New car Prices

[Rolo]

Okay, my caffienated mind could not wait...Month 60:

$262,222.57 @61% = $13,329
Car payment - $ 400

Surplus cash $12,930

If I were to maintain a 61% rate of return (which I intend to do), I would have $275,153. Indeed, Einstein was right.

I posted an Excel spreadsheet here:

http://www.techalchemy.net/rolo/PTfo.../FreeMoney.xls

Please check my work since I suck at math. Really, I do suck at math. I even used a calculator to subract those 400's above just so I would not screw this up!


The spreadsheet has 22.13% for the rate of return; that is the 5-year average return for two funds that I have held, one of which I would recommend for those who want to buy-and-forget-about-it. RSPFX is nothing fancy or risky; it is a domestic blended fund. http://quicktake.morningstar.com/Fun...hsection=quote

If I bought mt PT and RSPFX five years ago today, I would have paid $304 for it over five years, or about $5/month. That's neat!

This same logic applies to mortgages also.

[Rolo]

quote:Originally posted by PTucker

I dont think I could have much fun in a lambo for more than a day or 2. If you think about it, the lambos have like 3-4 other cars it can really race. Racing a riced out civic in a lambo wouldnt be any fun. None of the sports cars(SS, Cobra, Sti, Evo) even have a shot of beating an exotic. So they wouldnt even try.


I would rather a debadged SS or Cobra than a $100k+ car. You would have much more races.



I have the most fun when I beat a car that thought he could win.

That is a good point. Plus, much of the fun is in the tuning and seeing what you can get your car to do. I do not think there is much room for that with, say, a Diablo. I still wanna own both, heh.

[Rolo]

quote:Originally posted by quicksilverdon

I was with you up to that paragraph - That's "voodoo economics". Going from a surplus to the largest debt ever is not good. If you are saying it's not the largest debt ever as a % of GDP income, granted, but it is far from a mistake to be alarmed and concerned about it.

That voodoo economics is called prosperity.

If at the end of my 60 months I bought the $250K Ferrari, your logic would mandate that I be "alarmed and concerned" over my "increased debt" (from $21.5K to $250K). Those who look for crises everywhere as an excuse for bigger government would scream "The debt is over TEN TIMES (11.6x) what it was five years ago!" while being silent of the fact that total income has increased eighteen-fold, as I would then have $13K income the first month versus $693. These naysayers would then want to tax this "voodoo" income to death and redistribute it first into their own pocketbooks, then to special interest groups. Additionally, my $4K+ payments would leave me with more surplus cash, as a percentage, than the $400 payment did. Would you really be more alarmed by keeping 66% of $13K than you would be by keeping 42% of $700? Because that is what you are saying.

(heh, sorry, politics used to be a hobby of mine several years ago )

The percentage is what matters, not the dollar amount. It's not what you make (amount), but what you keep (percentage).

Paying cash gets me nothing.
Having a debt can get me a free PT and a Ferrari in five years, plus still having $275K cash on-hand. (61%)
Or it could get me the free PT and enough cash to buy another one in five years. (23%, RSPFX)
Or, using the stock market historical return of 11.06%, it could get me a free PT plus $5500 that I would not have had if I paid in cash.

That is how money works. Frankly, I wish I had known this fifteen years ago!

[Rolo]

Man, if the "star" system under our names was based on word-count rather than posts, I'd have you all beat! ehehehehe

Now I am going to bed with Steve Forbes.

[the magazine!]

[quicksilverdon]

quote:Originally posted by Rolo

That voodoo economics is called prosperity.

I truly hope your luck continues.

Many DotCom businesses no longer exist as a result of following that philosophy. Were you around when interest rates were 16-18% in the late '80s? I do and don't want that to return, that's all.

[Rolo]

quote:Originally posted by quicksilverdon

I truly hope your luck continues.

Many DotCom businesses no longer exist as a result of following that philosophy. Were you around when interest rates were 16-18% in the late '80s? I do and don't want that to return, that's all.

...and gold was over $800/ounce and the Misery Index (inflation + unemployment) was created thanks to bubba Jimmy, for both were running rampant. Yes I was around, albeit about to hit adolescence, but I remember that. At least the former president is building houses now for the people he put there.


Thomas Jefferson said that the harder he works, the luckier he gets. I can see his reasoning, and Gary probably does too. "Speculate" is an often misunderstood term. It is not "gambling". My question to myself is not "Can I double my money every year?", but rather "HOW can I double my money every year." and being dynamic. Yes, it is a bit of a lofty goal, but "I would rather fail at something difficult than succeed in something easy." (Jesse James)


Those Dot-Com businesses are gone because they failed to make a profit, just like any other business. People, caught in the latest frenzy and driven by greed, bought into empty, unsound promises. My Pets.com sock puppet on my desk is a testament to that. Wonderful marketing, but crap for a business plan.

Peter Lynch, in his most excellent book One Up on Wall Street, graphed the tech bubble of 2000 on the same chart as the crash of 1929. They were nearly identical, to the day. Then there is the Dutch tulip bulb craze in the 17th century...three million dollars for a freakin' tulip bulb! Markets may change, but human nature will always stay the same.


Incidentally, I believe now is a good time to load up on Sirius Satellite Radio (SIRI, $2.70).

[R.E.]

OK Rolo, I understand now how it works. I take back my insinuation that you might work for ENRON. Sounds like you've got it goin' on and wish I had the knowledge and patience to try something like that. I also got a rate on my car loan I thought was good enough to do it that way and keep my own money. However, about all I'm doing is breaking even, but I still have my own money to spend! Plus, at my age there's a good chance I'll die before the Cruiser's paid for and then I'll really make out.[?]