Re:China bans new Bitcoin deposits
by Jtsummers on Wednesday December 18, 2013 @06:56AM
(#6927060)
Can't speak to GP, but my car loan interest rate is below the annual return on my mutual funds for the past several years. Depending on the deal you can get on your interest rates it can make sense (1.49% APR, after the 3 years I'll have paid less than 1 extra car payment as interest, or 1/36th the value of the loan as interest; any fund that rode out this recent stock market increase well will easily beat that).
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ADDENDUM: I didn't state that very clearly. Start with a loan of $7200, split over 3 years of monthly payments it's $200/month. Go with the rate I actually have (1.49%) and the loan payment is $204.63/month. It works out to $166.59 in interest spent over those 36 months. I found a 3 year CD with an APY of 0.91%. If you invest that same $7200 it will be worth $7398.35 after the 3 year period. A profit of about $32. And that's with an ordinary CD, less conservative investments have a much higher potential yield. Of course you pay tax on those earnings, so the CD may not actually be profitable in this scenario, but a higher yield account almost certainly would be.
[1] Missed the edit window by this much.