We need a new board
- Thread starter Da_Sperm
- Start date
JROCK
Preeminent
That is rhetoric.............You will NOT get 60K of interest per year on 500K. You didn't answer the question because you can't. You will not find a secure non risk investment in America that will turn that type of profit.
Da_Sperm
New Member
First of all, there is no such thing as a non-risk investment. You put $1 in a savings account, you are RISKING your $1.
Secondly, it is very possible for a $500K investment to yeild $60K per year in interest. That is only a 12% ROI, there are TONS of mutual funds that yield 12% every year.
$500K invested into realestate would yield close to a 30% ROI.
JROCK
Preeminent
1) Savings accounts are insured up to $100,000.00. Your statement about a "$1.00 investment" is not true. Also, IRA(s) can be insured up to 250,000 but obviously is a long term investment. If the money is spreaded out in different account you should be o.k. but in actuallity you have $400,000.00 of risk exposure on $500K. The going rate for CD(s) as well as T-Bills or below 5%.
2) Mutual funds are "a risk" Your ROI is NOT guaranteed
3) Real Estate is "a risk" Your ROI is NOT guaranteed
pv_symbiotic
Ghetto Bourgeois
Sorry I mis-typed yesterday, when I said that I bought what I liked.
This is a half truth. I need to complete the thought as I answer your question.
That is not a lot for a note! Yes, I purchased what I WANTED. Also, the price of the truck is third of my salary.
The point that I am trying to make is that I bought something that I could more than afford. I laughed when I was at the dealership and the salesman was asking me what I wanted to pay and month and I only replied by asking what is the interest rate. He thought that I didn't hear his question so he repeated it, I thought that he didn't hear my reply so I did the same. I ended up clowning his ass by going and working with someone else.
The point that I am trying to make is that if the monthly note is your main concern and not the interest rate, then more than likely that isn't the vehicle for you.
Look at the long term picture and keep more money in your pocket than theirs.
Jacy
No Tests, No Testimony
Sperm (and everyone else), when using acrynoms, please define them. Those who are seek knowledge here may get turned off by those who can provide it to them. (Can we get basic glossary sticky?)
ROI=return on investment
ALPHA3
Active Member
Any investment is a risk. If you invest a dollar today, what is the present or future value based on some interest rate and term? Classic test question.
JROCK
Preeminent
In that case, I pose a question to you. Is $1.00 placed in an interest bearing account truly an investment? What is your risk of losing the $1.00 (assuming no administrative charges are involved). What is your risk of losing the yield? Classic common sense......
delock
BARBERSHOP COO
Ok, here is the short of it
Current Principal $500,000
Years to Grow: one
Interest Rate 12%
Compound Interest 5 x annually
Equal $562,949.95
So I was off by $2949.95....it's not hard to do if you are smart about it.
JROCK
Preeminent
What you have above is good in theory but not realistic. You made a statement that $60,000.00 is the yield on $500,000.00 (can one live off of that). Again, I state that you CANNOT get a guaranteed $60,000 yield on $500,000.00............Hence your premise is flawed. If you disagree, then PLEASE tell me who is going to guarantee a 12% return on this investment. :lol: :emlaugh:
Why all of the emphasis on "guaranteed"? Other than death, very little in life is "guaranteed". Yet, the ebb and flow of life goes on.
The important thing is that there ARE ways of earning 12% on your investment. Actually, it is not difficult to do when investing in stocks or real estate. Sure, there may be some volatility but there are ways to minimize the volatility (diversification, etc.).
Don't let the desire for a "sure thing" lull you into inaction. The world is dynamic - constantly in motion - and it rewards those who are able to take prudent action in the face of uncertainty.
Apaquelypse
Delta Tau 04
Hey if they can prove this, Are there 10 members on here who are not so well off who can invest 5000 dollars to make it happen for ourselves?
delock
BARBERSHOP COO
MsJag4Jag
Moderator
We live and learn! Aint no "sense" like "bought sense".... :tup:
buckwheat
Well-Known Member
I have an ING account. It's gradually growing.
buckwheat
Well-Known Member
I agree! I make sure that I get a good interest rate also. That's the most important thing.
JROCK
Preeminent
If you read the entire thread, you would know the answer to your question...... The 60K premise on $500K is not definitive therefore flawed........
My response has NOTHING to do with inactivity or discourgement of taking risk.
Da_Sperm
New Member
Well lets talk about interest rate for a second. Interest rates on loans are not always the best thing. You have to think CREATIVE.
Lets say you want to buy a car and you are concerned with the interest rate. We both have the same credit score. Lets say we want a car that cost $20K. We both have $5K in saving, but I'm not putting nothing down, and you put your entire $5K down.
You finance $15K at a 5% interest rate (putting 5K down) over 60 months and your note is $350/month.
I finance $20K at a 8% interest rate (putting $0 down) over 60 months and my note is $500/month.
I keep my $5K in account like a mutual fund that pays 10% per year. If we both lose our jobs after 12 months, I can continue to pay my note for a few months because I have $5K in the bank. You on the other hand cannot, put bought down your interest rate, but left nothing in the bank and had to start from scratch on your savings.
It isn't just about what your car note is. Think about your entire financial situation. Its not worth it to have a low interest rate if it will wipe out your savings.
Every car I buy, I put down ZERO. I have bought two houses, and I have put a total of $3000 down on them combined. Never put money down on a note that you won't miss.
Lets say you want to buy a car and you are concerned with the interest rate. We both have the same credit score. Lets say we want a car that cost $20K. We both have $5K in saving, but I'm not putting nothing down, and you put your entire $5K down.
You finance $15K at a 5% interest rate (putting 5K down) over 60 months and your note is $350/month.
I finance $20K at a 8% interest rate (putting $0 down) over 60 months and my note is $500/month.
I keep my $5K in account like a mutual fund that pays 10% per year. If we both lose our jobs after 12 months, I can continue to pay my note for a few months because I have $5K in the bank. You on the other hand cannot, put bought down your interest rate, but left nothing in the bank and had to start from scratch on your savings.
It isn't just about what your car note is. Think about your entire financial situation. Its not worth it to have a low interest rate if it will wipe out your savings.
Every car I buy, I put down ZERO. I have bought two houses, and I have put a total of $3000 down on them combined. Never put money down on a note that you won't miss.