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Consumers use debt to make money as well. The YTD return on a broad market index fund like VTI is 7%, and it's only July. If a consumer has $25k to spend on a car at the beginning of the year and is offered 2% financing, the consumer would be better off financially by putting that $25k (minus the down payment) into VTI and financing the car, rather than paying cash up front.
Bingo. A lot of the older people who post here do not like risk and prefer to pay cash for everything. The younger people like myself, who have 30 years of working still, have no issues taking on debt for the risk of a 5-8% return.
You see this all the time. People bragging that they never finance and instead pay cash. So my question to them is what is your secret? Where do you find $25,000 sitting around to pluck down on a car?
The formula is pretty simple in theory. You bite the bullet and pay for a car in the shortest time possible by upping the payments. After it's paid for you put that payment in the bank and let it add up to the point where you have enough cash that along with your trade will buy a new car and ideally keep that going.
But like me with 5 kids and my wife didn't work until the youngest was in high school, that was tough. Plus I was paying private school tuition and saving for college tuition.
You see this all the time. People bragging that they never finance and instead pay cash. So my question to them is what is your secret? Where do you find $25,000 sitting around to pluck down on a car?
I always pay cash. I am not rich.
I know I want a new(er) car within the next two years. I am saving up for it since a while now. To keep motivated, I already research and look at cars. If I find the model I want, I print out a picture and hang it on my fridge. That gives me extra motivation to save more.
When I finally buy the car, I usually appreciate it much more as somebody who gets up one day and thinks "I want a new car today and the bank is going to pay for it".
I believe in saving up for the stuff you want and emergency funds. No paycheck is too small that you can put a tiny fraction of it aside.
Bingo. A lot of the older people who post here do not like risk and prefer to pay cash for everything. The younger people like myself, who have 30 years of working still, have no issues taking on debt for the risk of a 5-8% return.
I am not sure if I am understanding you correctly.
Are you saying that you are anticipating a 5-8% return on invested money?
If so, you need to improve your investing strategies.
According to my Quicken software, as of today's market close, my 12 month return is a bit over 15%, but it has been higher in the recent past.
Trust me...if I can do it, you can too...if you improve your investing strategies.
I am not sure if I am understanding you correctly.
Are you saying that you are anticipating a 5-8% return on invested money?
If so, you need to improve your investing strategies.
According to my Quicken software, as of today's market close, my 12 month return is a bit over 15%, but it has been higher in the recent past.
Trust me...if I can do it, you can too...if you improve your investing strategies.
So you think you're God's gift in stock picking at can anticipate double historical returns over the long haul because of your amazing abilities just make you so much better than it than a skyscraper full of quants with PhDs in physics and math from places like MIT doing computer-based trading that takes your incoming trade and in the few fractions of a second before it registers buys up the stock at a lower prices and sells it to you for a cent or two hire?
Of course, on the Internet everyone beats the market return handily, or so they'll tell you. In reality, there's a reason that a room full of people who are a lot smarter than you that work full-time doing what they do rely on computer-based trading to eek out a tiny edge. They know they're too stupid to consistently beat the market any other way.
So you think you're God's gift in stock picking at can anticipate double historical returns over the long haul because of your amazing abilities just make you so much better than it than a skyscraper full of quants with PhDs in physics and math from places like MIT doing computer-based trading that takes your incoming trade and in the few fractions of a second before it registers buys up the stock at a lower prices and sells it to you for a cent or two hire?
Of course, on the Internet everyone beats the market return handily, or so they'll tell you. In reality, there's a reason that a room full of people who are a lot smarter than you that work full-time doing what they do rely on computer-based trading to eek out a tiny edge. They know they're too stupid to consistently beat the market any other way.
It doesn't bother me in the slightest if you don't believe me, and--no--I don't think that I am God's Gift to anything.
I am just an ordinary person who had managed--partially from research, and partially from dumb luck--to beat the averages most of the time.
I know what my returns are, and while I don't always beat the major averages, I do manage to beat at least the Dow & the S&P 500 most of the time.
I have never been able to beat the Russell 2000, and I have not been able to beat the Nasdaq for quite some time.
If you would like a list of my investments and their returns, please send me a Direct Message, and I will be glad to supply the information for you.
Incidentally, the correct word in your next-to-last sentence is "eke", not "eek".
However, for me, the most intriguing issue is...
Why are you so obviously threatened by somebody who manages to do well with his investments?
And punctuation like commas go inside of quotation marks. I usually don't bother being anal retentive about grammar as I assume people are posting quickly and don't take the time to proof read their posts.
Interesting how you can never beat the Russell 2000 when the DOW, which you beat at least most of the time, fairly frequently does. For example, the DOW has beat the Russell 2000 YTD. And I'm not really that interested. You have worse returns YOY and YTD than the broad based ETF I invest in. I'm more amused than threatened. I don't anticipate returns of 20%+ YOY as it's absurdly high. It was a good run, but I don't anticipate it going forward. And it has nothing to do with my magical stockpicking abilities. VTI almost always underperforms the market, the past year, three years, and five years are no exception.
You know what that is? Love of money. You're so in love with money you want to save it and hoard it all for yourself, but refuse to actually USE any of it, for fear you might lose it. It's the uglier side of greed.
What are you going to use the millions for when you're too old to enjoy any of it?
A lot of my friends are older and most are car people that grew up during the Depression.
I've come to the conclusion that living through something like this changes you profoundly.
All, are frugal, some are even tight... it's not that they scam, cheat or ever pull a fast one... instead, they expect value and are very cautious... tend to look at the overall picture and then sleep on it for a week.
Remember one guy the always annualized everything... when cable was going into the neighborhood offering some NFL package with HBO, Showtime, etc for 49.95 per month which I guess was a deal... the first thing he told me is $600 a year to sit in front of the idiot box is a deal... who are they trying to kid...
The older I get the more adverse I am to debt... even to the point of tossing extra into the mortgage payment each month to retire the payment sooner.
Don't get me wrong... I lover cars and grew up around them... worked in a specialty shop all through high school and presently own 50 vehicles... none were financed and only one was bought new...
I've always paid cash for my cars. I just get paid a lot per hour and work a lot of hours.
One of my old girlfriends bought an Audi from commissions selling super expensive road bikes to yuppies.
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