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YOUR RESEARCHFinancing a 996?
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I don't know where you're looking, but I've never paid more than 3.5% on used car financing.
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I work in banking so the fact that I�m asking this is probably a little embarrassing.
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Suggestion
No doubt Amazon is desperate for good people to fill positions during the COVID days.
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Suggestion
However, a person who does not have sufficient cash on hand to pay off the loan, would only have the choice of raising the $ to repair the car, since the lender would be unlikely to agree to salvage the car to offset the loan by extending a personal loan for the balance.
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Suggestion
Financing a $15K-$20K car, owing $12K on it when the motor goes bad is not a good place to be for someone that does not have $10K sitting to replace the motor.
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Hi everybody -I�m long time lurker and I�ve forgotten my username at least twice... so this is a new profile. I previously owned a 944 and a Boxster and I�m shopping for a 996. Out of curiosity, how many of you finance these vehicles vs paying cash?
I do. For the most part these reached their bottom a while ago so you shouldn't be under water. I prefer more of my money liquid right nor or putting it into our IRA. I could pay the car off if I want to though.
that is my thought as well. Interest rates are low and prices of these cars seem likely to appreciate, so I�m trying to see if there�s any good reason NOT to finance a 996
If you decide to finance, Penfed is a good source. Not all places will finance a vehicle over a certain age. Lighstream is good too, but can be a bit higher.
"prices of these cars seem likely to appreciate,"
^^ Not likely in any significant way in the short term. If you're in for the long haul maybe, but no guarantees (past performance is no indication of future gains - yada yada yada...) YMMV
Cash or finance doesn�t matter. Just budget for the required repairs/maintenance on a ~20 yr old car if you plan to drive it. It can be a relatively economical car if you plan to DIY the projects.
Sure it does. I financed my car for a 36 months at 3.49%. That's a lower rate than a lot of mortgages and certainly far lower than the average returns from an index fund. I paid it off in a year but having a little extra cash on hand was nice for the unavoidable home and car repairs that come along with owning an old home and old car.
Could I have paid cash? Yes. Would it have been a little stretch and left me with less cushion? Yes. Did index funds grow by considerably more than 3.49% during the time I had the loan? Absolutely yes.
OP: any local credit union should be more than willing to finance and rates are low right now. Just don't use a loan as a tool to buy more car than you can realistically afford.
Depends on the interest rate. I guess by liquid I mean money I can use for anything else. My logic is once that money is gone it�s gone. If I take out a loan with favorable rates it�s available for other things. Right now I�m actually In the process of paying it down quickly, should be done after 2.5 total years of ownership.
I paid cash.
Nothing I own is financed. (Home, Cars, furniture, etc)
I‘m debt free.
I drove beaters for many years so I could max out my 401k and make good investments.
Now I can enjoy my car without worry.
No house or car payments mean I was able to save enough so I could buy my car with cash.
I can afford to completely replace the car, or engine, with cash.
I can retire whenever I’m ready. (I‘m 53)
Financed $9k of mine ($14k purchase price) to get the car in my hands and paid it off within a year/no early penalty. I could have paid for it all, but like others said, I have a house and other expenses that could come up and figured it would be prudent to have some reserve in my savings. That worked for me. Everyone has a little different situation. The local credit union wasn't bad to deal with either.
THIS is doing it the best way! I was fortunate enough to retire at 55 under the same conditions. I realize not everyone is in a position to be able do this. However, if you can do it...do it. It puts a whole new perspective on life. Paying interest is just money lost IMHO.
Paid cash
But I don�t there�s any problem with financing if it makes sense for your situation.
Why are forums always full of �I pay cash for everything� people?
There are pros and cons to both and I think there is something to be said for paying for everything in cash. At the same time, I like to finance if I can and anything I possibly can purchase with a CC is for points but the CC are paid every month. There is a video on Vinwiki about how a lot of people purchase high end cars and most of the time it isn't with cash.
This! If you are smart with your money it makes a lot of sense to finance at the rates available right now even if you have cash available to buy it outright. As long as you don't spend that cash after on mods and continue to invest it...
