Should I Invest or Pay Off My Car Loan Early?
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- Опубліковано 15 жов 2024
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In this video we are talking about whether or not you should invest or pay off my auto loan? To answer this question COMPLETELY and COMPREHENSIVELY, you cannot just focus on the math. Additionally you have to include the emotions and psychology. We will do BOTH in this video.
I could not agree more with you Joe. Debt is crushing!!! I have been trying to do both but honestly every time a debt disappears it feels amazing. Another absolutely fantastic video!!!
Paying of the car loan increases your cash flow
I like how you have ideas about different scenarios, but also point out the human factors.. Good stuff.
For what ? Retirement correct?
Great video, is it possible to make that spreadsheet available. It’s really helpful. The math makes having the loan easier and waiting to pay it off. Would you recommend that option if you also have the cash available to pay off the loan at any time?
Can you make your spreadsheet downloadable? I was hoping to plug in a 2.19 Interest rate on a 30k car loan. Excellent video by the way!
If the stress of debt is that crushing upon you, I'd pay iff the car asap stress can negatively impact your physical health, cause poor performance at work and at home. Less stress, stronger health
I like this scenario. However, not once did you mention the depreciation of said vehicle. Also, I think the question needs to be asked, "Would you borrow money to invest?" I know I wouldn't and investing without paying the car off as fast as possible is doing just that. Great topic for discussion.
Scott That is a GREAT POINT and in hindsight I wish I’d addressed that. You’re right! THANK YOU for the feedback!
Hmmmm..🤔 very good point
in the current market inflation is drivng used car prices way up. car that was worth 10 k last year is now 15
Exactly what i wanted to see.. Thank you!!
You are welcome! THANK YOU for watching Ishan and for leaving your $0.02 in the comments! 😎👍🏻
The old adage that debt is only useful to those who don't need it rings true.
Especially for an auto, a liability, loan, I would only consider holding onto the debt it I literally had savings to just pay it off or a level close to that. Then it is just a tactical decision based on the interest rate, which is bound to be low at that point.
The only disagreement I'd hav is making sure you have a 6 months savings first. Having your car repossessed but enough savings for rent and food before you can get a new gig sounds like a good trade.
Pay car loan early
Hm
One thing that wasn't mentioned - at some point, the amount you have invested will be equal to the amount you owe on the car. At that point you could consider it to be as good as paid off. I bet it happens slightly sooner than just paying off the loan too.
My car is 7 % interest,I invest a very small portion besides my 401k on the job..I pay double on my car loan,calculated being payoff within a yr..
AWESOME! Keep up the GREAT WORK! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍🏻
The only discussion I would like to start is what if u have to take money out of a index fund to pay for the car in cash or something like that. Your rate of return would drastically decrease due to the fund starting at much lower rate. Starting this at 50,000 vs 30,000 (assuming a 20,000 car purchase) would yield much different results
If you have a low interest auto loan, say less than 3%.. I wouldn't pay it off. The rate of inflation is much higher. Invest and just pay the loan with weaker dollars.. 🤷♂️
This is interesting as I have just bought a car and I'm still investing.
THANK YOU for weighing in with a comment! =) I appreciate it!
I owe $5500 on my car... Should i just pay it off in one shot?
My Autoloan is near 8%, other than that your other parameters exactly match mine! Loan is 19k 72months. I usually put 500 in Roth a month, but I messed it up holding a bag with PDBC@15.8 average, so I'd rather pay off my loan sooner and come back to Roth IRA in couple of years
This was an amazing video and you inspired me to use your format to see what would happen in a scenario of paying $20,000, $5,000 or $0 upfront and investing the difference over that same ten year period.
I owe 30 000 at 11 percent im psying 660 a month ,im investing about 1300 a month im here to see if I should pause my investments and get this loan done i have no more credit card debt im 44 yrs old so i want to go heavy in investing. With that said, let me watch this video
Can you do one about paying off your house vs investing?
I think you can still invest with a mortgage but no other consumer debt. You would also need a fully funded emergency fund. (at least 3 months)
Is it a bad idea to get a personal loan to pay off car loan . Fyi I longer want this car due to a few reasons.
What do you suggest I do
Thanks
Okay. Too many holes in the math. First, the average new car is going to be $24,000.00 to 28,000.00 in 2020. Most people are going to fall in the 5% interest bracket since covid. So $24,000 for 5 yrs. will cost $30,000, and $28,000 will cost $35,000. The second part of this is "where do you live". If you are near Detroit, where there is a lot of snow fall each year, AND TONS OF SALT on the road to help rust the vehicle, coupled with high traffic, pot hole that eat front end parts and tires, brakes and batteries, your vehicle cost will be much different over 10 years as opposed to somewhere like Knoxville, TN
In the 1st example a 36 month lease, where there is bumper to bumper warranty is far less. At 28,000, the payments are $467.00/mo., as opposed to a lease of $235.00/mo. Remember this $28,000.00 car will be worth about $1800.00 if you buy it. By leasing, if the car goes down, I drive another new car until they fix mine, and no payment for tires, batteries, brakes, etc. (I paid a little extra to have 50,000 miles in 36 months, with full warranty for 50,000 miles.)
Awesome video, very informational .
Why doesn't anyone calculate what you owe in income taxes at end of year? Part of the investment gains go to government not all to you.
Whats all that backround noise hard to focus
Great vid Joe!
Joe, is your house haunted..it's that time of year and I hear a child-ghost or two.
I didn't watch the credit card vid, or it was unremarkable. LOL Paying off a credit card only makes sense if you don't run it back up again which most do, especially in today's environment.
As for this vid, I recommend doing both as compounding is your best friend for retirement. Doesn't have to be the remainder after the car payment but at least a couple hundred/month. The faster you pay off that car the better, but let compounding do its thing.
LOL, yes life with 4 kids... THANK YOU for weighing in!
I got a question bro…I wanna sell my car, I owe 10k on it but it’s worth over 25k…should I finish paying it off first or should I sell it to a dealership and just keep the difference??…thanks
Joe. Have you done a video on when it's wise to rebalance? I am way overweight in 2 funds inside my 401k. But, I have heard rebalancing is not always a wise move depending on the account.
Good point !
What do you think about plug power stock I seen a few say buy it before it goes up????
Palintir
The CC company knows they won't make money if every customer pays them off every month. Luckily for them, plenty of consumers will not (even though everyone probably intends to when they get the card). These companies know many of us better than we know ourselves in this sense. If you don't really know yourself, using credit is playing with fire.
Credit card company make money from merchants when you buy goods or services.
As we approach a recession, I am choosing to pay off debt and invest less now.
Is this real life?
Why would you pay off 300 to have to pay 600 every month?
To pay off 8000 car with 2.5% or invest ahhhh
I'm in the same situation 🙃 though investing is great but pay off loans would feel amazing emotionally. Gotta make decision.
@@LastAirElement I’ve decided to invest in ethereum haha let’s see what happens
@@Alexanderthegreatjones worked out great? I’m in this position now. Pay off car 10k or put in ether ?
@@nolancarr3914 My investment luckily worked out better! I would invest in ada cardona instead of ether rn
@@nolancarr3914 also with currrent inflation a used car that was worth 10k in jan is now about 15k.
Go to the point bro make videos shorter
THANK YOU for the feedback Arnoldo! Yes, it’s something I’m working to do more efficiently. Check out some of my more recent videos and let me know if you think I’m improving. 👍🏻😎