not investments. They lose their value; by the time you graduate, your setup that you spent $5000 on is worth almost nothing.

I love my rMBP, but I would not take out a loan and risk financial hardships for one. Absolutely not.

 

[brentsg]

You don't want to take on a large amount of debt at a crazy interest rate. That computer will be gone or obsolete and you'll still owe thousands on it. That's nuts..

 

[robvas]

To be honest, you can do all computer tasks for a $500 computer in college, even with engineering apps.

Plus there will be labs for any heavy lifting.

I love hearing people say 'they need an i7 and 16GB of RAM because they are going to school for computers'

You don't need a ton of power to run SPIM and learn C++!

 

[duervo]

Taking out a loan at 25-20% interest while a student is not a good idea. In fact, I would also say that any institution that is going to offer such a loan to a student is one that uses predatory lending practices, and people should stay far, far away from them.

If I were you, I would skip the 25-30% loan, read up on predatory lending (which is a huge reason why the housing bubble burst several years ago, and contributed to the US economy's downward spiral,) and then get the cheaper one at 1%.

 

[tillsbury]

Don't whatever you do ever borrow money at 25%. For anything other than perhaps life-saving surgery for your kids...

Get a recently second-hand MBP from some other schmuck who mortgaged his soul to buy a new rMBP. Remember that a 2009 MBP was more than enough to get the most recent graduates through university without a hitch. There is nothing you'll have to do that requires such a high-end machine. If you happen to be studying video editing you'll be doing it on the university's kit anyway.

Then, when you graduate without debt, you can earn enough to buy the latest rMBP outright, which is the only way...

 

[LS3 Machine]

Debt

Do everything you can to avoid debt in your life. Get a 500 laptop. Debt will never help you in any way in your life, and will PREVENT you from success. Trust me, I learned "the hard way". Please take the advise of those here that have lived and seen what works. I know, I like new shiney things too, but don't use school as an excuse to get into debt for a computer. It pure ******** my friend. Good luck, and keep us posted.

 

[Benbikeman]

+1 to all the advice not to get in debt for a computer. Just buy what you can afford, a secondhand Windows laptop will do the job. Buy a Mac when you can afford to buy one without borrowing.