ORIGINAL: robbcayman



Let's take your example of earning 10% while paying 5% on a vehicle. Sure you are paying less of an interest rate, but that money you are earning the 10% on is taxable income. So, 10% starts to look like 7% to me. Also, you are factoring in risk, especially if you lose your job.

What I have done is paid cash for all of my vehicles and I pay $500 into mutual funds each month. I am averaging 12% and every 6-8 years I tap into it and buy another car. So essentially I am doing what you are talking about, but my spread is larger because I am not paying a dealer/bank 5% interest.

Also, even if someone wants to check my credit score it isawesome. Just pay your house payment on time or early and you will have a high credit score. You don't need a credit card or a car payment to build good credit.

Obviously you have made a lifestyle choice of borrowing money, but I think it will slow down your true potential. I have just seen far too many people win with money who refuse to borrow it. My parents make a 6 figure income, but their net worth is really low due to car payments, credit cards etc...

The golden rule is not how much you make, but how much you keep.

PS: Yes Dave Ramsey inspired me 5 years ago and it has been the biggest blessing of my life. I used to think just like GMMAT.