|
Porsche986: You talk about the "feeling" of knowing you have debt and how you don't like that. You should take some finance classes. The way the world works, the way huge corporations are successful, etc, etc, is that they borrow money at a certain rate, and use it to return a higher rate. This money that is borrowed is debt. Good debt is good. Bad debt is bad. Good debt means that you are making more off of your debt than you are paying for it. For example, if I finance my new car at 4% and invest the money I would have used to buy it, and get a 6% return, my net return is 2%. If you are capable of making money above and beyond the cost of financing the car (which currently, is not hard to do), then you are financially better off to finance it. It's called opportunity cost.
I agree that it "feels better" to pay cash for a car and not have a payment, but I make my decisions based on spreadsheets, not feelings, that is my only point.
|