. The only advantages I can see in paying for it in full would be if you didn't want the burden of payments.
Old school philosophy. My parents have the same mindset and are adverse to carrying debt... always telling me to pay off the mortgage faster (which is a 1.69% fixed rate). I do like the feeling of being debt free though!
My 2000 C4 Cab only cost $15k. So, didn't bother financing it.
However, I would have had no problem doing so if I needed/wanted to do so. I just bought a 2014 Z51 Corvette Stingray for $41.9 and financed $25k because I didn't want to put that much cash in the car even though I had the $ to pay all cash for it.
No problem borrowing $ to buy a car or anything else, as long as you can manage the payments and can borrow the $ cheaply.
I couldn't for a toy, especially a 996. Things can go south real quick and you end up with a roller and a huge loan. A Roller is bad enough.
Good luck.
sure it is. I understand your point, but the government considers me a homeowner even though I have a mortgage.
totally agree! My only remaining debt is the mortgage and it will be paid off by the time I reach 55. (I'm 48). what I REALLY don't understand is people who LEASE cars. that, IMHO, is money lost.
We financed. Made sense for us to to it this way, so we did.
That being said, if financing the car means your monthly budget is a little stretched, be mindful that a major repair could really hurt. The last thing you want is a car you're making payments on but can't drive.
Generally, I believe if you can't afford to buy the toy outright, you can't afford the toy. If you CAN afford to buy outright, but CHOOSE to finance due to a very low rate that allows you to make more with your cash elsewhere, that's fine. However, that generally isn't going to happen with a loan on a 20 yr old used car. Paid cash for mine. Someone mentioned putting everything on a card as long as they pay it off every month....for all intents and purposes, that's like paying cash. I do the same...more miles/points, the better.
for completely unnecessary toys? What are you basing that on?
This whole arbitrage angle on a 15k car is just ridiculous if you ask me. As noted above, the market isn't always going to return 7+% every year over a 5 year period and even if it did, is the small gain really worth it?
Maybe if we are talking 100k cars, it makes a bit more sense, but to those people, that difference is likely academic.
I might not eek out every dollar of investment return I possibly could, but if **** were to hit the fan (job loss, med bills, etc), I don't owe anybody anything.
I appreciate the diverse perspectives here. I will probably finance around half the value of the car. Local credit unions have very attractive rates for auto loans right now. I�m not debt averse, so long as the money is relatively cheap and there is an exit strategy... a blown up engine could hurt that, but I guess I will take that risk. The car won�t get driven very much.
I�m 31 and recently bought a house. living debt free is difficult to impossible for most of my generation, and I wouldn�t really find that a desirable lifestyle to be honest... I have a high-ish income for my age bracket and housing prices are still astronomical in most major job markets!!
Step one is to see if the credit unions still have attractive rates when the car is as old as a 996. The rates they are advertising are likely for new cars, however, that is speculation on my part. Once you are armed with the information specific to the car you'd like to finance you can re-evaluate whether it's worth it or not.
A blown engine will hurt, for sure, but keep in mind that is at the extreme worst-case end of your scenario portfolio. Many of these cars require work immediately, especially if you are paying for a $15-20k 996 vs. a $25-30k 996. (And the $30k ones still need work...) Consider how a surprise $2,500 bill could effect your monthly finances. In the case of a classic sports car you are far more likely to get nickel-and-dimed to death than you are to have the $25,000 engine replacement tombstone fall on your head. Can't promise you what will happen - I can only promise you
something
will happen.
Best of luck getting into the car you want. Where there's a will there's a way! As a car-loving millennial myself I understand your struggle. Just remember that the best solution for you could be to hit the pause button for a few years. These girls aren't going anywhere, there will be a nice market for you to shop whenever you choose to buy.
so you're basing it on your knowledge of how people with "real money" spending it. Are you an attorney or financial advisor working with HNW clients? Otherwise, I'm not really sure how you would know how they pay for their toys.
most people find delaying gratification undesirable, but in the end I think the peace of mind and financial well being that comes from it to be well worth it. I'm not suggesting if you live in a major metro area that you not take a mortgage, but other consumer debt just feels like a bad idea.
sounds like you have a reasonable grasp of the situation, so i'm sure you'll make the best choice for yourself.
