Quote:
Originally Posted by Ess Vee
I'd rather take a loan out on the car, put the rest into a home using FHA and rent it out... the profit right there is the car payment... and income after it's paid off in 72 months.
Not to mention the house would appreciate in value in this market.
If you come out on top over the interest rates offered to you by banks, then it's kind of a no brainer?
Either it makes sense, or it doesn't.
Banks make money on lending money away. In order for them to have money in the first place, they need to offer interest rates to people who deposit money into their banks.
If you don't want to worry about having to make payment (becoming a slave to the financial system), by all means, pay it off outright. You won't have to babysit your funds then.
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In the past, I would have agreed with you. From 2007 to 2009 all bets are off. Looking at the current economy, I just don't think there are guarantees anymore for most traditional investments including housing, mutual funds, stock market, etc will generate a positive return.
I consider the majority of investments to be gambles. I can't tell you how many people I know over the past 6 years or so that took out home equity loans, big car loans, etc and invested in what was considered safe investments and lost their shirts. Look at places like Arizona, Florida, California, etc where people took out massive loans for rental properties or flips and lost everything.
I don't buy that we are completely out of the weeds. Europe is a mess. Unemployement is still high. Health insurance has some huge question marks. A huge percentage of Americans owe more on their house than it is worth. And our country seems to have no answer for the amount of debt we are taking on and how to pay it back. Hint. Taxing just the rich aint gonna even put a dent in our debt, so as usual, the middle class will carry the burden.