 Im on the verge of gettign evicted if I dont come up with 2000 in a week? |
| What can i do??? I have 2 jobs but neither of them pays enough to get a payday loan my credit is shot( not my fault identity theft) plus im paying for college.. What should i do?? Loan Sharks? ... |
|
 How do you save money to relocate to another state, if you are living paycheck to paycheck? |
| I am hoping to relocate to another state after finding a new job that pays the same or more than I make now. I am living paycheck to paycheck due to extensive debt and expenses due to the cost of ... |
|
 If you had one-million dollars do you think you can use it all in one day? |
someone in my class asked that and i want to know yuor answer
Additional Details
oh i spelled your ... |
|
 Should i sign off benefits and work for the exact same money? |
| I was wondering should i work for the exact same money i get on benefits . Please give feedback as to ... |
|
 I got a mail from uk lottery N i won 500000pound but i think its wrong.It's can fraud or not .tell me pls.nr |
| sir actually i won prizez of my e-id and they told me i was selecting for winner and they want to give mecheque of my payment. but before that they wants their courier charges first. can it's ... |
|
 I just opened a bank account, what is the difference between credit and debit? |
| i opened a checking account and just got my debit card. when you use it, what is the difference between credit and debit?... |
|
 How long should it take for a loan approval? |
| i applied for a loan last week and i was told that it needed to be sent off for approval, i still havent heard anything back yet and id like to know what the situation is but I dont want to seem ... |
|
 Post dated cheque query? |
I gave a post dated cheque to a company and they presented it before the date!!
It was dated for the 18th of this month, however, it has left my account today, meaning that they presented ... |
|
 What would you do with a million dollars? |
If you think about it, a million dollars isn't a lot these days.
But I would defs buy a house and car, then get a massage chair ahha
Additional Details
Woooo, I wish someone ... |
|
 Has anyone just received an email from nat west? |
| if so dont respond,it seems to be a con,they are asking for your username,pin.and password,I have reported this and even nat west beleive it to be dodgey,you can forward this to nwolb@natwest.com for ... |
|
 In todays time is it possible for a family of 4 to live off of $45,000 comfortably? |
| I'm looking to put a budget in place without using my wifes income and overtime from my job.... |
|
 What would you do with 6 million dollars? |
| If you won the lottery, what would you do with the money?... |
|
 Debt management what did you do? |
| We are thinking about getting a debt management plan put in place but where do we start? So many people are telling us different things but not of them have been through it! Has anyone gone through IV... |
|
 True or false? you can get rich from a stupid idea? |
| if so name some stupid ideas that have already come true! no way !... |
|
|  |
Joe_123 | I have an opportunity to either 1) Pay off my car loan or 2) Invest this amount? |
Is it better to pay off a car loan and avoid interest payments or use this money to invest with the market the way it is? |
 |
 
Goonhilda
 |
If it's a car loan, the interest should be pretty high. Even if you invested the money, I'm sure you wouldn't get the same return on it as you are losing in interest on the loan.
For example.
Say you have a car loan for $10000 at 9%. That's costing you 9% interest per year on every dollar borrowed.
If you invest the money, it's unlikely that you'd get 9%. However, to come out in front, you'd actually need to earn more like 12%, because the interest you recieve is taxable income, and you'd have to pay tax on it. So that isn't as cost effective as putting the money on the car loan. Every dollar extra you put on the car loan in the above example would save you money.
Paying off the car loan instantly saves you a regular expense. That frees up money you can save to invest down the track. Forget trying to 'time the market'. You'll end up losing money if you invest now and are still making car payments. If you've got outstanding debt, your priority needs to be clearing the debt, not investing. The debt is eating your money and sabotaging your efforts to save and invest.
Pay off the car loan. Set a time frame to save what you'd normally pay off the car loan into another account for the rest of the time you would have had the loan. For instance, if you've still got 12 months on the loan, but can pay it out now, save what you'd be paying on the loan for that 12 months, then invest it. The plus side to doing this means that for 12 months, you've been earning some bank interest in your favour on that savings, which you wouldn't have earned if you'd just kept the loan and invested the money, which could have done very poorly in the market.
Go to your bank and ask if they have a financial planner on staff. Usually they do, and it's a free service if you have an account there. They can give you an idea of what products to invest in that might do better at the moment than investing in the stock market directly.
