SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Mish's Global Economic Trend Analysis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: mishedlo who wrote (91210)12/5/2008 3:57:12 PM
From: Aggie  Read Replies (2) of 116555
 
-OT- The Debt Free Life.

I remember first studying Time Value of Money in Petroleum Economics class. Having studied the evaluation of petroleum prospects for investment, out of interest I applied the 'e' function to the idea of obtaining a loan for a new car.

Wow! The lights came on, big time. Conclusion: Suffer for about 3 years with the old wreck, making "payments" to my own interest-bearing savings account, then buy the new car with cash. This, instead of taking the new car now on a 5-year loan with the same monthly payments - same except for the 2 extra years, that is.

Since then, I must have shown this to at least 50 people who are stuck in the debt rut. They have no clue how monthly payments are derived, no sense about debt other than to do their shopping based on what monthly payment they can afford. It never fails to amaze these folks when they see what banking the money themselves can do.

Sadly, most of them could not stand to defer the gratification.
The system is just too encouraging to have it NOW, pay it LATER.

If there is one thing a parent should absolutely do, it is to teach this concept (i.e. how loans are structured) to your kids. I will be, once they are old enough that's for sure - living without debt is the biggest life advantage one can teach.

Debt free for the past 15 years but thinking about 4.5% and a new house right about now......

Regards,

Aggie
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News