Making $100K a year isnt anything special especially when you ower 5K on a 9 year old car

[BlvdBrawler]

Tell me how? The scenario was that we both started with $7000 dollars. I used mine to pay cash for a car. You invested your $7000 no additional investment earning. You then financed the same $7000 car I paid for with a car not of $132 per month for 5 years. For 5 years while you pay your car payment, I invest $132 per month instead. In your post you said that your investment balance at the end of 5 years would be $8,933.97. You then said that my monthly investment would yield $9190.23. $9190.23 - $8933.97 gives you a total of $256.26.

The bottom line for me is that you're putting less money per month into investments when you're making monthly debt payments at the same time.

Yes, you'd have $256.00 more but you would have had to spend more to get there.

I spent $7000 (the initial sunk cost of my investment) plus $7926.00 (for the car) for a total of $14,926.00.
You spent $7926 (the sum of all your investment contributions) plus $8933.97 (the future value of the $7000 sunk cost to buy the car) for a total of $16,859.97.

...at least, I think so... To be honest, I got a C in ECON in college... (If we're being really real, I got a C in everything...)

But, regardless, this is only even close because we're using 5% all around for simplicity. If we used today's interest rates with today's expected yield on investment, it wouldn't even be close.

 

[beenz]

I didn't think any of the big banks still allowed people to finance cars older than 3-4 years without getting a high interest rate.

I just checked my credit union's auto loan rates now, and it looks like you can finance a 9 year old car. obviously the rate will be higher.

 

[Rawtid]

Yes, you'd have $256.00 more but you would have had to spend more to get there.

I spent $7000 (the initial sunk cost of my investment) plus $7926.00 (for the car) for a total of $14,926.00.
You spent $7926 (the sum of all your investment contributions) plus $8933.97 (the future value of the $7000 sunk cost to buy the car) for a total of $16,859.97.

...at least, I think so... To be honest, I got a C in ECON in college... (If we're being really real, I got a C in everything...)

But, regardless, this is only even close because we're using 5% all around for simplicity. If we used today's interest rates with today's expected yield on investment, it wouldn't even be close.

Why are you trying to convince me that borrowing money is an opportunity? "opportunity costs"... that's so backwards, it seems like a trick. I'm doing you a solid by allowing you to borrow money at interest just so you can save 5 years from now.

 

[BlvdBrawler]

Why are you trying to convince me that borrowing money is an opportunity? "opportunity costs"... that's so backwards, it seems like a trick. I'm doing you a solid by allowing you to borrow money at interest just so you can save 5 years from now.

Goddamn you're up early .

Borrowing money is absolutely an opportunity, especially when it's so cheap. I agree a lot of that finance and econ shyt seems like a trick, but the math always adds up. That's why Einstein is quoted as saying:

“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”

It defies common sense, but it works.

 

[Rawtid]

Goddamn you're up early .

Borrowing money is absolutely an opportunity, especially when it's so cheap. I agree a lot of that finance and econ shyt seems like a trick, but the math always adds up. That's why Einstein is quoted as saying:



It defies common sense, but it works.

I get up at 4:15am. and I understand compound interest but I also realize it's a better concept when you're saving money vs when you're borrowing it.

 

[BlvdBrawler]

I get up at 4:15am. and I understand compound interest but I also realize it's a better concept when you're saving money vs when you're borrowing it.

That's so fukking early... How do you do that in the winter?

I'd be lying if I said I fully understand all these concepts, but I do know these are the methods used by rich people to get rich so that's kind of what I've tried to emulate and it's worked out pretty good thus far (I'm not rich tho ).

Maybe one of the econ heads can chime in and explain it better than I have.

 

[Rawtid]

That's so fukking early... How do you do that in the winter?

I'd be lying if I said I fully understand all these concepts, but I do know these are the methods used by rich people to get rich so that's kind of what I've tried to emulate and it's worked out pretty good thus far (I'm not rich tho ).

Maybe one of the econ heads can chime in and explain it better than I have.

I only get up that early to go to the gym or walk around my neighborhood (only when it's warm though) so I'm not outside for long. I did try taking a walk when it was like 20 degrees out once and I never did that shyt again.

 

[HookersandIceCream]

Both of you

 

[Remote]

5 grand in debt while making 100 grand is a simple problem to resolve.
Other things are at play here, it seems. I didn't read all the other posts, though.