Comments on: The Best Decision vs. The Financially Smart One http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one/ Personal finance blog for college students, recent graduates and everyone else -- including entrepreneurship -- for getting rich. Featured in the Wall Street Journal and New York Times. Sun, 12 Feb 2012 18:46:58 +0000 hourly 1 http://wordpress.org/?v= By: Nate http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one/#comment-98241 Nate Thu, 14 May 2009 03:44:19 +0000 http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one#comment-98241 Actually, that was not the wrong financial decision. The wrong financial decision is to invest that money and project a 10% return on investment in the future. Unless you have a crystal ball, there is no way of knowing whether that's realistic or not. What has been the return of the stock market for the past 10 years? About 4%. Most likely, your friend would have failed to achieve that lofty objective because he would have needed the money and had to liquidate his "long-term" investments at a loss. A bird in the hand is worth two in the bush. 4% after taxes is a sure thing and hard to beat. Actually, that was not the wrong financial decision. The wrong financial decision is to invest that money and project a 10% return on investment in the future. Unless you have a crystal ball, there is no way of knowing whether that’s realistic or not. What has been the return of the stock market for the past 10 years? About 4%.

Most likely, your friend would have failed to achieve that lofty objective because he would have needed the money and had to liquidate his “long-term” investments at a loss.

A bird in the hand is worth two in the bush. 4% after taxes is a sure thing and hard to beat.

]]> By: Patrick Bateman http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one/#comment-75064 Patrick Bateman Sat, 27 Sep 2008 02:03:42 +0000 http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one#comment-75064 I agree - ultimately if you are not comfortable holding debt then pay it off! Investment decisions are sometimes made to feel good that your future is on the right track. See my article on "The Investment Waterfall" for more info. My website is www.onemillionbucks.net. Thanks! I agree – ultimately if you are not comfortable holding debt then pay it off! Investment decisions are sometimes made to feel good that your future is on the right track.

See my article on “The Investment Waterfall” for more info. My website is http://www.onemillionbucks.net. Thanks!

]]> By: Ram http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one/#comment-36643 Ram Thu, 11 Oct 2007 15:05:48 +0000 http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one#comment-36643 I would say invest the money in make more money and pay off low interest loans later, but make sure you pay of the minimum amount right on time. Few loans like education loans and home mortgage loans should never be closed very quickly, since we might never get credit at such low interest. Its a bit of risk, but it suits me. I would say invest the money in make more money and pay off low interest loans later, but make sure you pay of the minimum amount right on time.
Few loans like education loans and home mortgage loans should never be closed very quickly, since we might never get credit at such low interest.
Its a bit of risk, but it suits me.

]]> By: andree http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one/#comment-36537 andree Wed, 10 Oct 2007 18:27:32 +0000 http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one#comment-36537 cheers, why was that a bad financial decision? he paid the debt entirely, without have interest rate for a year or whatsoever. now, he works and uses a part of his monthly income to invest. good move. thx cheers,
why was that a bad financial decision? he paid the debt entirely, without have interest rate for a year or whatsoever. now, he works and uses a part of his monthly income to invest. good move.
thx

]]> By: Danielle http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one/#comment-22047 Danielle Thu, 14 Jun 2007 13:55:36 +0000 http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one#comment-22047 I have a really specific question for you -- I currently have $4500 in outstanding debt on a credit card. The card is only at an 8.9% APR, so I'm lucky that the rate is significantly lower than most college students. I try to pay a over the minimum every month (the min is currently at about $150 -- and I'm paying about $200). As I'm going back into classes for the fall I don't have a steady stream of income. I have enough money in my bank account to continue making payments, however, so I'm not worried about that. What I am curious about your opinion on is this: I'm applying for another loan for school this year should I calculate in the extra $4500, pay off the credit card, and then deal with that balance along with the (significant) loans I will be paying off after I graduate when I will have a steady stream of income? Thanks! & Great blog I have a really specific question for you –

I currently have $4500 in outstanding debt on a credit card. The card is only at an 8.9% APR, so I’m lucky that the rate is significantly lower than most college students. I try to pay a over the minimum every month (the min is currently at about $150 — and I’m paying about $200). As I’m going back into classes for the fall I don’t have a steady stream of income. I have enough money in my bank account to continue making payments, however, so I’m not worried about that.

