In Germany, 27 are in 'preventive detention' b/c they might do climate protests

Re:In Germany, 27 are in 'preventive detention' b/c they mig... by TylerE on Monday September 11, 2023 @03:06PM (#37472152)

In the US at least it has often (although not at present) been true that the interest rate on a new car loan with good credit is less than one could return from relatively safe investments. Thus the financially smart thing to do was often to finance the car, even if you could buy it outright.

Too much debt is a bad thing, but so is being excessively debt averse.

I would also say, historically, a dollar now is worth a lot more than a dollar 50 years from now, and your quality of life is probably better, too.

I see lots of people from my parents generation who saved their whole life… and now they have money but nothing to do as their health doesn’t permit the sort of travel (or outdoor activity, or whatever) they wanted while a 20 or 30-something.

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Re:In Germany, 27 are in 'preventive detention' b/c they mig... by onetimeuse92304 on Monday September 11, 2023 @03:56PM (#37472769)

> Thus the financially smart thing to do was often to finance the car, even if you could buy it outright

I think the financially smart thing is to avoid debt as much as possible.

Also, if you absolutely need to take on debt and decided to buy a car, the financially smart thing to do would be to buy as cheap a car as possible. But that's not what really is happening, isn't it?

The reality is that taking debt changes how you think and make decisions and has far more reaching consequences than just the financial cost of the debt.

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Re:In Germany, 27 are in 'preventive detention' b/c they mig... by fragmede on Monday September 11, 2023 @04:37PM (#37473343)

The avoidance of as much debt as possible is an irrational, emotional attachment to avoiding debt. Excessive amounts of debt is also financially unsound to collect, but the financially prudent thing is some debt, after which you end up with money, or equivalent, than if you not had taken on that debt.

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Re:In Germany, 27 are in 'preventive detention' b/c they mig... by TylerE on Monday September 11, 2023 @04:32PM (#37473271)

Taking on debt at 3% so you can stick the money into a index fund reliably returning 5%... is what is smart.

This sort of knee-jerk debt avoidance on principle is not smart.

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Re:In Germany, 27 are in 'preventive detention' b/c they mig... by onetimeuse92304 on Monday September 11, 2023 @05:36PM (#37474055)

First of all, buying a car so that you can drive your ass around is very different from sticking those borrowed money into an index.

Second, there exists no index fund that can reliably return 5%. Borrowing money to put it in a financial instrument is called leverage and is a quick way to get poor, not rich (and I know a bit about it because I work with financial risk for a pretty large, well known bank).

Third, the act of taking debt changes how people think. I also know something about it because for large part of my life I had a lot of debt. Wonderful things happened to me after I paid it all.

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