You own it or what?
05-09-10, 10:30 AM
#31
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05-09-10, 09:26 PM
#33
I disagree, i think paying cash for a depreciating asset is the worst thing you could do.
There is no sensible way to buy a "depreciating asset", but the best in my opinion would be to:
1) Lease, (set amount of interest, not compounding like a finance, plus your only paying for the deprecation this way, not paying the full sales tax upfront either, dont make extra payments because in 2,3,4 years you end up in the same place no matter what)
2) Finance, (cash is KING, the more liquid you are, the more freedom you have to make money on your money, although with a finance your paying mostly interest up front, so you would want to make bigger payments as to cut down the interest over the term)
3) last would be to pay cash, (the car is going down in value no matter what, so may as well keep your cash and make your payments out of your cash, so you can be earning money on your money sitting in the bank at least)
With the first 2, yes you increase your liability, however, your making money on your money, and could use that interest you made, or money you made from investing to pay for a portion of the car payments.
Just look at houses,
if you knew upfront the house would eventually be worth nothing, why would you want to own it? you wouldn't, you would rent it, or LEASE it, letting someone else take the loss.
There is no sensible way to buy a "depreciating asset", but the best in my opinion would be to:
1) Lease, (set amount of interest, not compounding like a finance, plus your only paying for the deprecation this way, not paying the full sales tax upfront either, dont make extra payments because in 2,3,4 years you end up in the same place no matter what)
2) Finance, (cash is KING, the more liquid you are, the more freedom you have to make money on your money, although with a finance your paying mostly interest up front, so you would want to make bigger payments as to cut down the interest over the term)
3) last would be to pay cash, (the car is going down in value no matter what, so may as well keep your cash and make your payments out of your cash, so you can be earning money on your money sitting in the bank at least)
With the first 2, yes you increase your liability, however, your making money on your money, and could use that interest you made, or money you made from investing to pay for a portion of the car payments.
Just look at houses,
if you knew upfront the house would eventually be worth nothing, why would you want to own it? you wouldn't, you would rent it, or LEASE it, letting someone else take the loss.
05-11-10, 06:55 PM
#34
Tech Info Resource
iTrader: (2)
December to Remember '08. 1.9%. Why tie up all the cash in a depreciating asset, especially when the currency's purchasing power is plummeting, and it's only going to get worse?
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