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Re: I wouldn't brag if I were you... (archive)

[ Follow Ups ] [ 3-series (E46) Message Board ] [ Msg. Board FAQ ]

Posted by Larry in TN on October 05, 1999 at 22:27:35:

In Reply to: I wouldn't brag if I were you... posted by HR on October 05, 1999 at 22:11:00:

: but have the wisdom to take a 7% apr loan instead and put that money in stocks and funds where it easily earns 10% and more.
: Who's the moron now?

Well, I guess it's the guy who thinks that a 10% return will beat a 7% car loan.

Depending on your tax bracket and state that 10% return will be 7.2% (28% bracket) to 5.5% (39% Fed + 6% State).

Next you'll have to adjust the not-guarenteed stock investment returns for risk. Beta's for stocks and funds vary all over the place but it'll easily take your returns well below the guarenteed 7% rate of return you get from NOT financing the car.



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