What I am curious about your opinion on is this: I’m applying for another loan for school this year should I calculate in the extra $4500, pay off the credit card, and then deal with that balance along with the (significant) loans I will be paying off after I graduate when I will have a steady stream of income?

Thanks! & Great blog

]]> By: farzan http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one/#comment-6446 farzan Wed, 28 Feb 2007 23:18:41 +0000 http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one#comment-6446 Dude, there is a difference between good debt and bad debt. Any debt that a person takes to make financially sound decisions which would increase his net worth is good debt. The opposite is true for bad debt. Well, in the end it is a personal choice and i agree with you about doing things you are personal with. Dude, there is a difference between good debt and bad debt. Any debt that a person takes to make financially sound decisions which would increase his net worth is good debt. The opposite is true for bad debt.
Well, in the end it is a personal choice and i agree with you about doing things you are personal with.

]]> By: knuffel http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one/#comment-2047 knuffel Thu, 18 Jan 2007 22:27:01 +0000 http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one#comment-2047 (I discovered your site today, very interesting!) In general paying off the 4% loan doesn't result in loss. so, it's not the worst decission. Anyway, TypeKey says: "The site you're trying to comment on has not signed up for this feature. Please inform the site owner." (I discovered your site today, very interesting!)

In general paying off the 4% loan doesn’t result in loss. so, it’s not the worst decission.

Anyway, TypeKey says:
“The site you’re trying to comment on has not signed up for this feature. Please inform the site owner.”

]]> By: pTymN http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one/#comment-2046 pTymN Thu, 18 Jan 2007 14:54:09 +0000 http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one#comment-2046 I also am paying off $13000 in student loans instead of investing. Much to my financial advisor's chagrin, I feel that debtlessness will be a wonderful state to return to. One interesting way to think about it is this. If I choose to quit my day job and do a startup, my monthly expenses dropped by $150 a month since I don't have payments to make. Having an easily sustainable minimum monthly expense has some monetary value, especially if I do something profitable with the time that I can free up. :-D I also am paying off $13000 in student loans instead of investing. Much to my financial advisor’s chagrin, I feel that debtlessness will be a wonderful state to return to. One interesting way to think about it is this. If I choose to quit my day job and do a startup, my monthly expenses dropped by $150 a month since I don’t have payments to make. Having an easily sustainable minimum monthly expense has some monetary value, especially if I do something profitable with the time that I can free up. :-D

]]> By: Ross Hill http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one/#comment-2045 Ross Hill Sun, 20 Aug 2006 13:00:36 +0000 http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one#comment-2045 Your right there, you've gotta be able to sleep at night with what you are doing. Your right there, you’ve gotta be able to sleep at night with what you are doing.

]]> By: scarletpimpernel http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one/#comment-2044 scarletpimpernel Sat, 27 May 2006 03:32:47 +0000 http://www.iwillteachyoutoberich.com/blog/the-best-decision-vs-the-financially-smart-one#comment-2044 This is a great post. I understood exactly what was meant by the best decision vs. textbook decision. Sometimes, if we are properly self-aware, it is best that we do something contrary to the textbook's advice if only because we know that, in the long run, it will actually get us to our goal more directly. Had it been me, for example, the money I would have "made" off the difference I probably would have gone off and spent many times over... So I would have been best off paying off that debt as well. For shame, I know. Ah well. Thanks. This is a great post. I understood exactly what was meant by the best decision vs. textbook decision. Sometimes, if we are properly self-aware, it is best that we do something contrary to the textbook’s advice if only because we know that, in the long run, it will actually get us to our goal more directly. Had it been me, for example, the money I would have “made” off the difference I probably would have gone off and spent many times over… So I would have been best off paying off that debt as well. For shame, I know. Ah well. Thanks.

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