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Posted on 1/10/20 at 1:19 pm to PearlJam
quote:
then produce the evidence
Time Value of Money
Compounding Interest
This post was edited on 1/10/20 at 1:21 pm
Posted on 1/10/20 at 1:22 pm to LSUFanHouston
quote:
Remember, these people don't understand time balance of money, they don't understand saving for the future, compound interest, etc.
Which is why I said in the first place, if you can pass freshman algebra (ie, understand simple mathematical concepts), then you don't need Dave Ramsey's advice.
Posted on 1/10/20 at 1:35 pm to iAmBatman
quote:You say you understand, but you continue to post silly comments indicating that you actually don't.
Time Value of Money
Compounding Interest
No one, including DR contests the math you are referencing.
Posted on 1/10/20 at 1:37 pm to PearlJam
quote:
No one, including DR contests the math you are referencing.
so he knowingly gives misleading advice...got it
Posted on 1/10/20 at 2:09 pm to PearlJam
quote:
You say you understand, but you continue to post silly comments indicating that you actually don't
He understands. He’s just trolling. People keep playing along, so he childishly keeps doing it. The horse was beaten to death many posts ago. There’s just a carcass rotting on the ground now. But it’s Friday, so I guess it’s O-T Lounge time here too.
Here’s the number to the Harvard Business Review: 617-783-7400. Rather than waste time playing with him here, let him call the researchers and tell them that their study results are incorrect and they’re giving “bad advice”. Maybe they can help him to understand that this *behavioral* study wasn’t reliant on the math skills of the subjects. But... probably not.
Posted on 1/10/20 at 2:39 pm to iAmBatman
quote:
Time Value of Money
Compounding Interest
He was talking about evidence of chances of actually paying down the debt as opposed to quitting.
Posted on 1/11/20 at 8:41 pm to iAmBatman
You also are assuming that in every case the lowest balance also does not have the highest interest rate.
No dog in this hunt but it could very well be possible that someone’s lowest balance has a High interest rate. Especially if they have maybe exhausted normal credit lines and are using pay day loans or guys named Tony.
No dog in this hunt but it could very well be possible that someone’s lowest balance has a High interest rate. Especially if they have maybe exhausted normal credit lines and are using pay day loans or guys named Tony.
Posted on 1/12/20 at 8:13 am to BlackenedOut
quote:
You also are assuming that in every case the lowest balance also does not have the highest interest rate.
It is irrelevant to the debt snowball. The point isn't to min/max - the point is momentum. The smallest balance should be the easiest to retire - whether the rate is really high or really low.
Focus on the target, eliminate the target and move on. Eliminate the smallest balance, then focus on the "new" smallest balance. While the rate technically will make a difference, it will probably be negligible in the context of the snowball.
And, again, it will work for 90%+ of Americans with consumer debt. It will work for those folks every time.
Posted on 1/12/20 at 8:58 am to iAmBatman
quote:
so he knowingly gives misleading advice...got it
Posted on 1/12/20 at 9:25 am to Fat Bastard
Watch the wit, insight, and humor up in this thread. They don't appreciate much. This is serious.
With love,
Not a Ramsey follower
With love,
Not a Ramsey follower
Posted on 1/15/20 at 10:17 am to RidiculousHype
quote:I'm with Ramsey on the car note.
Dave Ramsey's advice to pay off a car loan, rather than invest
House notes (at least up to deductibility limits) are a different animal though. Lower home loan rates plus tax deductibility significantly shift the argument toward not paying off the loan.
Posted on 1/15/20 at 10:24 am to NC_Tigah
quote:
I'm with Ramsey on the car note.
If you could borrow at 4% on a car loan and invest and earn 8% in the market, why would you not take advantage of that spread?
Posted on 1/15/20 at 11:04 am to iAmBatman
I don't take advantage on every spread. Do you refinance and cash out your house every time you get 20% or so equity and invest in the market? Not everything needs to be financed and money thrown in the market.
Posted on 1/15/20 at 11:06 am to iAmBatman
Nah, man! Why waste time with small potatoes car loans? You can borrow $3.5 million at 2.18% from Interactive Brokers. Can't swing quite that much? OK, how about $300K at 2.72%? You'll be knocking down mo money, mo money, mo money in no time, what with that steady and consistent ( ) AVERAGE annual 8% return that you fellers keep quotin'.
We need to get these debt-free folks takin' out margin loans, HELOCs... maybe even some interest free credit card offers, so that they can make some real money.
Woo! Yeah man!
) AVERAGE annual 8% return that you fellers keep quotin'. We need to get these debt-free folks takin' out margin loans, HELOCs... maybe even some interest free credit card offers, so that they can make some real money.
Woo! Yeah man!
Posted on 1/15/20 at 11:34 am to tigersfan1989
quote:
Do you refinance and cash out your house every time you get 20% or so equity and invest in the market?
Homes are typically an appreciating asset while cars rarely are so you're essentially using leverage (a mortgage) to increase your total return. There is also a cost associated with refinancing your home which would decrease the amount of equity you would be left with.
Posted on 1/15/20 at 12:00 pm to NC_Tigah
quote:
House notes (at least up to deductibility limits) are a different animal though. Lower home loan rates plus tax deductibility significantly shift the argument toward not paying off the loan.
The math has changed a lot with tax reform and continued low interest rates. This isn't the slam dunk it once was.
Posted on 1/15/20 at 12:03 pm to tigersfan1989
quote:
Do you refinance and cash out your house every time you get 20% or so equity and invest in the market? Not everything needs to be financed and money thrown in the market.
I knew a financial guy around 2003 - 2005 that was advocating this exact strategy - consistently (as much as they will let you) take out your home equity and invest it.
I hadn't seen him since 2005 but I wonder how his clients did when the stock market and housing market both went to shite in 2008 - 2009.
Posted on 1/15/20 at 12:33 pm to iAmBatman
I'd rather have a paid off car if i got laid off rather than stuck with a payment. I don't want to be forced to sell stock/mutual fund for a possible loss in order to cover my car loan while i'm unemployed. I agree long term the market has a good return but thats long term and when you can control when you withdrawal it. Your said "car fund" is underwater from your car note in that case.
Posted on 1/15/20 at 3:11 pm to tigersfan1989
You won't have any cash or liquid assets to eat if you pay all in cash and don't have any investment savings. Car is much more illiquid too and you would also have to deal with deprecation.
Your argument is heavily flawed.
Your argument is heavily flawed.
This post was edited on 1/15/20 at 3:12 pm
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