Start paying cash for cars

Attached is a YouTube video by Dave Ramsey that I found very intriguing. He suggests that people need to get off this Merry go round of revolving car leases/car payments. Most people know that investing money in a depreciating asset is not a great idea. But many people are stuck in this vicious circle and have come to accept that a car payment is a way of life, much like taxes.  One could argue that there maybe are some flaws in his logic, such as the assumption of a 12% annualized return on an average mutual fund, or the ability to get such high returns while still periodically removing 12 – 18,000$ of the principal. However, the basic premise is very sound. Stop paying finance charges on a depreciating assets and pay cash for them. Plan and save for these large purchases by being disciplined and let your money work for you.

 

– SFP Webmaster, 26-Oct-2010

Share this article:
Posted in

Have questions? We’re here for you. Let’s talk.