Royster Posted August 26, 2004 Share Posted August 26, 2004 Neo, You are ASSUMING that your investment will produce more than the 6% (one also must calculate Federal tax for investment earnings). I am not aware of any 100% safe investment. Many traders and speculators have lost everything beting on speculation. For a clearer, undestanding please see "Old bull, Young bull" Quote Link to comment Share on other sites More sharing options...
gullahisland Posted August 26, 2004 Share Posted August 26, 2004 ---------------- On 8/26/2004 9:57:44 AM neomartic wrote: I can think of an advantage to having debt. If you have good credit and get a decent interest rate, lets just say 6% for example, then it would be wiser to take the loan and put your money in an investment earning above 6%, this would mean that you would be paying less for the car. Any how, see my point? ---------------- I see your point, but strongly disagree...particularly with the premise of buying a "new" car when a two-year-old car is every bit as good and can be purchased for (with a warranty) for 1/2 the price. But more to the point...Please tell me where you can put your money (right now) and be ASSURED a return of 6% over the next 4-5 years. That's what I thought. Quote Link to comment Share on other sites More sharing options...
Fish Posted August 26, 2004 Share Posted August 26, 2004 ---------------- On 8/26/2004 9:19:22 AM TBrennan wrote: Well it would take being in Virginia to make one want to go to Indiana. I'll tell ya, eastern Virginia is the ugliest, used-up and worn-out bit of country I've seen, worse than Texas brush country even. I wouldn't give the entire state of Virginia east of The Valley for a half-section in Champaign County. Whereas Indiana is damned near as green and fecund as Illinois. Now if it wasn't for the Hoosiers that inhabit the place.... ---------------- Tom,you can kiss my hoosier inhabitant a$$. Quote Link to comment Share on other sites More sharing options...
neomartic Posted August 26, 2004 Share Posted August 26, 2004 royster, I agree that there aren't really any 100% safe investments. However, you must understand that investing and speculation are two completely different things. Investing requires research and knowledge about your financial commitments. You invest because you see a future return on your money. Speculation is no more than gambling. gullahisland, I was just using a car loan as and example. I along with everyone else in this forum know that a car is a bad investment and you'd be better off with a less expensive, used vehicle. As for a 6% investment, that too was just an example to show that some debt can be okay and you can benefit from it. However there are some pretty decent municipal bonds that you will be able to earn better than the current average returns and they are tax-free depending on where you live. In any case, it's hard to say where the market is going, but you know that historically if you invest and prepare for the future you'll be fine for retirement. Quote Link to comment Share on other sites More sharing options...
gullahisland Posted August 26, 2004 Share Posted August 26, 2004 ---------------- On 8/26/2004 10:39:57 AM neomartic wrote: However there are some pretty decent municipal bonds that you will be able to earn better than the current average returns and they are tax-free depending on where you live. ---------------- Munis yield less than government or corporate bonds due to their tax advantage. Additionally, the degree to which they are advantageous depends on your income and tax bracket. Quote Link to comment Share on other sites More sharing options...
radiob Posted August 26, 2004 Share Posted August 26, 2004 I would definetly stay in that house for 4 more years,Its your money. Quote Link to comment Share on other sites More sharing options...
neomartic Posted August 26, 2004 Share Posted August 26, 2004 ---------------- On 8/26/2004 10:54:15 AM gullahisland wrote: Munis yield less than government or corporate bonds due to their tax advantage. Additionally, the degree to which they are advantageous depends on your income and tax bracket. ---------------- Agree 100%, but I was looking more into the tax advantage. In any case I'm still young and have much to learn, but I thoroughly enjoyed this little debate. Quote Link to comment Share on other sites More sharing options...
