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Yeah but the interest is not paid upfront. You don't get the benefit of time value money. Interest laid in year 25 is paid in year 25 dollars. It makes the loss
by alistproducer2 11y ago
Yeah but the interest is not paid upfront. You don't get the benefit of time value money. Interest laid in year 25 is paid in year 25 dollars. It makes the loss calculation more complex but it does not change the fact that you still paid double for the property (at least) and will,barring a housing bubble, will never come close to recouping that money.
- hansef 11y agoBut the COST of the interest is in year 0 dollars. I may be buying Cokes in 2015 dollars, but if the price is set in 1900 dollars I'm getting a shitload more Cokes.
- alistproducer2 11y agoI get what you're saying. If everything arou.d me has gotten more expensive and assuming my wages keep up with inflation, the interest cost is cheaper in later years relative to the earlier years. Makes sense but hasn't wage and inflation growth diverged in the last couple of decades making that assumption a questionable one?