I'm in my forties as well, I just brought a new TRD and I financed. This why my investments earn me more money a year , than the interests of my loan a 2% for 4years. example 2 % × 38k = $760 , my investments make avg of 15% ×38k = $5,700 ($5700-$760 = $4,940 Difference a year totaling $19,760 for the live of the loan by leaving the money in the investment. I do what my financial planner tells me !
Does than math make sense ?
The the vehicle depreciate the same if you pay for it or you finance it, so paying $ doesn't make a difference.
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I’m glad you feel good about it. Most financial planners will agree with you, and most have debt. Also, most will attempt to make sense of tax write offs for interest among many other things I disagree with. Leverage doesn’t factor in risk, which you can’t quantify, but millions of Americans practicing your method got crushed in 08-09 by running out of other peoples money.
For me, when I pay cash, it means I can invest 100% of my money. So in your scenario above I would have $5700 of investment returns and zero in my cost of capital leaving me with all $5700 to reinvest and compound over time and build wealth.
For me, the math works when I own and control 100% of my things and earn 100% of my returns. So far it’s worked, no debt, lots of toys, a nice paid for house, a significant net-worth, and no risk - all by 42.
As far as depreciation, you are paying interest on an asset which is going down in value. I don’t care what degrees you have or profession you are in, that math will never make sense to me. You essentially pay a penalty - interest - while the value diminishes. When you pay cash, you are not paying a fee to have the value goes down.
You do what feels best for you, I’ll stick with my math and what feels best for me.
I think we can all agree, 4Runners are Bad A$$ whether they are leased, financed or paid for in cash!
Happy to continue the conversation, but not going to litter up this thread. Maybe [MENTION=66316]1engineer[/MENTION] or another mod can move to off-topic.
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