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Taking Advantage of Debt

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    #31
    Indeed a leading question to say the least... i feel that those who borrow to ustilise the money may as well head down the casino and place it on red or black... Personally and with the value of heinsight I would disagree that borrowing to make money has now lead to the down turn in the economy, sub prime crisis in America, has seen major Banks go down the pan... How can you spend what you dont have?

    Surely the super rich which is talked about in the first post borrow against their massive income and have the money to back up thier big plans... if you dont have the cash cushion behind you then dont gamble with other people money... other wise you will be requiring debt management facilities soon enough!

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      #32
      Proper use of debt:

      I borrowed 19,000 dollars from my credit cards (Two card both 0% interest until Jul 09) to pay on my SUV (5.1% Interest).

      I have 10,000 dollars in a savings account earning 10% annually (Savings Deposit Program for deployed Soldiers). I will have 11,000 by the time I pull it out in February.

      I also have other sources of garenteed income to cover the rest that I will not be able to get to until after I retern from this deployment.

      Effectivly I am earning 5.1% on the 19,000 by saving the interest payments.

      I am earning 10% annualy on the $10,000 (2.5% quarterly which is about 83 dollars per month).

      By 15 Dec I will have the SUV paid in full, in 18 months (From a 72 month loan). I only reciently decided to pay down on the SUV because of the economy and I was affraid that the cc peeps would start my interest. So, that 19,000 was sitting in ING at least curbing my monthly interest on the SUV until I decided to pay off the truck.

      This was the smarted decision I could come up with given the situation, there are probably other opinions.

      I also use my credit card for everything I can (I wish I could figure out how to put my mortgage on the card). I will have the credit cards paid in full in February, we'll will have the money to pay them in full. I may let the money sit in ING until the interest rate kicks on in July and earn the 50 bucks a month for free.

      Thanks cc peeps,
      Ray

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        #33
        How do you get a loan for 30k at 1%apy? I would sign up in a minute.

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          #34
          YEah, I wasn't aware this was an anti-debt board.

          I am pretty anti-debt, BUT

          *Earn about 3% cash back on every credit card purchase - so yeah, use it for everything (as many mentioned).

          *Borrowed around $25k at 0% for a year and earned almost 6% in the bank - just paid back all those balance transfers since interest rates had dropped so much - no longer really worthwhile.

          *I have a mortgage - it's always been cheaper than renting where we live - and we hope to have it paid off in our 40s (so no rent or mortgage for many decades we hope)

          *Cars - the only other thing we ever borrowed for was cars. We've borrowed $10k over the last 15 years since we started driving. Couldn't have gotten into my first car without a loan. Nor the second one when the first gave out right when I graduated college.

          Of course my goal is to never borrow again, but I am not opposed to earning rewards or leveraging 0% interest loans. If I had to borrow a small sum for a car, I wouldn't sweat it. I wouldn't go out and buy a brand new car if I had little cash for a car. I wouldn't get a mortgage that was an ARM or 10 times my income. But I certainly believe in moderate amounts of debt while young and starting out. & I will always be open to credit card rewards an 0% loans.

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