I work in banking so the fact that I�m asking this is probably a little embarrassing. Rich people pay my salary and they LOVE using debt for productive purposes or for housing, but usually not to buy toys.
i was just curious how the average 996 buyer is paying for these cars...
I paid cash for mine earlier this year. I didn't want to buy from a dealer, the cash represented ~10% of my non-retirement savings and that portion of savings was sitting in savings type accounts that only get 1-2% interest anyway.
I agree if you have the money, it's probably better to finance at 3.5% rather than taking that money out of your brokerage account. I've also heard lots of anecdotal evidence that rich people do this type of thing a lot. (but I also agree that at these numbers it's mostly academic).
If you have the money, a blown engine doesn't change the equation whether you finance or not. If you don't have the money it puts you in a bad position because you can no longer sell the car to pay off the loan if you need to.
If someone HAS to finance something like this because it will take a good chunk of their savings, that's a BAD idea. These same people usually also fail to factor in insurance, repairs, etc.
If someone finances a purchase like this hoping it'll appreciate, that's another bad idea. I hope mine will appreciate but I didn't buy it for that reason. Still, one of the reasons I picked the 911 over something like a Boxster or 300Z was that I don't think the car will depreciate (as long as the engine doesn't blow). If it happens, it won't kill me though.
I'm going to catch a lot of heat for this. Here goes: I'm 33, long time lurker that financed a '99 C2 coupe for $17k. immediately had the IMS and clutch done at a tune of $4.5k If this sounds crazy to you, then you might not want to finance it. Lol. The guys saying to buy in cash are not wrong. There are a lot of better ways to put yourself in debt and if you can avoid it altogether, that is going to be your best bet.
With that all said, I'm happy I did it. Yes, my money would be better spent in other places. Yes, there are cheaper sports cars out there that are faster and easier on the wallet. For the same money, I could go buy a newer Boxter or Cayman if I'm sticking with a modern Porsche. And after driving a Miata RF last year, I seriously considered that as it would be cheaper to live with and (I think) is just as much fun as my 911. But I wanted a 911, and I wanted to stay under $25k. I don't see prices skyrocketing for the 996, I have seen an uptick this year for values but I think outside of the C4S and Turbo models, most won't be selling for anything over $25k unless they are pretty low mileage. And even if they do, I don't think mine will be considered a prime example.
But I'm lucky enough to be in a stable position that isn't going anywhere anytime soon, I work from home now and in the event that I end up going back to my office, I have my old Infiniti to use for a daily driver. My 911 still has some little things to address, but with it being a project car I never expected to have it road-ready 100% of the time. If you're in a position where the money makes sense to you (and your family, if that applies), I'd say go for it. Just plan on having some things to address and I wouldn't recommend it as a daily driver.
*Flame shields up*
So many people get suckered into financing or leases only to realize after the cooling down period they've made a horrible mistake. They're now stuck with a contract that will be very difficult to get out of without a substantial loss. Never drink the Kool Aid
that says the dealership has your best interest in mind. No, they're taking care of the hand that feeds them... plain and simple.
Dealerships do NOT like it when people purchase cars with cash. So much profit is made with financing, extended warranties, and lease agreements. It would be ludicrous for a car sales person to encourage cash in full and drive off. Every one of my cash purchases at dealerships was countered by multiple dealership representatives trying to convenience me that there were "better options" available if I didn't want to pay with cash.
Better discounts they said... better for the credit score they said... yada yada yada
I'm not totally against financing. I'm against unwise purchases that involve financing. If you're up to your neck in debt, then don't just walk, but run from a 20-year-old used Porsche purchase. It will only put stress on your life and if you're married and have children, the car will become a point on contention that could greatly harm your marital relationship.
