tedstr

Do You Believe Borrowing Leads to Prosperity? (Part 2)

I mostly agree but one fine point. I lease a Mercedes. About $50,000. Nicest car I ever owned or anyone in my family ever owned. My father would think me a fool for leasing this car if he were still around.

But I like it a lot. I have leased several less expense cars over the past 7-8 years. I only lease the ones that have special factory deals. The terms on these cars are great and the car companies have been taking it in the shorts on the residual values and the finance rates to move some of these slow selling cars. Meanwhile I keep the $4-$8,000 in deposit money I would have spent and leave it in a fund making money.

In December the lease was up on the Mercedes and they offered finacing to buy the car at market rates and for a price that was below book value. No cash. So I financed in for the next five years. I will be driving this car for 7.5 years and at the rate it is going, it may still look like and behave like new when I finally own it at my age then of 60.

My point is, you are right, paying cash and paying off your car is smart way to go, but it is not neccesarily a clear choice.

Quality of life matters. There are deals out there. Don't get over your head but buy smart and use some limited debt within your means to maximize your return on a life lived well.