Royster Posted August 26, 2004 Share Posted August 26, 2004 ---------------- On 8/26/2004 10:39:57 AM neomartic wrote: royster, I agree that there aren't really any 100% safe investments. However, you must understand that investing and speculation are two completely different things. Investing requires research and knowledge about your financial commitments. You invest because you see a future return on your money. Speculation is no more than gambling. gullahisland, I was just using a car loan as and example. I along with everyone else in this forum know that a car is a bad investment and you'd be better off with a less expensive, used vehicle. As for a 6% investment, that too was just an example to show that some debt can be okay and you can benefit from it. However there are some pretty decent municipal bonds that you will be able to earn better than the current average returns and they are tax-free depending on where you live. In any case, it's hard to say where the market is going, but you know that historically if you invest and prepare for the future you'll be fine for retirement. ---------------- Neo, I fully undestand. But, your comments above a pure double talk. Investing IS speculation. Because one does research and has some knowlage about a particular investment somehow removes the risk (ie: speculation)? I think most Gamblers also expect to see a return on thier money, all be it in the houses favor to see a better return. I again refer you(youg bull), to the old, young bull story. This post kind of reminds me of the seceen in Back to School, where Sam Kennison is the professor lecturing about the VietNam war. Quote Link to comment Share on other sites More sharing options...
neomartic Posted August 26, 2004 Share Posted August 26, 2004 I still disagree. You invest over time, continually. You speculate quickly. When you go into a casino you aren't investing, you are speculating. You're taking a big risk while trying to make a quick profit. Investing isn't about a quick profit it's about being well off financially by putting your money in valuable profit seeking functions. These are the definitions from Dictionary.com. Investment - Property acquired for the purpose of producing income for its owner. Just as plants and equipment are investments for manufacturers, stocks and bonds are investments for individuals. Speculation - The taking of above-average risks to achieve above-average returns, generally during a relatively short period of time. Speculation involves buying something on the basis of its potential selling price rather than on the basis of its actual value. Notice in the definition of speculation, "buying something on the basis of its potential selling price rahter than on the basis of its actual value." A speculative risk would be like buying Martha Stewart stock right before her hearing. It's a gamble. It could go either way and you're betting what way it will go. When you invest you are purchasing something because you see actual value in it, not just because you think it might go up because of a recent news story, etc. An investment would be more along the lines of buying John Deere stock, a company that continues to earn money and grow it's shareholders wealth. Quote Link to comment Share on other sites More sharing options...
Royster Posted August 26, 2004 Share Posted August 26, 2004 Neo, Silly me. I must have overlooked your many years of investment and life experience's. I wish you well in your future endevors. Life is sooo simple for young folks. It is us oldsters that have things mixed up. Hell, two engineering degree's and a sucessful compay have taught me nothing. I am glad you could enlighten me and this board. Again, humor me and refresh my memory as to your qualifications and experence's. Kind of reminds me of another saying that good old dad used. "Young, Dumd and full of C#m" Quote Link to comment Share on other sites More sharing options...
neomartic Posted August 26, 2004 Share Posted August 26, 2004 I just wanted to have a reasonable conversation and I've felt I've backed up my arguments sufficiently. I'm not sure what your lack of thought response was supposed to do. Upset me maybe? I'm not sure. Either way, I know I'm young and I know that I've got a lot to learn and that college education can not compensate for actual experience, but I also feel that I can have an intelligent conversation with someone older/wiser/more experienced than myself. Maybe you feel differently. Sorry, didn't mean to insult you. Also, I don't want this to seem like I'm trying to take a shot at you, but most of my argument about speculation/investments was based on a finance professor I had who had his doctrine in the field. ~neo Quote Link to comment Share on other sites More sharing options...
Royster Posted August 26, 2004 Share Posted August 26, 2004 ---------------- On 8/26/2004 3:37:25 PM neomartic wrote: I just wanted to have a reasonable conversation and I've felt I've backed up my arguments sufficiently. I'm not sure what your lack of thought response was supposed to do. Upset me maybe? I'm not sure. Either way, I know I'm young and I know that I've got a lot to learn and that college education can not compensate for actual experience, but I also feel that I can have an intelligent conversation with someone older/wiser/more experienced than myself. Maybe you feel differently. Sorry, didn't mean to insult you. Also, I don't want this to seem like I'm trying to take a shot at you, but most of my argument about speculation/investments was based on a finance professor I had who had his doctrine in the field. ~neo ---------------- Neo, You prove my point. Your position is based on hear say. A doctrine in the field does not mean that the views of that person are all knowing or even accurate for that matter. Before dulling out up proven advise to others, maybe YOU should get some experience. But then again there are a lot of folks that live vicarously thru others. Quote Link to comment Share on other sites More sharing options...
