(14-04-2013, 11:15 AM)mysterion Wrote: [ -> ] (14-04-2013, 09:08 AM)NTL Wrote: [ -> ] (13-04-2013, 03:03 PM)Musicwhiz Wrote: [ -> ] (13-04-2013, 09:49 AM)NTL Wrote: [ -> ]I have a friend who stretch the car loan to maximum as she believe she can invest and get a better return than the interest paid over the 10yrs period.
If your friend is paying an average of 4-5% effective interest rate on the car loan, then she must be saying that her investments can average a better return than that over the medium-term. So from this I can conclude that your friend must be a very astute investor!
While I do not know her investment return like, I do believe that she had did her calculations before taking on such a proposition.
Wouldn't indexing outperform 4-5% over a 10 year period easily?
Can STI ETF index achieved 4-5%? How many years STI ETF existed?
(13-04-2013, 01:29 PM)opmi Wrote: [ -> ] (13-04-2013, 09:49 AM)NTL Wrote: [ -> ]I have a friend who stretch the car loan to maximum as she believe she can invest and get a better return than the interest paid over the 10yrs period.
In an asset inflation situation, anyone who borrow and consume first wins.
Of course! provided you have the means ($) to pay back your long term debt. And it also depend on the products. Some products like home appliances can go obsolete and new replacements getting cheaper. like TV, DVD, Blu-Ray player. i know i have bought some of these products which were top performance and latest technology at that time. Now they as are as good as "worthless". Though still can "perform". Anyone interested to know more. HA! HA!
One thing i definitely never regret is the money i spend on food. We used to consume 3 roasted duck's drumstick at $1.50/stick at one go. And the quality of the meat was so much better. Because these ducks were fed mainly on vegetables. You could taste the duck meat with a hint of "vegetable aroma". i think people like my age (64+) will understand what i am talking about.
What i am saying is time and inflation do not make everything much more expensive. Ah but food; Glorious food! i hope i am not promoting " i'm alive to live to eat only".
"In an asset inflation situation, anyone who borrow and consume first wins." except for technology products and Japan (which had a history of deflation).
(15-04-2013, 03:49 PM)a74henry Wrote: [ -> ]"In an asset inflation situation, anyone who borrow and consume first wins." except for technology products and Japan (which had a history of deflation).
Of course, in Singapore buying a car is like sucking your "blood". But many people enjoy "Vampire Effect' leh. Me maybe included if not careful.