That is called a bet ... machines depreciate ... so he is hedging on the worst happening.
My thought, he needs expenses and this is a great way to do that and 'write them off'.
Housing market
- Thread starter simply1
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My thought, he needs expenses and this is a great way to do that and 'write them off'.
It's impossible to do the math because you/we don't really know what he means by the dollar crashing nor what probability of that occurring.
I'm sure he'll be fine. But to me it's a silly justification for financing.
These are all hobby tools. I think he's just convinced the US economy is going to totally crash.
Great thing for thieves to steal in an economic crash.
At the minimum you know who has tools you can borrow . . . .
I worked for a subprime lender in 2006 (I didn't know anything about mortgages at the time and just needed a job) but I got disciplined because there was a customer that was going to refi with us for a ton of cash out and they said they were going to dump the house right after that on the market and I noted it on the account and the underwriter didn't approve it. I mean the entire point of the operation was to charge people points on their initial refi and show that has income on the ledger, not to get people homes.
We were underwriting for 30 days and not 30 years. Get the payment in, get it off the books, cash the checks.
Today is largely not like that, but some stories are starting to sound a little familiar
For sure. Homemakers, NFM, Lowes/Menards depending on the purchase, could even get a new CC with 24 month interest free.
Real estate firms Compass and Redfin announce layoffs as housing market slows
In filings with the Securities and Exchange Commission, Compass announced a 10% cut to its workforce, and Redfin announced an 8% cut.
www.cnbc.com
Interest cost + depreciation on purchase vs inflation rate is what you are looking at, assuming he is financing things he actually needs.
The most extreme version is a home mortgage - locking in a house payment of say $1,200 today will look really, really cheap in years 20-30 on that mortgage.
I think he is a fool if he is just randomly financing anything that can be financed in the name of paying it back with cheaper dollars. Real estate works really good with this strategy, sometimes vehicles and equipment too, but other than that I don't see it ending well for him.
It also really depends on if he needs the things he is financing or if he is just convincing himself to do projects and buy things with his logic. Like every person who buys 200 dollars worth of stuff they don't need at target because they save 5% with their card.
I think people would use that less if they knew how much has to be built into the price to offer extended interest free financing.
You’re paying the same price either way. The profit from those deals comes from the (not insignificant) number of people who don’t pay them off in time.
Free parking is very expensive.
I guess I haven’t looked… but when Homemakers/NFM runs a 48 month interest free financing are you saying that Homemakers/NFM will markup their inventory? I don’t see that being the case. I could be wrong - but that would impact your cash buyer.
I suppose you are if you don't negotiate. At any rate, it's not free if the company you're buying from has to account for 10-15% (or more depending on how long the free interest is) fees paid to the lender.