What do you drive?

[WhiteElephants]

Originally posted by Asher

I don't see any investments that will guarantee me anything near the money I'd save by paying cash for a car, or avoiding a mortage, and I'd prefer the peace of mind of not having hundreds of payments ahead of me for the forseeable future.

There is no gaurantee out there, no or ever. The only gaurantee you choose to take was to gaurantee you'll lose money.

Your thinking about right now, not next year, or the next five years, or the next ten.

WE, the problem here is you assume everyone is stupid enough to play the stock market right now, or make some other worthwhile investments.

Stupid enough? There hasn't been a better time in 15 years. The only people who were stupid are the ones who hopped on the tech bubble just before it burst. You realize there are people out there who invested in the market in the 90's and are millionaires now, yes? The problem you guys have is that neither of you understand it and are therefore scared of it. There are hundreds of mutal funds buying and selling in the stock market everyday and you mean to tell me you have more foresight and knowledge than they do to not invest in the market right now. If you were correct don't you think those companies would just close up shop? You realize how rediculous you sound?

[WhiteElephants]

Originally posted by JohnT
Well, given that my net worth is well into the 6 figures, I really don't have any complaints on that score. But to say that I shouldn't have paid for a car in cash in the year 2001 because US Labs went up 46% on 8-9-2002 doesn't really make sense. Sure, the opportunity cost is/was high, but given that I am not prescient (nor do I have an ear on the Bureau Veritas BOD) this isn't a true assessment of how personal finance works for us non-day traders/stock professionals.

It's not that you shouldn't have it's that you sound like a idiot braging about it.

[WhiteElephants]

Originally posted by Asher

You're comparing buying a car with cash to loaning millions of dollars as a successful company?

I'm talking about interest rates you dunce, and your irrational fear of them.

You could be less rich, providing you invested wisely, but then again you could be much poorer since you were an idiot and invested thousands of dollars into Enron the day before the scandal began.

You're an idiot period if you're investing in the market to make a quick buck, or choose to not diversify your portfolio.

[JohnT]

Uh, please don't lump me in with Asher (at least when it comes to stock market philosophy) as I have been increasingly aggressive in my stock purchases over the past few weeks... buy low, sell high, yadda, yadda, yadda. We all have differing investment strategies and it is both my joy and my burden that my strategy is (obviously) less aggressive than yours. It was how I was taught... never finance what you can pay in cash. Given that the person who taught me that died with an 8-figure asset base (while never making more than $20k/year in salary his working life), I am quite comfortable with following his strategies.

Thanks for your concern, though!

[WhiteElephants]

Originally posted by JohnT
Uh, please don't lump me in with Asher (at least when it comes to stock market philosophy) as I have been increasingly aggressive in my stock purchases over the past few weeks... buy low, sell high, yadda, yadda, yadda. We all have differing investment strategies and it is both my joy and my burden that my strategy is (obviously) less aggressive than yours. It was how I was taught... never finance what you can pay in cash. Given that the person who taught me that died with an 8-figure asset base (while never making more than $20k/year in salary his working life), I am quite comfortable with following his strategies.

Thanks for your concern, though!

I'd hardly call my strategy aggressive, rather conservative. If you're buying and selling more that weekly you're treading dangerous waters.

So, it's beyond your ability to reason that the person who taught you to not finance what you can pay for in cash might have been wrong on that point? The Fortune 50 are all making terrible business decisions then?

[orange]

this (in 'evergreen frost')

[Asher]

Originally posted by WhiteElephants
I'm talking about interest rates you dunce, and your irrational fear of them.

Irrational? You're guaranteed to pay more. It's irrational to dislike a guarantee to pay more?

And we're at a period where the stock market crashes 3 days in a row, surges 1 day, crashes 3 days in a row, surges 1 day -- and it's the "best time to buy"?

No offense, but not everyone is out there to invest every penny they find in the street.

How much money have you lost in the past year in the market, WE?

Having a diverse portfolio doesn't mean much when the entire market has been down.

