FINALLY WOW Hope thats over

 

so you guys wanna go for a weekend ride, hotels,dinners,, every weekend,June ,July+,August??
Can't??
why not???
ohh thats right,,,, your makin BIKE PAYMENTS!!!

 

glad your not my banker.....you guys are ALL crooks

 

Well I use a very good firm that has been around for over 45 years, and if there is any issues, They take care of it... Tax man, I am not...

 

And you base this on what?

 

[quote]ORIGINAL: swestbrook60

Nothing personal here either, but this is a good illustration of why the rich get richer and the poor get poorer. A basic lack of financial education, which our public schools do not provide by the way. It makes absolutely no difference what the loan is for, if you can invest the money at a higher interest rate than you are paying for the loan, you end up with more money by financing and keeping yourmoney.

Let's say it was a house that cost $100,000, and you had $100,000 in cash. Do you finance with a 7% mortage and leave your money in an investment account earing 10%, or do you pay cash for the hosue...which is best?

If I pay cash for the house, it costs me $100,000 and I have a house and no cash in my hand. Simple.

If I mortage the house at 7%, the principle and interest payments will be $665.30/month for 30 years. That comes to a total amount I will pay the mortgage company of $665.30 x 12 x 30 = $239,508.

Yes, it costs me an additional $139,508 of interest to finance the house. However where is my $100,000 in cash that I had..it is still in that investment account since I did not use it to buy the house.

Now since I am geting 10% on my $100k for this same 30 years, there is now $537,997.65 in my investment account. So while I was paying an extra $139,508 for the house, at the same time since I did not spend my $100k so I have made $437,997 in interest with my money. Doing it this way, at the end I have not only a house, but I also have $538k in my bank.

Now you might say, but this way I had to make those payments of $665.30 each month, that's why I have money. Not true.

When I bought the house for $100,000 I could have told my investment company, to automatically make those payments for me each month out of the $100,000 I already have. What would the result be then? Well since my money is invested at 10% and the house is financed at 7%, my money is growing faster than the mortage company's money is. By plugging this into a financial calculator, I see that at the end of 30 years, my house is paid for and I would still have $133,096 in my investment account. So essentially I got a free house and $33k extra on top of it.

Some here have said, but you are in debt when you do it this way. Also not true..actually debt is your net worth, not whether or not you have a loan. If you had kept your initial $100,000 then at any time you chose you could pay off the balance on your house. Your only in debt if you finance the house and spend the cash on something else.

The purpose of the loan doesn't matter, just the scale of the numbers change. If you had the cash for your bike and you didn't finance the bike (assuming you could invest at a higher interest rate than you could finance the bike at) then you literally threw money away.

Using the thread example of a $24,000 bike financed at 1.9% interest, and investment rate of 5.5%...
If you invested the $24,000 and financed the bike and paid the payments out of your investment account (the $24,000 you had) each month, at the end of 5 years your bike would be paid for and you would still have $2,682.60 in your investment account. If you paid cash for the bike then you have no

 

Confuscius also say:
"Man who walk through Airport turnstile sideways......going to Bangkock"

Nobody is SLAMMING the guy about making payments, they are Slamming him because he is whining about the very policies that he works with and initiates as an OWL (branch manager a.k.a. theYES man)Those terms were clearly spelled out prior to closing the deal. He Knows the game.Now he's snivelin about it and nobodies buying it.
It ain't helping none that he is arrogant about how much money he makes "all over the place"
And the personal background overview was a little much. He got flamed and he deserved it.

8 bucks for the hat but I belive I'm paying too much

 

[sm=usa.gif]I surrender!!! [sm=icon_beat.gif]

 

I'd like to see a picture of the hat before I bid on it. But I'm afraid it might be too big for me anyway

 

So you saying its better to spend your nest egg right off the bat to get that bike, boat, RV or whatever instead of using it to its full potential? By keeping the money you would have spent in the purchase, you pay off the debt if anything happens such as bad economy, loss of job, etc. Having your debt paid off, you can then sell the bike for whatever the market value is for it. Even if this happens halfway through the loan, your still ahead of the game financially from where you would be having paid cash for the bike in the beginning.

If that money is considered your nest egg or you are worried about your financial future, perhaps you should not be buying a bike to start with.