Timeline for Take out a small loan or use money from bank
Current License: CC BY-SA 3.0
13 events
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| Oct 23, 2017 at 21:57 | comment | added | D Stanley | @Devyn Again, you're ignoring risk. You could just as easily lose 5% as gain 10%, depending on the risk of your investments. You might come out ahead, but it's not guaranteed. You are guaranteed to pay 2.7% on your loan. That's the difference. You may not go broke, but you're not for certain going to come out ahead. If you can tolerate that risk then go for it, but I would not call it "wise". | |
| Oct 23, 2017 at 21:19 | comment | added | D E | @DStanley But the 3-5% would be per year, and for two years (obviously I'd invest for longer and not pull out immediately) so my 3-5% would actually be a net gain of ~300-400 if I gained a total of 5% each year. After inflation, I'm basically even. My current investments are about 17% for the past three years, but I would invest in a much safer diversified option. | |
| Oct 23, 2017 at 20:03 | comment | added | D Stanley | OP is borrowing $25k to keep from paying it in cash. Then wanting to invest $10k to try and recoup the interest. In any case, no it's not smart to borrow 2.7% to maybe earn 3-5%. | |
| Oct 23, 2017 at 19:22 | comment | added | chili555 | "You're essentially borrowing money at 2.7% to keep it in your bank account." But that's not what he proposes. He says, "If I invest $10,000 into my stock account and invest in a safe mutual fund (3-5% per year), I will be able to recoup the $720 loss (and maybe make some) and not use my own money." He asked if it's smart to borrow at 2.7% in order to recoup 3-5%. | |
| Oct 23, 2017 at 19:13 | comment | added | D Stanley | @RonJohn No, but it was part of my point that there are other costs associated with borrowing against a car. If that's the biggest point of contention I can take it out. | |
| Oct 23, 2017 at 19:08 | comment | added | RonJohn | @DStanley "you can also increase the deductible and save a lot" of course, but that has nothing to do with the question. | |
| Oct 23, 2017 at 18:56 | comment | added | D E | My insurance is pretty fair and I have high deductibles. I don't plan on dropping full coverage for a few years at least. I can agree with your statement about borrowing money to keep it in my bank. I am young and I am unsure about the future, so I would rather have the peace of mind of having the money in the bank than not, but at the end of the day you are correct. Thank you | |
| Oct 23, 2017 at 18:42 | comment | added | D Stanley | @RonJohn On a $19k car, maybe, but you can also increase the deductible and save a lot. | |
| Oct 23, 2017 at 18:38 | comment | added | RonJohn | While what you say is true, it's insane not to have Comp/Collision on a $19K car whether or not it's paid off. | |
| Oct 23, 2017 at 18:30 | history | undeleted | D Stanley | ||
| Oct 23, 2017 at 18:26 | history | deleted | D Stanley | via Vote | |
| Oct 23, 2017 at 18:25 | history | edited | D Stanley | CC BY-SA 3.0 |
added 1 character in body
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| Oct 23, 2017 at 18:18 | history | answered | D Stanley | CC BY-SA 3.0 |