Like JohnT, I've also always been taught to never finance what you can pay for with cash -- and it's work out extremely well for the person who taught me that as well. And yes, he invests quite heavily in the stock market as well -- just not every single penny like you want to do. Many people think it's unwise to invest everything you can.

[JohnT]

Originally posted by WhiteElephants


I'd hardly call my strategy aggressive, rather conservative. If you're buying and selling more that weekly you're treading dangerous waters.

So, it's beyond your ability to reason that the person who taught you to not finance what you can pay for in cash might have been wrong on that point? The Fortune 50 are all making terrible business decisions then?

I know his track record. OTOH, IIRC, this is the first time we've ever "spoken." Honestly, WE, who's advice do you think I'm going to take?

[WhiteElephants]

Originally posted by Asher

How much money have you lost in the past year in the market, WE?

Again, with the poor mans logic. Last year is inconsequential to what I'll earn in the next 50. But if you must know a few hundred dollars, but considering this week and last I've porbably made up my losses and maybe even more so.

Here's a little story for you. When my father started investing in the market the DOW was at 700 points, today it's over 8700 and at its height it was over 11000. Over the course of his investing he has nearly doubled his money, now he lost money this year, last year, and the year before, but that hasn't stopped him from investing in the market because he isn't using poor man's logic.

[Asher]

Do you take into account that when you buy a car for cash upfront you have extra money for every month AFTER that to invest into the market, WE?

In fact, you will have MORE money overall to invest into the market since you're not pissing it away in interest.

[WhiteElephants]

Originally posted by JohnT

I know his track record. OTOH, IIRC, this is the first time we've ever "spoken." Honestly, WE, who's advice do you think I'm going to take?

Hey, my advice ain't worth hard dog turds, but you ought to consider the advice of every other accountant/CFO/business man out there.

[JohnT]

Hmmmm. Interestingly enough, our company's CFO advised a co-worker who received a nice inheritance to pay off their house. IIRC, his words were "It's the best investment you can make."

So, maybe not every.

Anyway, I'm bowing out of this discussion. Have fun yelling at Asher!

[Flubber]

what WE is talking about is the time value of money. In any investment decision it is always preferable to pay later if that is an option since 20,000 today is worth more than 20,000 five years from now. If you lease or finance you trade an immediate outflow for a much smaller periodic outflow. In purely " finance 101" terms the best decision would be determined by mathematics and would depend entirely on the discount rate.

If the discount rate ( the rate of return you rxpect to make on your capital) is higher than the interest paid on the lease/ loan, then it does make financial sense to borrow/lease. Since car loans and leases have had some very very low rates I think WE could be correct since there are opportunities to get a car loan for less than what a GIC will pay you


Oh and Asher and Sneak-- play nice

[WhiteElephants]

Originally posted by Asher
Do you take into account that when you buy a car for cash upfront you have extra money for every month AFTER that to invest into the market, WE?

In fact, you will have MORE money overall to invest into the market since you're not pissing it away in interest.

Do you take into account that your liquidity is serious damaged and that your 300 dollar investment could have turned over a 3000 dollar profit had you invested more now and not five years from now. Granted you need to look to the future and consistently invest, but waiting around buying 5 shares at a time isn't what I'd call serious investing. You have to also consider that if I invest now I may very well make profits every month that in the long term far exceed the what I would have saved by paying cash.

It's all about liquidity, capital, and potential, which has rather intangible values. You want a gaurantee, well too bad there isn't one. That's life, there's no gaurantee you won't die in your sleep tonigh, but presumably you're going to go to bed sometime, yes?

[WhiteElephants]

Originally posted by JohnT
Hmmmm. Interestingly enough, our company's CFO advised a co-worker who received a nice inheritance to pay off their house. IIRC, his words were "It's the best investment you can make."

Hey, that's the same thing Enron CEO was telling his employees with regard to Enron stock, are they related or something?

Ironically enough he was saying that before the bottom fell out, your companies CFO is making the same mistake as those who rode the tech bubble and got dumped on believing the whole time there was no bottom. It's risk vs. reward, I myself would diversify my investments rather than dump a load of it into a house when the real estate market may very well take a dump. But who am I to say such nonsense.

When I said, "every", I meant to consider them all.