Post subject: Re: The Stock Market/Personal Finance Thread
Posted: Mon Nov 16, 2009 8:44 pm
statistically insignificant
Joined: Mon Jan 21, 2008 10:19 pm Posts: 25134
$úñ_DëV|L wrote:
thodoks wrote:
Hey Matt...I'm looking at moving most of the money I currently have in a TARP bank to a smaller community bank. Problem is, I'm not well versed in reading balance sheets and don't really know what to look for, or what the red flags are. Advice?
Look at some credit unions.
Done and done. Some places allow potential depositors to view their balance sheet. I just need to know what I'm looking at. I only took two accounting classes back in the day.
Flipping cars is a business similar to having a used car lot. Buying low and selling high in a fairly short period of time is not an investment, it's making a market.
Yeah but he also does it with the cars he owns and drives for himself. I know what you're saying and you're right, but he makes money on his personal cars, and he's done so as long as I've known him.
_________________ "Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." -- John Steinbeck
Flipping cars is a business similar to having a used car lot. Buying low and selling high in a fairly short period of time is not an investment, it's making a market.
Yeah but he also does it with the cars he owns and drives for himself. I know what you're saying and you're right, but he makes money on his personal cars, and he's done so as long as I've known him.
You buy any depreciating asset far below it's current market value and you will make money on it. Sell me a car for $1 that's worth $20,000 and in 10 years I'll still make money on it when I sell it for $5000. I'd hardly call that an investment, more of a robbery.
Investments aren't guaranteed to depreciate every day you keep it. Stop arguing with me.
Robbery...investment...used cars...stocks, funds, etc. All the same really.
What's a good intro to finance book?
_________________ "Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." -- John Steinbeck
_________________ "Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." -- John Steinbeck
Post subject: Re: The Stock Market/Personal Finance Thread
Posted: Mon Nov 16, 2009 10:32 pm
Yeah Yeah Yeah
Joined: Sat Oct 16, 2004 10:57 pm Posts: 3332 Location: Chicago-ish
given2trade wrote:
aprilfifth wrote:
Is leasing a vehicle ever a good decision?
Sure. Questions to ask yourself:
1) Do you have a better use for the capital? It's always an opportunity cost decision. Say a new car is $50,000. Now let's say that you have the option to lease it for $750 a month or buy it outright (forget about financing a buy for the moment, that's very similar to leasing in reality). After a year I'd have spent $9000 on lease payments. If I bought the car, for argument sake, let's say its worth $45,000 (even though its worth much less but my numbers are not right here). That means you "lost" (really depreciated) $5000 of your $50,000 purchase vs. "losing" $9000 if you leased for a net loss of $4000. But, if you took that $50,000 and invested it and made 10% you would have made $5000 for a net gain of $1000 vs. buying the car.
Basically it comes down to how low the interest rates are and how much they are imbedding for depreciation in the lease. A car is NEVER an investment so owning vs. leasing only comes down to opportunity cost of capital which is basically comparing the interest rates to other investments.
In California, it also saves on taxes if you like to get new cars often as when you trade in an old car you do not get to deduct the value from the new car price when it comes to sales tax. If you lease you never have to worry about that. I actually do own my car though that's only because the interest rates offered was absurdly high on a lease.
Kam: I don't know those stocks. I do very little in oil/gas.
I agree with your argument here against buying the car, but I didn't see you factor in the equity (albeit declining) in the equation.
Post subject: Re: The Stock Market/Personal Finance Thread
Posted: Mon Nov 16, 2009 10:38 pm
Administrator
Joined: Sat Oct 16, 2004 10:51 pm Posts: 14534 Location: Mesa,AZ
Another thing to consider in the leasing question is the amount of driving you do. If you drive alot, you might have to pay an extra fee for extra mileage.
_________________
John Adams wrote:
In my many years I have come to a conclusion that one useless man is a shame, two is a law firm, and three or more is a congress.
1) Do you have a better use for the capital? It's always an opportunity cost decision. Say a new car is $50,000. Now let's say that you have the option to lease it for $750 a month or buy it outright (forget about financing a buy for the moment, that's very similar to leasing in reality). After a year I'd have spent $9000 on lease payments. If I bought the car, for argument sake, let's say its worth $45,000 (even though its worth much less but my numbers are not right here). That means you "lost" (really depreciated) $5000 of your $50,000 purchase vs. "losing" $9000 if you leased for a net loss of $4000. But, if you took that $50,000 and invested it and made 10% you would have made $5000 for a net gain of $1000 vs. buying the car.
Basically it comes down to how low the interest rates are and how much they are imbedding for depreciation in the lease. A car is NEVER an investment so owning vs. leasing only comes down to opportunity cost of capital which is basically comparing the interest rates to other investments.
In California, it also saves on taxes if you like to get new cars often as when you trade in an old car you do not get to deduct the value from the new car price when it comes to sales tax. If you lease you never have to worry about that. I actually do own my car though that's only because the interest rates offered was absurdly high on a lease.
Kam: I don't know those stocks. I do very little in oil/gas.
I agree with your argument here against buying the car, but I didn't see you factor in the equity (albeit declining) in the equation.
I did. When the car goes to $45,000 in value from $50,000 vs you investing the $50,000 and making 10% ($5000) at the end of year 1 you would either have a car worth $45,000 (equity) or $55,000 (investment + appreciation) - lease payments ($9000) = $46,000.
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Another thing to consider in the leasing question is the amount of driving you do. If you drive alot, you might have to pay an extra fee for extra mileage.
For sure. Also, if you plan on keeping the car for 10 years and running it into the ground it probably makes more sense to buy than lease.
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Post subject: Re: The Stock Market/Personal Finance Thread
Posted: Mon Nov 16, 2009 10:43 pm
Administrator
Joined: Sat Oct 16, 2004 10:51 pm Posts: 14534 Location: Mesa,AZ
given2trade wrote:
$úñ_DëV|L wrote:
Another thing to consider in the leasing question is the amount of driving you do. If you drive alot, you might have to pay an extra fee for extra mileage.
For sure. Also, if you plan on keeping the car for 10 years and running it into the ground it probably makes more sense to buy than lease.
BTW, I was trying to emphasize the fact that I posted the word "alot" in your thread, not that you'd have to drive an especially large amount of miles before you pay an extra fee.
_________________
John Adams wrote:
In my many years I have come to a conclusion that one useless man is a shame, two is a law firm, and three or more is a congress.
Another thing to consider in the leasing question is the amount of driving you do. If you drive alot, you might have to pay an extra fee for extra mileage.
For sure. Also, if you plan on keeping the car for 10 years and running it into the ground it probably makes more sense to buy than lease.
BTW, I was trying to emphasize the fact that I posted the word "alot" in your thread, not that you'd have to drive an especially large amount of miles before you pay an extra fee.
Really? I didn'tevennotice.
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