Quote:
Originally Posted by hi_officer
Exactly, my head hurts every time someone recommends fully paying off or putting a very large down payments on a car when you can finance them for <2%.
It’s very simple, instead of paying off a depreciating asset, put that money in a 401k, 529, ETF, Personal IRA, etc (it’s very simple to set any of these up with little cost) and then take the monthly car payment. Very easy to make 5% on your money while only paying 2% on your car.
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Whenever I see this advice given, I wonder how many actually invest the money. I would bet less than half. For the average person, it's an excuse to have a car payment, whilst the money they would have used for a large down payment disappears on frivolous shit.
Sometimes personal finance goes beyond math. For a country with such poor financial health, simplicity is crucial. That means getting and staying out of debt.