IMHO, the only consumer debt one needs is their mortgage.
Craigslist is full of cheap sports cars that will be less costly to maintain. I'm a big Porsche fan, but I'm also very realistic about the costs of ownership. Remember, the cheapest Porsche you buy will quickly become the most expensive to own.
Cheers!
Interest rates are incredibly cheap right now. Even a novice investor should be able to earn more investment income than they pay in interest on a secured loan.
It might be regional. The highest income people I know are the ones who most utilize debt for purchases becaues why wouldn't you pay someone 3.5% to earn at least 12% on the same money as a passive investor?
Paid cash for my 996.
My approach: if I can find a
safe
investment (ie. no chance of losing value) that pays a higher rate than a loan, then financing is fine.
I've only done this once in the last 25 years, when the dealership was offering 0%.
I purchased mine with partial finance when I was 27, through my local credit union at roughly 3%, the car was about $27k and put $8k down. Paid more than monthly minimum to avoid paying all the interest, and paid it off early. Doing it this way allowed me to put money into other investments over the months/years, when paying for the car in full would have deterred from doing such. Everyone can navigate their situations however they please, there's no right or wrong way, you just need to evaluate and make sure you're not getting screwed over in the end.
^^ Everyone says he's putting his luggage in the wrong place but considering the way he wears his suspenders I have a feeling he's about to jam that fancy duffel in the engine bay, use his suspenders as tie-downs, and call it a day.
On a newer used car? Sure, I can see that. First place I looked was Bank of America...it was a 60mo rate for 750+ at 5.3% (no shorter terms advertised, but certainly lower). Other sites showed similar. My local Credit Union was 5+% for 2010 or older another local CU was %6.5 + for 2006 and older. Navy Federal CU is "as low as 3.7%" for a 2018 and older (unless it is 20 yrs old, then it requires an antique loan which has collateral requirements. Anyway, I was curious and checked.
Interesting. Looks like car rates have come up a bit since I last financed for a car, but my credit union is doing 3.89 for a car of this age at a 700+ score. Depending on what you have going, your own bank can write you a line of credit for less than that. You can get lines of credit secured against cash for a variable rate that is presently under 2%.
I'm in the same camp as many here. I do not owe money to anyone for anything, I was real stupid when I was younger, and one day decided I would never get ahead owing for things like cars, houses, etc.. I will never borrow money again BUT if for some reason I was in the position I had to, it would not be for a $15K-$25K car that is nothing more than a toy (apologize to any of you daily driving).
As others have pointed out, you are not going to make that much in the market over the course of 3 years to justify the risk of ending up with a car with a blown motor that you still owe money on. And yes, I know you could point out a single stock you could have invested $15K in 3 years ago and turned it into $150K.
I am in the same boat, I don't like owing people money but at the same time, I think financing is a great tool if you don't overextend yourself. I paid 10% + taxes and fees on my 911 and financed the rest, I knew it was a car that would not significantly drop in value. At the same time I could have paid that off in cash but I am glad I didn't. Instead, we are using that money to pay for my wife's grad school rather than taking out a lengthy student loan. Now that things are a bit more stable for us I am throwing money at the Porsche to get it paid off ASAP. I also like to take advantage of CC offers, just got a new TV at BB a few weeks ago and opened that card for 0% and a few bucks back. I could have paid it right then and there but why? At the same time, I will pay that off before I make another potential purchase like that. Also regarding new cars, almost everyone is offering some sort of 0% right now and IMO you would be nuts not to take the loan. We got my wife a new Tiguan in May and for a car that she will drive for the next 7 years, there was no reason to pay it in cash.
Rather than pontificating about how amazing everyone thinks they are for paying cash for their car, here's an answer that actually answers the original question:
Most large banks/lenders aren't going to finance a car as old as a 996. Local credit unions likely will. Here in the Seattle area, BECU is a popular one. They will finance nearly anything of any age as long as it meets certain criteria (under $120k miles, clear title, and only up to 110% of Blue Book value or something like that). And even for something older, their rates are pretty decent.
