somebody talk me out of this (car related)

With a rate that low, why put that much down? If you can find a rate that low for a used car then I would finance as much as they let you and keep the cash on hand for an emergency. You can always pay more but they aren't going to give you any of that down payment back if you get in a financial jam. Just my 2 cents.

Why not? 2% interest on 10K for, say, 24 months is all of ~$210. This won't dink your credit one damn bit, payment is prob ~$425. If you have no other debt, why wouldn't you borrow this modest amount and keep your cash on hand for other purposes?

Again, is it worth $210 in interest for the peace of mind of still having $10K on hand for emergencies, etc?

Repeat after me: not all debt is bad.

If you want to play it really safe, there are some high yield (3+%) credit union checking accounts out there for balances under $10,000.

You would pocket the 1% difference and have liquid capital

quote:

---

I just cringe at the thought of a monthly payment.

---

So make the loan term as short as possible. You can easily get a 12 or 24 mo repayment schedule.

Think about it this way: if you have the capital on hand, you can at any time pay off the loan. So if your circumstances change 6 mos into the loan (say you get a higher paying job, or your wife gets a promotion), you can always pay it off early. And conversely, if she gets laid off or you don't pass the bar on the first go-round, you will be happy to have that chunk of change still in the bank.

Do you plan to pay cash for a house? A monthly payment or debt does not mean you are undisciplined or foolhardy: you are simply paying a little for the privilege of using someone else's money for a short period of time. Meanwhile, your money can be working for you. As the previous poster mentioned, you can pretty easily find a guaranteed 3% return on $10K, so you can cover the small amount of interest paid and earn a tiny bit more.

Meanwhile, go sign up for a personal finance course. No practicing attorney should avoid understanding money matters. From community property settlements, to structured settlements from PI, to following the money on RICO cases...your legal career will only benefit if you develop a more nuanced appreciation of finance than "debt is bad".

This all makes logical sense to me, I just need to get over it. I intend to pay cash for the investment property upon graduation.

This may be a dumb question, but when a hard pull is done for an auto loan do you have a Grace period where The additional pulls do not have an effect? Similar to a hard pull for a mortgage.

quote:

---

Creamer

---

quote:

---

I am currently in law school (too late to talk me out of this) wife makes great money, we are looking to get a new car in the next few months. By new I mean used and under $20k. we can pay cash and still be fine financially, but I am debating putting 10k down and financing 10k at 2%. The reason for this is to keep cash on hand for purchasing investment properties as soon as I graduate. Is my reasoning flawed here? I don't feel good about losing this, but haven't talked myself out of it. I have no other debt.

---

So my flash thoughts:

2% is fantastic. Why not finance 15K if you can do that? My note on financing 16K on a new car at .9% was $295/month for 60 mo term. That's an outstanding monthly note amount if you ask me. Especially if you're going to be making more money shortly thereafter.

But what about the investment property deal? You're essentially going to be leaving yourself with zero nest-egg if you plow it all into that, and with the student loans coming due, while you're going to be making money, the lack of a safety net there with Sallie Mae, the car note and costs with rental units is fairly worrisome if you ask me.

quote:

---

This all makes logical sense to me, I just need to get over it. I intend to pay cash for the investment property upon graduation.

This may be a dumb question, but when a hard pull is done for an auto loan do you have a Grace period where The additional pulls do not have an effect? Similar to a hard pull for a mortgage.

---

Stahp already with the worry about the impact of the pulls on your credit. You need to establish a payment history with someone, somewhere, on something. Borrowing $15K for a car is not going to hugely impact your ability to borrow other monies based on your credit score/number of inquiries...what will matter is your income & assets.

Again, start reading some personal finance books/quality websites if you don't want to take a whole class. You need a better grasp of how credit works before you dip your toes into real estate investing (or practicing law). And you can break up your bar exam study with some personal finance study, LOL.

Borrow now, start paying it off. You'll have it paid off before you know it and your credit will improve as a result. Having no debt doesn't make you better or smarter than anyone else. Plenty of extraordinary successful people borrow money all the time: it is hard to grow a business in a pure cash circumstance.

quote:

---

break up your bar exam study with some personal finance study, LOL. 

---

Haha, break up the studying with something enjoyable.

Did the Wharton thing on here recently have personal finance classes? If so, Is that adviseable?

I'm a week behind on the Marketing Class and it's been really interesting. Going over the basics so far. The Operations Management Class is open an in Week 1 right now, too. I think the Accounting Class hasn't begun yet.