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Old 09-19-2019, 10:32 PM   #29
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10 percent per year.....

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Originally Posted by TonyMac View Post
So few people see this. And some never will.
Well, if you can get a 10 percent return great...... most people will not be able to get this... 5 or 6 is a more realistic number... And, they would be lucky to get that.
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Old 09-20-2019, 05:36 AM   #30
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Well, if you can get a 10 percent return great...... most people will not be able to get this... 5 or 6 is a more realistic number... And, they would be lucky to get that.
You are correct but it isn't because 10% cant be done, it's because most people won't take some time to educate themselves. I don't work in finance or have anyone that ever helped me. I am not the smartest person in the world. Just ask my kids and wife.

For the first 30 years of my working career I was a factory production worker so no special knowledge there. The last 30 years I have invested in no-load mutual funds exclusively that are available to everyone. I didn't have that "one" stock that made me a ton of money, again only mutual funds.

I get it that the stock market and investing can be very daunting. I just looked at it as any other hobby that I have had. I dug in and learned as much as I could. Most people will do more research on the best restaurant to eat at than they will to secure their financial future.
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Old 09-20-2019, 05:50 AM   #31
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I guess I look at it differently. Let's take a round figure like $100,000. Say you paid cash and I borrowed at 4% for 10 years. You in essence made 4% on your money. I keep my money in my same investments that I have had for years. Over the last 10 years I have averaged over a 11% return on my money and for 30+ years I am right about 10% return. My payment would be about $1012/month and the $100000 loan would be paid off in 10 years. Let's say I average 10%/year on my $100000 investments and pull my payment out of it each month. After 10 years, I would still have over $61,000 in my investments and a paid off rig. You would have a paid off rig and no money.

I would say you are more underwater than I am. There certainly isn't a guarantee on what your investments will make but I certainly like my track record. As long as money is so cheap to borrow, I will always use the banks money and let mine grow.

There are many ways to skin a cat.

Let us not forget inflation, Cap Gains & maybe income taxes on your earnings. I'm all about letting your money work for you, but I'm also an anti debt guy. I'm not saying your thought process is flawed, just saying there are more variables in play than mentioned.
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Old 09-23-2019, 07:38 PM   #32
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I guess I look at it differently. Let's take a round figure like $100,000. Say you paid cash and I borrowed at 4% for 10 years. You in essence made 4% on your money. I keep my money in my same investments that I have had for years. Over the last 10 years I have averaged over a 11% return on my money and for 30+ years I am right about 10% return. My payment would be about $1012/month and the $100000 loan would be paid off in 10 years. Let's say I average 10%/year on my $100000 investments and pull my payment out of it each month. After 10 years, I would still have over $61,000 in my investments and a paid off rig. You would have a paid off rig and no money.
In general you are right, but you are missing the difference in risk. That 4% is a guaranteed return.

You are taking on a lot more risk. If/when the market drops by half you aren't going to be able to make your payments without selling off a lot of your principal and you will never recover from that.
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Old 09-23-2019, 09:22 PM   #33
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In general you are right, but you are missing the difference in risk. That 4% is a guaranteed return.

You are taking on a lot more risk. If/when the market drops by half you aren't going to be able to make your payments without selling off a lot of your principal and you will never recover from that.
You are correct but I am only 60% in stocks. The market rarely drops 50%. I would have to look it up but I think it has only happened 3 times in a 100 years but anything is possible. I still like my chances. I have been using banks money for years and I will continue.
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Old 09-24-2019, 08:17 AM   #34
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You are correct but I am only 60% in stocks. The market rarely drops 50%. I would have to look it up but I think it has only happened 3 times in a 100 years but anything is possible. I still like my chances. I have been using banks money for years and I will continue.

I suspect, like me, you don't really need a return on your investment to make your payments. So when the market crashes, you can sit on your investments until prices recover. Its ironic that its easier to borrow when you don't really need to.
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Old 09-25-2019, 04:07 PM   #35
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Let me ask you this question

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You are correct but it isn't because 10% cant be done, it's because most people won't take some time to educate themselves. I don't work in finance or have anyone that ever helped me. I am not the smartest person in the world. Just ask my kids and wife.

For the first 30 years of my working career I was a factory production worker so no special knowledge there. The last 30 years I have invested in no-load mutual funds exclusively that are available to everyone. I didn't have that "one" stock that made me a ton of money, again only mutual funds.

I get it that the stock market and investing can be very daunting. I just looked at it as any other hobby that I have had. I dug in and learned as much as I could. Most people will do more research on the best restaurant to eat at than they will to secure their financial future.

Just curious? I have excellent credit and I couldn't get a loan in 2017 at anywhere near 4 percent....

I originally had a loan for 20 years at 5.99 percent for about $90,000...

Yes, I could have gotten even a 2 percent loan on a car for 84 months, but, not an RV.....

So, tell me, where in the world did you find a 4 percent loan for 10 years?

I can see you're point about a payment schedule over 10 years, but, even at your calculation, you would still be paying over $21,000 in interest and while you can deduct it on your taxes, it's not the same as not paying at all.

My interest would have been over $57,000.... that's a huge amount of money to pay...

Maybe you could get a 9 percent return rate over the last year, but, what did you average over the last 5 years, it makes a difference.
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Old 09-25-2019, 06:52 PM   #36
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Home Equity Loan

"So, tell me, where in the world did you find a 4 percent loan for 10 years? "


I think you could get that rate on a home equity line of credit a couple years ago. But we got a 4.2% rate last fall from our credit union on a five year loan.
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Old 09-25-2019, 06:58 PM   #37
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If you don't use it that much why keep it,I would think the more often you use it would make it worth it
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Old 09-25-2019, 07:28 PM   #38
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Originally Posted by MWeiner View Post
Just curious? I have excellent credit and I couldn't get a loan in 2017 at anywhere near 4 percent....

I originally had a loan for 20 years at 5.99 percent for about $90,000...

Yes, I could have gotten even a 2 percent loan on a car for 84 months, but, not an RV.....

So, tell me, where in the world did you find a 4 percent loan for 10 years?

I can see you're point about a payment schedule over 10 years, but, even at your calculation, you would still be paying over $21,000 in interest and while you can deduct it on your taxes, it's not the same as not paying at all.

My interest would have been over $57,000.... that's a huge amount of money to pay...

Maybe you could get a 9 percent return rate over the last year, but, what did you average over the last 5 years, it makes a difference.
All figures were just for an illustration. I did just get a 20 year RV loan last year in July at 4.75%. Found out after I could have gotten 4.5%. This is through Bank of America which the dealer found. I would think you surely could have done better than 6% in '17. I could have gotten 4.99% through my local CU last July.

I think you are failing to see my logic maybe. It isn't about what I paid in interest but what I made on my investment. I will gladly pay 4.75% interest (my actual rate) to use the banks money and make more than double that on my money. In my scenario I still had over $60k left of the original $100k once the rig was paid off where the person that paid cash had nothing left.

Not sure about your last comment about 9% for one year. As I stated, I am a little over 11% for the last 10 years and right about 10% for the last 30 years.

Each their own. I know what works for me. YMMV
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Old 09-25-2019, 07:32 PM   #39
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I suspect, like me, you don't really need a return on your investment to make your payments. So when the market crashes, you can sit on your investments until prices recover. Its ironic that its easier to borrow when you don't really need to.
You are exactly right.
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