Yes, it's generally a much better idea to pay cash if you can. However, some people are willing to pay the extra cost of financing for the peace of mind of keeping those funds liquid, or because they want the toy right now, and not a year or two from now. Carrying some debt isn't a bad thing if you are a responsible borrower and money manager.
Another option to consider if you are a home owner is opening a HELOC and using funds from that to buy the car. My HELOC has a lower rate than the average car loan right now, for example.
Had to like this reply for using �pontificating�
After traveling over 300 miles for a test drive (after a PPI from a local independent) I had a problem doing a wire transfer for the full amount.
The Porsche dealer actually offered financing on a 21 year old 911 so I could drive home with the title.
I was extremely surprised and politely declined.
Ditto! ^
There is absolutely NOTHING wrong w/borrowing $ as long as you do it w/in your means and do so judiciously.
Most rich people (and I'm not one of them) make most of their $ by borrowing it in property and/or businesses. It's nice to pay cash for things when you can afford to and necessary when you are paying excessive amounts in interest and other costs but there are GOOD reasons not to do so.
I only have a home loan of $115k and a car loan of $25k outsanding at the moment. I could pay off BOTH loans now if I wanted to but it's unncessary because the payments are extremely low. I generally pay off my car loans before the loans mature and will probably do so w/this car loan too in 2-3 years when I generate enough extra cash to make me comfortable doing so.
I'd NEVER pay off my mortgage early becasue having a mortgage that you pay regularly actually INCREASES your credit score (mine has actually been at 850 but it varies). In fact, my current plan is to refi my existing mtg and to increase the mortgage amount to $225k in order to take out $100k cash but still make the same $800/mo payment.
So, while I can pay for everything CASH, IMO, it doesn't always make sense to do so.
I guess it is all about life decisions. I met a few too many people that have financed cars that they couldn't really afford. The car breaks down, and they can't afford to fix it. They end up paying on a car that is just sitting.
There have been a few on this forum with that exact problem. Financing a $15K-$20K car, owing $12K on it when the motor goes bad is not a good place to be for someone that does not have $10K sitting to replace the motor.
These are the people that shouldn't be financing anything though. If you cannot manage your budget, you shouldn't be financing a TV let alone a car. I think my mom is a perfect example, she wants a new SUV, shes been driving the same one for 16 years. She looks at the price and can't believe how expensive they are, even though with inflation they are the same price they were 16 years ago. She likes the Volvo XC40 and Volvo is offering 0% financing. The payment would be around $650 a month and even though it's a lot, taking $45k out of her retirement means she has $45k that can't be earning anything, even in a conservative investment. My logic is always, once that money is gone, it's gone. If you take out the financing and get sick of it you can always then decide to pay it off. In the end, the reality is you should just do whatever makes you feel the most comfortable.
I think that's the problem with our modern society. People make too many important decisions on feelings instead of using the brain and sound reasoning.
Folks, this just popped up on the 987 forum. This is the kind of thing you want to avoid and why a pre-purchase inspection is so important when making a financial investment on a used Porsche.
I bought my 996 in early May of this year. I'd planned to pay cash, but my credit union opened a new branch and they were doing 2% auto loans to celebrate. So I called them and asked for the longest loan term they could give me at 2%. That turned out to be 4 years. I think I financed $15K of the purchase price. The total interest (if I take the loan to term) is ~$620. I took $10K of what I would have spent and dropped it into a S&P index. That $10K is now worth like $12K. Obviously, this advantage is unrealized until I sell, but I feel good about it.
So yeah, I think it can make sense to finance.
No doubt Amazon is desperate for good people to fill positions during the COVID days. They've recently built many mega distributions centers in our state. It's crazy how fast they're growing.
It really is crazy. They're massive structures. I just saw another 500,000 sg.ft (and these are the small ones) plus Amazon building just yesterday that seemed to have popped up overnight about 4 miles from my house.
Everyone suggesting you pocket the spread between invested $ and the car�s interest rate aren�t properly favoriting risk. Yes I�ve mare 22% in the stock market in the past year, but that�s short term, it won�t last.
