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Credit is fine if the interest rate is low and you aren't stretching yourself financially. I could've bought my car in cash if I wanted to but at a 2.5% intere
by elindbe2 6y ago
Credit is fine if the interest rate is low and you aren't stretching yourself financially. I could've bought my car in cash if I wanted to but at a 2.5% interest rate I figured why bother, that's almost nothing after inflation. I might as well just keep the money invested in the market.
- H8crilA 6y agoWhy don't you just borrow money to buy stocks, without involving the car? You can get lower rate if you use your own stocks as collateral, i.e. if you use brokerage margin. Heck, these days margin lending is so crazy common that there are even ETFs that package leveraged equities for you to go anywhere between -300% via 0% to 300% long, just change the allocation with a few clicks (or taps on your phone).
- smallnamespace 6y agoLeveraged ETFs returns diverge rapidly from the package of equity + margin loan since the former rebalance daily. Leveraged ETFs are almost never appropriate except to monetize a very short term view.
- nicbou 6y agoThe obligation is fixed, but the future is not. This is the real danger.