Quote:
Originally Posted by SkyZ
hehe in that case it turns into a mathematics thing. ur expected gains in this economy vs the savings if you put that money into your downpayment rather than investing it.
simple matter to calculate it all it depends on is the rates he gets.
oh and factor in risk i guess as well. all opportunity cost
btw to make this clear i in no way disagree with you. just my investments are kinda flatlining right now so im not too sure about the economy.
edit: one word i dont get in there CD, seems like an important thing, is it some sort of stable investment (government bond type thing)? |
No, I agree for sure (I work for one of the largest investment companies in the world, not a broker or anything, though)... but I just mean he shouldn't leave himself with absolutely no money saved away. Might as well keep a chunk of it and invest it, even if he spends it on paying off the car later; at least he's got it if he needs it.
A CD (Certificate of Deposit) is a relatively low-yield, guaranteed return investment which earns you a certain percentage of interest and pays you a return after a certain period (usually a few months to a few years). Basically, you're loaning money to a particular bank to invest or to use to loan money to other people. It's like a fixed-period savings account that pays you more than $5.00/year.