When the **** hits the fan (a la pandemic), it�s really nice having zero car payments and zero debt and only a mortgage, it makes the insane times not insane. Cash for toys everyday.
I love my mom but she's very secretive of her finances, my dad was the complete opposite but unfortunately, we lost him in 2012. I know when we met together with her financial advisor he mentioned she isn't even using her retirement yet. She's getting close to 68, she still works and collects SS and whatever is left from my dad's life insurance. So I am assuming its coming from non-retirement accounts.
I�m happy to have sparked a conversation that many feel passionately about!
I haven�t found the right car yet and I�m not in a rush, so I�ll figure it out once the right one pops up. I�m also slightly torn between a 996 and a cayman S, but that�s another story...
I only go by what your wrote am I supposed to be a mind reader? Don't tell people what is and isn't appropriate opinion when you discuss things in a public forum.
Where the heck are you getting a sub 2% loan for 30 yrs? Cuz I'd blow another set of closing fees for that even after I just refi'd at 2.625 and still save a bit.
There is no reason to carry debt specifically for your credit score. Debt like a mortgage or HELOC just happens to have a positive effect when paid regularly. I've never had a mortgage in my name and my credit bounces between 760-800 depending on my credit card utilization. My wife has had a mortgage but no longer does and her credit score is 815.
Here in Canada, sub 2% mortgages are just laying there, begging to be taken. If your mortgage is insured (we have a national insurer for such things) 1.5% is well within reach.
Every person and every situation is different. Honestly if you can get a good rate, then financing isn�t bad at all. I made 30% on a stock trade recently. Honestly I should�ve borrowed a lot or bought as an option and made even more money.
It all depends on what you are doing with the money. I�m about to blow $100 to take on a $500 note for something that nets $250 a year. I hate borrowing but I don�t have $500 cash to my name (k).
You are a grown man, you make your own choices and you live with the consequences.
My wife loves the 996, or I�d probably sell it. I have way more fun racing my $4000 Subaru on dirt or driving my half cost Boxster S.
I just financed my first Porsche. It's the same as financing any car in my opinion. I think the "pay cash" guys are just trying to keep you from buying a 3000lb paper weight that you have to make payments on. If you find a good deal and know what your getting into then beg, barrow and steal to get it.
There are those that prefer to pay all cash because it helps them to sleep better but properly managing your credit does (despite naysayers) enhance your credit score thereby reducing the interest you have to pay on loans AND credit scores are also used as a proxy for "trustworthiness and reliability" in order to obtain jobs, insurance and to rent property (if you can't afford to buy a place).
Personally, I think there is no greater risk buying a 996 on credit that it is to pay for it all cash UNLESS you can't afford the payments because, if the car becomes a roller, you're out the full purchase price of the car if you paid all cash AND you're out your downpayment and still obligated to pay off the loan if you took one out on the car.
If you finance things, like I do, even though you have the $ to pay all cash for whatever it is you take a loan out on, then you could just pay off the loan and (apart from the interest charges) be in exactly the same boat as the person who paid all cash for the car.
In either case, you have the choice to take your losses and scrap the car as a roller OR pay the addtional $ necessary to fix the car.
However, a person who does not have sufficient cash on hand to pay off the loan, would only have the choice of raising the $ to repair the car, since the lender would be unlikely to agree to salvage the car to offset the loan by extending a personal loan for the balance.
Nevertheless, the financial risks in either case -- all cash or down payment/loan -- are essentially the same.
A problem only arises when someone overextends him/herself when s/he takes out a loan on property (cars, real estate or whatever) that they cannot afford to fix/maintain but, if you are liquid and/or are not adequately insured from any loss (like total destruction of your house or car), you definitely get in over your head.
But, there are still people whose houses burned down in CA and elsewhere who have not been able to rebuild their houses and/or have not been made whole by their insurance companies. Should they have NOT bought a house because they could buy it all cash to begin with? I think not.
The same applies to a car or any toy that you want to buy.
