Who's letting investments pay for their truck??

[Raptor302]

Any debt has risks associated with it. I’ve met a lot of wealthy people and I have never had one say they borrowed their way to wealth.

 

[Raptorbegone]

Exactly! Everyone is an investment genius nowadays with many laughing at the people paying cash instead of taking out a low interest loan and investing until the bottom drops out of the market. Then, you catch a bunch of people with their pants down trying to dump their rapidly depreciating assets when they realize they can no longer afford it.

I sleep better at night with minimal debt knowing irrespective of the way my pre-tax and after-tax investments go, I won't have to unload paid for vehicles at inopportune times due to cash flow constraints.

I can dig the sleep better at night point of view. Being 100% debt free is a great feeling no doubt. Yet among those people that reach being 100% debt free, I bet their next thoughts, after great nights sleep, is how can they do it better?

They got to being 100% debt free. Now what? I doubt stacking cash in a savings account is the answer.

And I also think that part of the overall picture and "not getting caught with your pants down" is once again diversity.

Diversity in investing=not having all of your assets in one thing. Spread out over real estate, cash for emergencies, various areas of the stock market, crypto etc.

Diversity=not just the name of an old old wooden ship


Talking point

yes some things are worth paying off asap. Namely high interest loans and credit cards

 

[melvimbe]

Exactly! Everyone is an investment genius nowadays with many laughing at the people paying cash instead of taking out a low interest loan and investing until the bottom drops out of the market. Then, you catch a bunch of people with their pants down trying to dump their rapidly depreciating assets when they realize they can no longer afford it.

I sleep better at night with minimal debt knowing irrespective of the way my pre-tax and after-tax investments go, I won't have to unload paid for vehicles at inopportune times due to cash flow constraints.

You can have enough savings to last you a few months without income to meet monthly payments and have some money invested. It's not an either or situation.

 

[Raptorbegone]

The rule of 72. look it up

At an expected 10% rate of return an investment will double in 7.2 years.

so the next time you got the cash to pay for a raptor in full. You might think twice when the S&P500 has a very likely chance to double that money during the time the loan would have been.

Is it worth that "peace of mind" you have from a paid off vehicle from day one? hell your choice

 

[Raptorbegone]

You can have enough savings to last you a few months without income to meet monthly payments and have some money invested. It's not an either or situation.

having savings to last through any emergency isn't even smart investing. it's called common sense.

But you bring up a good point. It doesn't have to be a 100% or nothing proposition. Go with whatever combo you want. But for the love of god be investing in something that is giving you a return.

 

[Littlefx4]

yes some things are worth paying off asap. Namely high interest loans and credit cards

Agree but…high interest is measured differently by some. What’s your guesstimate of high interest?

 

[Raptorbegone]

Agree but…high interest is measured differently by some. What’s your guesstimate of high interest?

I think the biggest no brainer today is credit cards. Pay them off every month before any interest is charged.

I suppose I'd say if it is 7% or more it is high interest

 

[Raptorbegone]

Example my bank does a 61-72 month new car loan for 2.29%

hell yes

Played well why pay that off early? why pay a single bit more than I have to during that 6 years?

If I am sitting on the money to pay that off from day 1 why would I? I can nearly double it conservatively investing. And if the market decides to start taking a dump, the option is always there to pull that money out and pay it off at any time if I so choose.

options are nice

 

[Shane361]

Example my bank does a 61-72 month new car loan for 2.29%

hell yes

Played well why pay that off early? why pay a single bit more than I have to during that 6 years?

If I am sitting on the money to pay that off from day 1 why would I? I can nearly double it conservatively investing. And if the market decides to start taking a dump, the option is always there to pull that money out and pay it off at any time if I so choose.

options are nice

That's almost a $1500 monthly Truck payment. Might be a smarter move than putting money down but I'll keep my $600 a month payment and put money down. I'm not doubting you would come out ahead on the end but that's steep for some of us.

 

[Raptorbegone]

That's almost a $1500 monthly Truck payment. Might be a smarter move than putting money down but I'll keep my $600 a month payment and put money down. I'm not doubting you would come out ahead on the end but that's steep for some of us.

my friend, sounds like you are overextended to begin with.

investing makes things too expensive.

But you are buying an 85k truck?

wow, I can't comprehend the logic there. not calling you stupid, but take a step back and rethink what you are doing.

you can't afford to invest. the real question that should be asking is how can you afford not to?