Quote:
Originally Posted by BK001
Yes. There is debt and there is debt. That's why I have always taken advantage of "zero" finance deals on large appliances even though I always had the money to pay off in full. For us there was never the danger that we would blow the money. But not so for everyone. I don't think we've paid any interest (other than mortgage) in 30 or 40 years.
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You make an excellent point, that if you are using someone else's low/no interest loans, you need to ensure that you're making the money you didn't spend...work for you in other opportunities.
It makes no sense to use the cash saved, to purchase additional items that are often not a
'need,' just a
'want'...instead of investing it.
It's analogous to using excessive tax withholding as a 'forced' savings account...for those that don't trust themselves not to spend it during the year.
Sure, it's nice to get that refund from last years taxes, but a person has to realize that you're basically giving the government a tax free loan...for the entire year.
Whereas, people could have been using that additional money from each paycheck, investing it and they would have more money for the entire year...than your tax refund alone amounts to.
"Compounding interest"...is a wonderful thing. 