I do see the point in putting that money to work for you and going the loan route. Of course. Heck, more money in your pocket is never a bad thing in America. I just prefer not to owe anything to anybody.
You're absolutely free to manage your money however you see fit. That's the one point of money, it allows the freedom to live the way you want to.
In retirement, if investments start to go South, cashing it all out may have pretty nasty financial consequences if indeed you get pushed into higher brackets. And in retirement, as if Uncle Sam so hopelessly addicted to our money were not awful enough, his Big Sister Medicare joins in with income brackets of her own, which can result in pretty hefty and higher Medicare required premiums at least for one year.
As the saying goes, money may not buy you happiness, but it sure as hell can finance a pretty awesome illusion thereof.
We are opening up a huge bag of worms here, but this is where diversification matters. Ideally, you don't have all your eggs in one basket, so to speak. A little in stable dividend stocks, a little in mutual funds, some in stocks, some in metals or real estate. A good financial planner should give you a fair growth profile while minimizing risk. It's also important to remember that risk is usually worse when viewed in a short term and reward is usually better when viewed in the long term.
I saying I heard is money cannot buy happiness, but it's more comfortable to cry in a Mercedes than a jalopy.
There is a cost of the debt free feeling, most likely less money overall and that's ok. That' s your choice and many others (especially the people who follow Dave Ramsey). I will never pay more mortgage early since it's at 2.75% over 30 years. Almost free money compared to the interest rates these days. I do like when Dave Ramsey asks callers when they question paying off their mortgage vs. investing, if they would take out a loan at 3% to invest in the stock market. Hell yeah I would do that, especially if the loan is fixed over 30 years.
Hmm... Is it reasonable to look at your example at 5 years and not 10. In that way both choices are equally evaluated and on the same footing financially at the end of your loan. We both own the vehicle outright. However, I have saved $13,227 in interest, like you I invested that for 5 years at a 10% return giving me $21,302. You have invested $100,000 for the 5 years with a 10% return giving you $47,824. The difference between the 2 is $26,522 over 5 years. Still an advantage over buying outright but not the $146,147 over 10 years you calculated. Also, your return of 10% over 5 years could be considered a bit aggressive given variability and risk over the shorter term. I would look at a 5-8% return over a 5-year horizon thus further compressing the difference. Just a different perspective
You have a fair argument. I used 10 years to make the difference easier to see. Personally when I invest I consider that money gone until retirement so the 10 year difference still holds. Even if I buy two cars within that timeframe finance wise I’m at 26k interest over my 156k.
OOOPPS Apologies. Disregard my math...my inputs were calculated in error. My $ gain on $13,227 at 10% return of 5 years is ~$8075. Your $ gain on $100,000 investment returning 10% over 5 years is a little over $61,000. A difference of almost $53,000 in your favor. I do stand by my time horizon of evaluating the comparison of the holding period of 5 years not 10 years and backing off a bit on the expected return on the investment of between 5-8%
Have you calculated the actual cost of even a low interest mortgage over, say 30 years?
Yep have calculated it many times and investing the money always comes out on top by a significant margin. So even though I could pay off my house I choose not to since I will end up with more money in the long run.
Hi there- can you offer what manuf dates have cast sub frame? I’m looking at Gen1 T now… post 5/23
