Came across this a few days ago.
http://www.barefootinvestor.com/free-cars-buying-plan/
Click it if you want, but I'll tell you right now it's crap.
I have been meaning to start writing more financial posts, about 6 are started at this point, but it takes a bit more than just saying 'OMG this car is amazing' or 'I'm selling this xyz item'. So the article above was a great impetus.
The idea was to buy a less expensive auto, in the article they mention a Holden Commidore, and sock away money, and purchase some miraculous investment that nets almost 10% per year, and replacing the car they sell with one that never goes up in value. I'm pretty sure finance doesn't work like the toilet swirls and the Northern and Southern hemisphere have the same financial rules.
Another really horrible assumption here is the rate these folks would get, 11.25%. Things here could be different in Australia, but finance is generally pretty international with LIBOR and the US Fed rate moving most of the world. At any rate here in the US I see rates for a used 2009 vehicle at or below 5% for good credit. I really doubt rates would be that much higher for loans, and that much higher for interest in a savings account.
Now we have the same problem that I had with the DARE program as a kid, they explained how bad pot was by saying once it's lit it turns in to thousands of chemicals (and chemicals are supposed to be scary). Being a wiseass I realized that was oxidation, and you light the contents of your lunchable and there will be gobs of chemicals too. (for the record, no, I don't smoke pot, but have nothing against it)
You peddle me a bunch of bullshit as an appetizer, I'm gonna walk away from the meal.
It is good to save, and it can be good to pay cash for a vehicle rather than take a loan. But that isn't always the case. What I really want to drive home is think about what you are doing, don't take these bite-sized bits of advice as defacto truth.
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