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Too simple
Posted by nwas (more from nwas) on Sun, 14 Aug 2011 15:07:26
In Reply to: this is simple.., AlS, Sun, 14 Aug 2011 14:20:17
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Your view is much too simplisitic.
First, let's says you plan to buy a car for $20K. If you pay cash, that cash is no longer invested for you anywhere else. Therefore, paying cash for that car costs you whatever return you can earn. Depending on your investment ability that could be 10%/year. If you take a loan at 4% instead, and make 10%, you just profited 6%. Note that I'm leaving out tax discussions.
A car is ALWAYS a depreciating investment unless it's a specific model purchased for investment value, so whether you use your cash or take a loan, you are ALWAYS working against the reverse leverage on your money. The rules above still apply,
posted by 71.174.89...
Posts in this Thread:
- Financing a vehicle argument?, Philip Schall, Sat, 13 Aug 2011 18:16:35
- this is simple.., AlS, Sun, 14 Aug 2011 14:20:17
- Too simple, nwas, Sun, 14 Aug 2011 15:07:26 <-- Viewing This Message
- Your results may vary, No Snaab, Sun, 14 Aug 2011 07:49:18
- Some this is cash flow, Noel, Sun, 14 Aug 2011 07:16:38
- Credit became too plentiful and easy, BlueWhite, Sun, 14 Aug 2011 06:47:46
- Re: Financing a vehicle argument?, Dan-O, Sun, 14 Aug 2011 05:50:38
- I'm in agreement with you, Joeychess, Sun, 14 Aug 2011 02:50:31
- Cash is King, smt, Sat, 13 Aug 2011 22:22:07
- "Car payments are never a good idea" - Disagree, nwas, Sun, 14 Aug 2011 10:22:44
- Re: "Car payments are never a good idea" - Disagree, Justin VanAbrahams
, Sun, 14 Aug 2011 10:51:09- My "Rich" Dad who quit school at 16..., Steve T., Sun, 14 Aug 2011 17:55:24
- Re: My "Rich" Dad who quit school at 16..., TML
, Wed, 17 Aug 2011 17:30:20 - Re: My "Rich" Dad who quit school at 16..., rico567, Tue, 16 Aug 2011 18:56:11
- That was a great story, thanks. NM, AeroBaron, Mon, 15 Aug 2011 13:12:44
- Re: Financing a vehicle argument?, George K, Sat, 13 Aug 2011 21:21:12
- I financed..., SRS900S, Sat, 13 Aug 2011 19:58:54
- Re: Financing a vehicle argument?, JerseySaab
, Sat, 13 Aug 2011 18:29:55
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