WY, OK | Gearclash - 9/28/2020 08:15
The flip side is if you don’t borrow you are giving up opportunity NOW.
It's called time preference and is what it all boils down to. The artificially low rates of the last 10 years have completely upended that and not surprisingly is why so many large corporations didn't have enough cash on hand or lending power left to be able to weather a few months of bad sales this year. Not to mention all the people that live month to month and buy everything on a payment instead of what the item actually costs overall. I haven't been to a car dealer, or tractor for that matter, that hasn't tried to sell me a payment first and foremost the last decade.
All these 0% deals lately are really screwing with peoples time preferences, mine included. I've upgraded and bought new when normally I would have bought slightly used since I am not using my money to do it. Not to mention what sub 3% 30yr loans are doing to house prices and ~4% does to land prices. |
paying cash vs financing
