Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Thank you!!! Glad to know there are still some folks out there that see the bigger picture. Why anyone would even entertain the idea of living with debt is beyond me.
So you'd rather lose money buy dumping a nice chunk of it into a depreciating asset rather than letting the bank pay for it for you for you in advance at 0% interest while using that money that you have to invest into something that gives you a return. We get it. Dumb advice.
Debt is only debt if you dont have the means to pay it off at a moments notice.
Last edited by louie0406; 08-24-2015 at 02:07 PM..
I have been using other peoples money most of my life and it has worked well for me. I will incur debt if it's financially to my advantage. I have purchased trucks costing $90K, financed them thru my CU with a secured loan a CD. The CU charged me only 2% interest, at that time the average interest was 9% to 11% and I only payed the interest. I would use and depreciated the vehicle and later sell it. I leveraged real state, even the CC company’s pay me from $300 to $500 annually just to use their cards.
I don't encourage anyone to take on debt, however smart debt is good. The OP must remember, just because he has the extra money sitting in his account, it is for extreme emergencies only.
So advocating complete freedom from debt makes one financially illiterate now. Got it
Learn something new everyday
You aren't thinking about it logically. You are afraid of debt, period. Majority of rich people are rich because they took on some form of debt and knew how to leverage it to make the money work for them. If someone offered you $30,000 right now and you didn't need to give it back to them for 60 months and they wouldn't ask for a penny more you are an absolute fool if you don't take it.
Lets say I bought a car 5 years ago for 0% interest. I took my $30k and invested it to follow the S&P500
You on the other hand because you have an irrational fear of debt decided to just hand a dealer $30k.
Now we both paid exactly the same amount of money. I paid $30k over 5 years and you paid $30k up front. The only different is my $30,000 just made me an additional $25,000!!!
In fact, the inflation rate would have saved me $2,800 over the 5 year period. So really by paying upfront you're paying interest in the amount of the inflation rate.
This is how leverage and free or cheap money can be your best friend. Yes debt is bad.. but free money is NEVER bad. Get over your fear of owing someone something, it can ironically make you much more money.
Well, for next time, keep in mind 0% is not actually been 0%, there's always a cash equivalent.
When I bought a new Nissan a few years ago, I took cash off the car instead of 0% (forgot how much, but significant - $3k or $4k) financed through Nissan at 3.79% to take another rebate for financing with them, then promptly paid off the car with a credit union rate of 1.99%.
Not always the case....Ford is offering 0% now for 72 months AND $1,000 rebate!
The problem is that that idea is wrong. Taking on some debt doesn't preclude building real wealth. I AM in fact a millionaire, and sensible use of debt is precisely what got me there.
The OP isn't playing some crazy debt game here. He's paying EXACTLY the same amount of money for his car that he'd have paid had he bought it in cash. The difference is that in this case, he'll also earn hundreds (if not thousands) of extra dollars in interest.
I ask you again: why are advising the OP to pass up a significant amount of free money?
Aredhel is from Omaha, Nebraska.
Warren Buffett (Billionaire) is from Omaha, Nebraska.....
Honey, pack the car, we are moving to Omaha to be millionaires!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
