High dollar comics and high interest debt (was Comic Conspiracy...)

[UnrulyAppendage]

And the car thing, you need to look at the time value of money - if a car company offers me the ability to buy a $25000 car with 1) nothing down 2) 72 months to pay and 3) no interest, I'm all over it. I can pay $25000 now or pay you 1/72 of $25000 for 6 years with no interest? Thanks for the free cash!

 

If you had a paid for car and paid yourself car payments in a good growth mutual fund, you would have more money. It is not just about avoiding interest payments, but getting compound interest working for you. $ 25,000 that grows at 7% interest in seven years, adjusted for 2% inflation is $34,000. If you bought a $25,000 car with cash after the seven years, you would have over $11,000 left over, and you could start paying yourself again.

 

In thirty years, $ 25,000 adjusted for inflation is worth $110,212 at 7% growth. If you get 10% growth, its worth 259,721. How much would that car be worth in thirty years?

[FlyingDonut]

And the car thing, you need to look at the time value of money - if a car company offers me the ability to buy a $25000 car with 1) nothing down 2) 72 months to pay and 3) no interest, I'm all over it. I can pay $25000 now or pay you 1/72 of $25000 for 6 years with no interest? Thanks for the free cash!

 

If you had a paid for car and paid yourself car payments in a good growth mutual fund, you would have more money. It is not just about avoiding interest payments, but getting compound interest working for you. $ 25,000 that grows at 7% interest in seven years, adjusted for 2% inflation is $34,000. If you bought a $25,000 car with cash after the seven years, you would have over $11,000 left over, and you could start paying yourself again.

 

In thirty years, $ 25,000 adjusted for inflation is worth $110,212 at 7% growth. If you get 10% growth, its worth 259,721. How much would that car be worth in thirty years?

 

Right, but I still have to buy the car. Maybe I'm missing something from your example.

[comicmankev]

I too think you are all under-estimating the power of debt?

 

You say about BSD, the typical way of running a major business is in debt. The cost of the debt is offset against profits and all inclusive. I'm pretty sure, Chuck, PGC, Jason Ew, and many many other BSD are all in the red. This is not a BAD debt though, far from it. They are investing in their business, and if they sold everything today (for their asking prices!), they would be out of debt and in major (major) profit. Just like property dealers, 99% of them are running in the red, but what they own in property is collateral.

 

I have no problem in telling people I am in debt. A lot more than what I should be. But, if a book that I have been looking for for a long time comes up at a good price, I will charge it. To me, if you want the book that bad, then the fees come as part of the price. Of course, I do ship my debt easily every 6 months to 0% rates so never actually get charged a thing, but it's not the point. There are MAJOR advantages to debt, and in todays low interest society, it can work to your advantage.

 

BAD DEBT - the time when it is bad is when you have to charge day to day living expenses to your CC because there is no cash anywhere for that, and yes, I'm sure theres members around here with that too.

 

Now, go buy some of my books in the marketlace and help clear those debts of mine

[UnrulyAppendage]

And the car thing, you need to look at the time value of money - if a car company offers me the ability to buy a $25000 car with 1) nothing down 2) 72 months to pay and 3) no interest, I'm all over it. I can pay $25000 now or pay you 1/72 of $25000 for 6 years with no interest? Thanks for the free cash!

 

If you had a paid for car and paid yourself car payments in a good growth mutual fund, you would have more money. It is not just about avoiding interest payments, but getting compound interest working for you. $ 25,000 that grows at 7% interest in seven years, adjusted for 2% inflation is $34,000. If you bought a $25,000 car with cash after the seven years, you would have over $11,000 left over, and you could start paying yourself again.

 

In thirty years, $ 25,000 adjusted for inflation is worth $110,212 at 7% growth. If you get 10% growth, its worth 259,721. How much would that car be worth in thirty years?

 

Right, but I still have to buy the car. Maybe I'm missing something from your example.

 

My point is you say it's intrest free payments which is good, but if you got to the point of making car payments to yourself and put them into something that grew, you would have more money and cash to pay for the car. It's a numbers game. If you were to finance the 25,000 car for seven years at say 7%, the total payment to the bank would be over $30,000. If you paid yourself, you would have over thirty thousand. While you don't lose anything for an interest free arrangement, you still lose out interest that could be paid to you, plus the car depreciation.

 

Buy a car for cash, and then make payments to yourself so that you can buy a better car the next time with cash. Keep doing it, the car pays for itself.

[sterlingcomics]

I can only really buy the books I do for three reasons--I lived at home until I was 29 and spent virtually no money, I have no kids, and I made nice money doing MCSE/MCSD technical training in the late 1990s before the "dot com" bubble burst. My salary is almost back up to that same level again since I'm more experienced, but it's still about 15% lower now than it was in 2000.

 

It's tough to be in the technical field now---just a few years ago, I was on I can't complain though---although the price of my salary is paid with my extensive travel.