If you already know (as most prospective buyers should because of the availability of the info) that the engine in a 996 might blow up, then you need to take that factor into consideration of whether you buy the car or not and, if you only have limited funds, say just $20k in the bank and the car costs $20k, what's the better choice?
To put the full $20k into the car and risk NOT having the $15k you need to repair the motor or put $5k into the car and reserve $15k to fix the car if the engine blows up? IMO, the better choice would be the latter.
So, I don't think the choice between buying a 996 "all cash" or financing it is not as "safe" and clear cut as some of the people here suggest.
I think some of us would say that the correct answer to your query is to buy a $5k miata. And being in the financial field myself, many of the people that say, "oh i'm just financing for arbitrage purposes" and "I have the cash but just want to keep it liquid" in fact don't do or have either. Just like everyone on the internet is 6ft tall, makes $300k a year, and is married to a model. When you actually see the bank statements, the bravado tends to disappear very quickly. I do agree though that if you only have $20k, it doesn't matter how you buy a $20k car, its not a great idea.
That said, everyone has their own comfort level with risk and debt. I plan for armaggedon so when it doesn't happen, I'll be in pretty good shape. And if something does go bad, then I will be ok. Others seem to sleep just fine with much higher levels of debt.
I guess a big issue to me is, if you aren't at least putting in AT LEAST as much as your company will match into your 401(k) (or making equivalent retirement savings) and you don't have 1yr to 6 mos of savings in the bank, you probably shouldn't be talking about financing or paying cash for any $20k toy....regardless of whether it might blow up or not. If you are not taking care of those other those other two things first, my feeling is you are doing it wrong.
Some say you gotta stay liquid for the next big drop in the market like the one last March. If that means financing some stuff so be it. I tend to agree. Many fortunes were made this year.
Yep big business is having their best year ever and small business is dying. Big fortunes were made; I can�t argue many were made though.
If you can get financing at current low interest rates though, it�s definitely something to consider.
True, but they aren�t all getting rich. There�s a monumental divide between an average investor earning 15% on their investments and a billionaire earning 7%. The billionaire is still accumulating wealth in much bigger $ amounts.
Investing vs, having huge sums to invest isn�t even comparable. It�s like bragging about your apple tree to a guy that owns multiple apple orchards. Scale matters most in investing.
I agree and hate the crony nature of big business, but more and more awareness of investing among youth is a good step in the right direction because there's more and more awareness that saved money can work for you, while you work for more if it, so more of it can work for you, and it shouldn't necessarily depreciate in car, or grow in a car that appreciates but is never driven, there are better investments. Also, this discussion, I assumed, was about the little guy not the billionaire, but your point is well taken.
I was waiting and waiting for this big drop, from 2018 through 2019 and then when it did happen in March 2020, I had a tendency to want to hold onto the cash that could have been invested because one of us were worried about potentially losing a job during Covid.
It takes cojones to invest after the market tanks, but it is often a way to build wealth.
The other way to do it is contribute more during the dip. If one normally contributes $15k/yr towards an investment, one could contribute an extra $5k by contributing more for a few months during that dip. Dollar cost averaging.
That extra $5k could be worth $9k today, which could be used towards a 911.
I was a big "player" in the market for years. Made and lost $100's of thousands in the option market.
But, then I retired, and I was important to keep as much cash on hand w/o risk. So, I've been entirely "out of the market" since then because my pension and trust income provide me w/more $ than I could ever make in the market on an annual basis. So, there is no need for me to be "in the market" anymore and I sleep better because of it.
Yeah, my cash reserves lose value due to inflation but current inflation rates are extremely low and having a high 6 figures in cash on hand gives me peace the way that buying things cash does for others. I could pay off all of my loans (only 2) right now but my pension/trust income cover them, so there's no need to reduce my cash reserves in order to do so.
Everyone's $ management style is different and there is NO "right" answer, as long as you can preserve/make $ and pay all of your debts (if any) on time and your FICO score is a good indication of how you are doing in this regard.
This is a source reference. Confirm exact model applicability in the original material.