Best wishes. |
|
mariethebeautiful
|
pay off debt so you're not accumulating more interest....take your car note money that is now free and invest it when you can |
|
Cate
|
All will depend on what interest rate your car loan is at. If it is at a low interest rate than no. But if its high (higher than say 5%) than yes, pay it off.
Wish you had given more info so we knew how much you have left to pay off.
Stock market looks good to invest in right now but I wouldn't expect it to gain alot in the next year. If possible, pay your car off first, then invest...........if it'll happen in the next year that is. |
|
frak1a12345
 |
Pay off your car loan. Investing is something you should do with excess funds. |
|
jaha
|
Pay off the car loan.., |
|
financegal27
|
Pay off your car loan. |
|
STEVEN F
 |
If you owned the car free and clear, would you borrow the amount in question against the car to invest?
What is the difference?
Answer (to MY question): Investing instead of paying off a loan is the SAME as borrowing to invest. |
|
teresathegreat
 |
Pay of the car loan, definitely. Unless you can find a secure investment that offers a higher rate of return than you are currently paying in interest, you'll just lose money by not paying off the debt.
Few investments can offer a reliable return that is higher than your interest payment. For example, let's say you owe $1000 on the car, with an 8% interest rate. After the first month you owe $1080; after the second month you owe $1166, and so on... the amount just keeps growing, because you have to pay interest on the previous interest.
If you were sure you could earn, say 20% interest on an investment, then yeah, that would be a great choice, because 20% minus 8% still gives you 12% profit. But you just won't find any reliable, short-term investment like that. You're far more likely to lose money over the short term.
The stock market is best for long-term investing, because it historically goes up over the long-term (decades). In the short-term, it goes up and down dramatically, but not even the most educated stock brokers can reliably predict what and when. |
|
David M
|
Pay off the debt. A guaranteed 8-10% return on your money. Today (2/29) the Dow tanked over 300 points. Not much of a guarantee there. Once the debt is paid off, invest slowly in the market. Good luck! |
|
☆Laura☆
 |
I'd say pay off your car loan so you don't have to worry about that and avoid interest. Especially when the market isn't so good, it's not worth it to risk it. |
|
Sally Tomato
|
Pay off the loan. I work in finance and the market isn't going anywhere right now. If you invested, you'd probably be losing money right now. After you pay off your car, start saving. Once all this recession talk is over, the market may start to go up again. |
|
Chris C
|
Debts aren't always bad. If you can use other peoples money to accumulate things and you are ending up ahead at the end of the day, use credit to your advantage.
To answer your question, it depends what the interest rate on the loan is compared to the return on investment.
If the rate of return is higher than the loan plus the inflation rate, invest. If the rate of return is less than the loan plus the inflation rate, pay out the loan.
Rate of Return - inflation rate - loan interest rate = X
If X is a positive number, invest. If X is a negative number, pay out the car loan.
What that means is, if at the end of the day you aren't earning enough return to exceed what you are paying in debt interest and keeping up with inflation, you are losing money/buying power by investing.
IE:
Car loan: 4% dealer financing
Investment return: 10%
Inflation rate: 3% (normally that's the average most people use)
10 - 4 - 3 = 3%....this is a good investments
Car loan: 4% dealer financing
Investment Return: 6%
Inflation rate: 3%
6 - 4 - 3 = -1%....this is not a good investment. |
|
Ryan
|
Either way, you are making a wise decision and should be proud of yourself for thinking this way.
I actually recently wrote an article called "should i really become debt free." People left some interesting comments that you may find helpful.
One thing to consider is:
If you invest the money in a tax sheltered IRA or 401k instead of paying off the loan, you are investing pre-tax money, which lowers your realized income - which means you pay less income taxes. You could also take advantage of company matching programs if offered by your employer’s 401k plan.
Hope this helps! |
|
| |
|
| | |
| Questions List |
Answers | Last Post
| | | |
14 | 9 minutes(s) ago
| | | |
14 | 35 minutes(s) ago
| | | |
14 | 37 minutes(s) ago
| | | |
14 | 1 hour(s) ago
| | | |
14 | 4 hour(s) ago
| | | |
8 | 7 hour(s) ago
| | | |
13 | 10 hour(s) ago
| | | |
14 | 11 hour(s) ago
| | | |
14 | 1 day(s) ago
| | | |
14 | 2 day(s) ago
| |
|
Homepage 
Financial
Forum 
Personal Finance 
No Spam
Adult 
Gambling
Unfinished
Deception
Plagiarism
Not English
