Motorhome financing
As newbies to the RV lifestyle dream we are researching and preparing to buy our first RV. We know we want a large Class A built with high quality which with our budget means older high quality versus...
Forum Discussion
valhalla360 wrote:way2roll wrote:
So you would rather lose the $50k up front out of your own cash than amortize it and continue to let your money work for you to offset the loss?
If you lost the money...you lost the money...pretending it's better to pay 5% to realize the loss later doesn't help.
This is where the argument goes off the rails. Yes, you are paying 5% in interest (which is likely 4 or less if you are itemizing). But, you can't pretend that there is no cost to the money you took out to pay cash. If you expect that the investments will grow at 7% a year over the next 10-15 years, for example, the 'cash' you paid you are actually borrowing from yourself at a rate of 7%.
As I said earlier, one can make the argument that paying cash is a more certain investment over the market, but you can't treat cash purchases as free when comparing them to borrowing money. They come at an opportunity cost that can be quite significant.
