Quote:
Originally Posted by Run Silent
LOL. Well, actually, that isn't finance 101. Finance 101 would have taught you that you have to factor in a Rp in that equation, typically negating the gains you earned that were offset by the interest on the house and cars.
But hey, what do I know right? Certainly wouldn't have anything to do with my profession or anything?
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Actually I did NPV on a loan verses investing including the tax deduction for mortgage interest. I can take $40K to pay cash for a car or with a right investment I can easily turn 30% or 40% in a year, while paying 2.9% or 3.9% on a car loan for 3 or 4 years. Yes I know not all investment turn a positive, but overall I am far ahead of any interest I have every paid by putting the capital into the market over time verses tying it up in fix asset.
Even if all you did was match the market at an average of 11% YoY growth over the long range, that is better return than not paying 3% or 4% on a mortgage interest.
Yes its a different story if you can pay cash for everything and still have money left over every month to put it into the market.