neomartic Posted August 26, 2004 Share Posted August 26, 2004 This all started because I said a fixed rate mortgage is better than a variable rate, in the long run and because I said SOMETIMES having debt is not a bad thing. All else aside do you agree with those two statements? Quote Link to comment Share on other sites More sharing options...
dantfmly Posted August 26, 2004 Author Share Posted August 26, 2004 Having a house is the only debt right now that i can see as somewhat good. Cars suck, along with CC. A house gains value, where most ananything else it looses value. Quote Link to comment Share on other sites More sharing options...
Royster Posted August 26, 2004 Share Posted August 26, 2004 ---------------- On 8/26/2004 9:57:44 AM neomartic wrote: I can think of an advantage to having debt. For instance, if you have the cash to buy a car, instead of paying for it in cash right then, why not pay over 4 years. If you have good credit and get a decent interest rate, lets just say 6% for example, then it would be wiser to take the loan and put your money in an investment earning above 6%, this would mean that you would be paying less for the car. Obviously this all depends on how much cash you have on hand and what investments are available to you at the time as well as your actual quoted interest rate. Any how, see my point? ---------------- What you said is listed above. Quote Link to comment Share on other sites More sharing options...
dantfmly Posted August 26, 2004 Author Share Posted August 26, 2004 ---------------- On 8/26/2004 4:01:41 PM Royster wrote: ---------------- On 8/26/2004 9:57:44 AM neomartic wrote: I can think of an advantage to having debt. For instance, if you have the cash to buy a car, instead of paying for it in cash right then, why not pay over 4 years. If you have good credit and get a decent interest rate, lets just say 6% for example, then it would be wiser to take the loan and put your money in an investment earning above 6%, this would mean that you would be paying less for the car. Obviously this all depends on how much cash you have on hand and what investments are available to you at the time as well as your actual quoted interest rate. Any how, see my point? ---------------- What you said is listed above. ---------------- i would still rahter buy the car ouytright if i had the money and invest what i would have put into the payment, but that is just me, i would have no obligation to somebody. Quote Link to comment Share on other sites More sharing options...
Royster Posted August 26, 2004 Share Posted August 26, 2004 Finance majors and Accountants have destroyed more good companys and products than any other reason that I know of. Make it cheaper, charge more, pay employees less, provide less benifits are some of the examples of the bean counter turned manufacturing enginner and/or CEO. Quote Link to comment Share on other sites More sharing options...
Olorin Posted August 26, 2004 Share Posted August 26, 2004 I was a partner in a small company with a guy with a finance degree at the helm. The company failed because he didn't manage the money. Go figure. Quote Link to comment Share on other sites More sharing options...
Royster Posted August 26, 2004 Share Posted August 26, 2004 Thats the problem with a lot of Compays today. The bean counters forget that in the end they are selling a product. Quality and value are interlinked to large degree. But in the end the customer has to get the quality and value he feels is justified buy the purchase price. Fixed or variable loans both have so called pros and cons. But my point is that niether is without cost. Cost that is a result of debt. Again the advice of good ole dad was : There is NO advantage to debt. Quote Link to comment Share on other sites More sharing options...
dantfmly Posted August 26, 2004 Author Share Posted August 26, 2004 plus it is not all about how much money you make, it is also about how happy you are, i woould be much happier to have no payment that i owed then having a bill. When you die or get OLDer then dirt what use is all that money to you. My grandpa is always saying you have the money when you can't use it, but when you can enjoy it you never have it. I would like to just have enough when i retire not to put my family in to poor house to take care of me. Quote Link to comment Share on other sites More sharing options...
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