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Originally Posted by SirBrass
Though let's talk about investing that $20k. Okay, good idea. Perhaps $15k down, and drop the remainder into an appreciating account with someone like Edward Jones. With the right financial manager, that $5k will grow pretty steadily with dividends being reinvested, and thus any capital gains taxes deferred until actual stock is sold, so investments remain untaxed until they're cashed in upon, and the investment just keeps growing on itself in a compound manner. And all you did was pay $5k less on a downpayment for a depreciating asset (car). After the loan is paid off quickly, I'll bet that investment account is close to being worth what you put as the downpayment.
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- Edward Jones has high fees and an inherent conflict of interest in their business model.
- A company like Edward Jones is primarily going to push you into mutual funds vs individual stocks, and in mutual funds you can have capital gains distributions even without selling the core fund.
- You're not getting a $5k investment account up to $15k during the life of the loan unless the market goes crazy for several years straight, which is seriously unlikely, or you get lucky with one homerun stock.
Quote:
Originally Posted by SirBrass
I'd expect in 1 year without a massive, explosive clinton-bomb like we had in 2000, that that initial investment should at least net $5k return in one year. That'd be $25k in growth over 5 years if left untouched (as it ought to be).
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you're not getting those kind of returns every year, and thinking you should get "at least net $5k return in one year" is seriously ignorant.. it would take returns almost like last years (~30%), every year, to get $25k growth in 5 yeaars, and that ain't happening (last years' returns were the best since 1997).