Woman admits fleecing shopping network of more than $412,000

[SUBMAN1]

Originally Posted by DeepIron

Great points! Unfortunately, in my particular case, I have to factor in the MIL (Mother-In-Law) constant. She lives with us and is the primary reason we bought the van in the first place...

The upside is now that we are her primary caregivers, I get the $$$ back in tax deductions...

Well, a need sometimes outweighs the logic of doing right, so I don't fault you there. It is also commendable to take care of the elderly when they become incapable of taking care of themselves. I respect that.

-S

[SUBMAN1]

By the way - I forgot to mention the biggest factor in not wanting to take a car loan - RISK!!! You assume you will have income. You asssume you will be able to make the payment, but life may not have that in mind for you. It would really suck to pay $25K on a car, only to lose everything because you got laid off.

The #1 reason for bankruptcy in America - Medical problems.

If you have no debt, you have no worries. It is as simple as that. All your effor to gather wealth and be comfortable no longer has any risk associated with it when you are no longer a slave to the lender.

Debt is really the modern equivelent to slavery. Most of America are slaves. People wonder how the rich get rich - it's as simple as a mathmatical formula on not having debt. With the kind of incomes in America, any person in this country can become wealthy. And!!! And!!! You can do it on a factory workers salary. Just invest more and pay less for things you buy. You can do this by only paying cash.

<...steps down from soapbox...>

-S

[DeepIron]

Speaking of cars and layoffs: http://news.bbc.co.uk/2/hi/business/7073406.stm
and the killer: "The deal, affecting 45,000 active workers at Chrysler and more than 55,000 retired staff, included proposed reforms to pension entitlements and healthcare benefits."

[SUBMAN1]

Originally Posted by DeepIron

Speaking of cars and layoffs: http://news.bbc.co.uk/2/hi/business/7073406.stm
and the killer: "The deal, affecting 45,000 active workers at Chrysler and more than 55,000 retired staff, included proposed reforms to pension entitlements and healthcare benefits."

Exactly. It is back to the old days where one looks after himself. No one is going to do it for you.

-S

[SUBMAN1]

Something else just popped into my head - I forgot to factor in that a car is a depreciating asset! I guess this is making things complicated now, but in 3.25 years, I bet you will want a newer better version for the same money!!! And the guy with the car loan now has a car that is probably only worth $8K!!!! Return on investment stinks in this scenario.

It's called - looking good going broke! Best way to describe it. It is/was a nice looking car! Not my cup of tea, thank you.

-S

[Onkel Neal]

Originally Posted by SUBMAN1

An example of just how bad credit is, simply take a car payment. The average US car payment is $400 a month. Do you know that if you paid yourself $400 a month for 40 years straight into a decent mutual fund that this would add up to $4.5 Million dollars at a normal return on investment of 12%? That car you have there must be a pretty nice car for $4.5 million! The car companies know this, but would rather not tell you because they want that 4.5 million in their pocket, not yours! Hope you like the car!

Lol, that would be a dandy car, if you paid $400 a month on it for 40 years, as you suggested

[August]

Originally Posted by SUBMAN1

ow lets calculate the 5 year loan on your fairly nice $20K used car. You would pay $444.89 for 60 months - much much longer than paying cash for it, for a total out of pocket of $26,693.40. So not only are you paying $11,093.40 extra for the exact same car,

Maybe i'm not a math whiz like you said but even i know that 26,693.40 minus 20k is not 11 grand and change dude...

[SUBMAN1]

Originally Posted by Neal Stevens

Lol, that would be a dandy car, if you paid $400 a month on it for 40 years, as you suggested

That's the point. If you paid yourself $400 a month for 40 years (assuming no interest, nothing), that would equal $192,000 car. If you however invested it in a mutual fund - the exact same $192,000 out of your pocket would then be worth $4.5 Million, and you could buy yourself over 23 times over of the exact same CAR!!!! This is for the same $192K out of pocket total expenses.

-S

[SUBMAN1]

Originally Posted by August

Maybe i'm not a math whiz like you said but even i know that 26,693.40 minus 20k is not 11 grand and change dude...

No - you missed it. You pay yourself at $400 a month into your mutual fund, and you will get the $20K in 3.25 years, and then buy the said car later on cash instead of driving it off the lot today. You will have paid out of pocket into that fund a total of $15,600 and have a return on investment of $4,400.

The math here comes down to what you are paying out of your wallet to get the car.

Take the 5 year loan, you have paid out of your wallet $26,694.40 to the bank, with $6,694.40 in interest, and $20,000 for the car.

If you invested the money first, and paid later, you would have paid out of your wallet, $15,600 (for a $400 a month payment to yourself) and made $4,400 in interest.

Out of wallet expenses are tallied like this:

5 year loan - $26,694.40
- investment - $15,600
--------------------------------
This is a difference of $11,094.40 that physically left your bill fold to pay for the exact same car.

Does this make sense yet?

-S