[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

Re: <OT> Re: Financial question (interest accumulation)

:Stephen Lafredo wrote:
:> :I disagree with you that paying interest on a car is not a good and 
:> :sound financial decision. If you have the cash to spend on
:> :purchasing a car, shouldn't you keep that cash and finance the car
:> :as long as the car loan has an interest rate LOWER than your return
:> :on investment.
:> :blah, blah -- cut
:> :
:> :...which has been averaging ~20%, PROBABLY WILL NOT continue...

On 8/6/98 at 3:50 PM, [email protected] (Brian M Kennedy) wrote:

:Careful!!  Three words:  taxes, fees, and risk.
: blah, blah -- cut

:Disclaimer:  Never take investment advice off a newsgroup -- consult a 
:professional (which I am not).

On 8/6/98 at 2:40 PM, [email protected] (David Chen) wrote:

:Now that the market has dropped 15%, I don't hear anybody touting 20% 
:gains anymore.
:
:So in a bear market, is it still cheaper to finance a car at 10% or to 
:let the funds sit in the bank and lose 15%, for a net financing cost of
:25%
:blah, blah

Brain and David are absolutely right!

I too am NOT an investment advisor and yes we have had VERY good returns
in the past couple of years and yes my scenario was VERY simplified in
that it did not take into account tax, fees and risk. For this I am
sorry. I hate when people post quick snips without laying out all or at
least trying to cover most aspects of the topic discussed.

Though, just to clarify tax, we got to pay, so subtract them from your %
returns. Fees, do not exist (are very low, < 0.5% or so) in my
situation, you (of your advisor) really should check out some of 
Vanguards funds, but yes subtract the fees too. Me personally, I
generally do not invest in loaded funds or funds with 12b fees or fees >
1% or so. Risk, *should* go without saying it is the stock market and
you do assume SOME level of risk. I sort of hit on this very slightly in
the statement "PROBABLY WILL NOT continue..." but did not clarify it as
well as Brian and David.

Thanks for keeping me honest!
- --------------------------------oOo--------------------------------   
 Stephen Lafredo - 3.2 M3             email: [email protected]

 Delaware Valley Chapter
 New Jersey Chapter
 National Capital Chapter

------------------------------