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Re: Rowing rowing down the ...

-hh
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SubjectRe: Rowing rowing down the boat gently by the sea
From-hh
Date2014-03-10 20:16 (2014-03-10 12:16)
Message-ID<edbe66ed-633e-4fd1-8105-1cadd9a7272d@googlegroups.com>
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Newsgroupscomp.sys.mac.advocacy
FollowsI hate front wheel drive, send most torque to the rear, please
I hate front wheel drive, send most torque to the rear, please wrote:

I hate front wheel drive, send most torque to the rear, please
-hh wrote:

-hh
What I'm undecided on...is how much lower would a rate need to be before leaving one's money 'at home' and using someone else's. For example, if not 12%, then how about at 8%? And if not at 8%...And so on.

I hate front wheel drive, send most torque to the rear, please
Where could you get 6% in the states if you had say 10k to invest?

It depends on your risk tolerance.

IMO, the public's perception of 'low risk' is stuff like a Government-insured (FDIC) bank saving's account or (slightly higher yield) a 'Certificate of Deposit' (CD). CDs are paying only 1%-2%; see:

<http://www.bankrate.com/cd.aspx>

For higher yield investments, the question becomes how much additional risk one is willing to incur for the promise of a higher return.

For example, one could look at stocks which pay dividends, and being topical, let's use Apple's stock: its dividend was $3.05 (per share, per quarter), which if one originally bought the stock at a nice round $500 (and we use any capital appreciation to mitigate risk) would KISS to this dividend-only based return as being: (4*$3.05/$500) = 2.44%.

To now tie this back to the question, if the loan interest rate were less than 2.44%, one could notionally* "Make A Profit" by electing to take out a loan, because the Dividends on the Stocks not sold would pay more than the loan interest due.

(* - ignoring income taxes, capital gains, etc)

If it boils down to the question of finance... ... Why waste it on something just because you are getting a good financing offer on it. It might seem like a decent value but probably it is some stale model dealers could not get off their lots.

A fair point in general, but not applicable.

-hh