Oh well, maybe no more G for me. - Page 5 - G35Driver - Infiniti G35 & G37 Forum Discussion

Jun 29, 2005 | 08:35 PM

#61

Cabal

Registered User

Joined: Apr 2005

Posts: 29

Likes: 0

Quote:

Originally Posted by AdamsInfiniti

Debt in your home or education is not only a debt, but an investment; that debt (and the money you pay in association with it) is (ideally) going to bring you MORE money in the long run than you pay. IE, you pay so much money on a mortgage, but real estate values appreciate, so you end up with a property (hopefully) more valuable than what you spent on it. Same goes for education. You spend all that money in order to (again, hopefully) get a better, higher paying job.

Debt in a car is a money pit. Sure, I do it, lots of people do it, but it's fiscally irresponsible; it doesn't increase your worth, and you pay more than the vehicle was worth when you bought it NEW, and the value never does anything but decrease.

simply having debt isn't an indicator of fiscal irresponsibility. fiscal responsibility means whether or not you can afford the debt. Let's say I make 100k a year. I now only have 4k in my savings. I need a new car (g35) for work. In this case, since I need a vehicle right now, it would make total sense to take out a loan on the vehicle and minimize the interest premiums by pre-paying my loan down the line. the simple virtue of me taking out a loan doesn't immediately label me as irresponsible because in this case (assuming I can balance my paycheck and bills), a 35-37k loan over 5 years is quite affordable for a single person pulling in 100k.

it's called leverage. it allows me to do something right now without having to wait.

also there's an NPV difference between having the money in your hands right versus having to save a few years for it. i think EZZ touched on that aspect already.