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/biz/ - Business & Finance

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25520785 No.25520785 [Reply] [Original]

Can someone explain to me the positive effects of loans?
Why would you ever accept a loan?

>> No.25520861

Because some people need it to buy necessities to survive, and others get them to buy shit they don't need because they're retarded.
There are also people who take loans to reinvest into something that will provide a much greater return than what they owe on interest. So for example if you took loans to buy BTC last year you would have made an absolute killing.

>> No.25520879

Because paying 100% upfront for a house or a car is dumb

>> No.25520904

>>25520785
Net present value

>> No.25520925

>>25520879
??????

>> No.25520936

>>25520879
>it's dumb to not be enslaved to the jewish moneylenders
ok schlomo

>> No.25520955

Usury is a sin for a reason; it preys on the weak.

>> No.25520989

>>25520785
because the money you have now is worth more than that same amount of money later - and no not just because of inflation.

>> No.25521016

>>25520861
>>25520904
>>25520989
So it's centered upon the time value of money?

But as >>25520955 says, wouldn't debt-centered economics are what causes inflation to begin with.
Please keep in mind I am a pleb: What causes inflation?

>> No.25521021

>>25520785
have bitcoins
use as collateral to get loan
buy stuff

>> No.25521066

>>25520879
Why?

>> No.25521073

>>25520879
buying a used car in cash is better than taking a loan for a used car or new car.

imagine paying a car payment AND a repair bill. paying for the car like its as new as the day you bought it yet its falling apart.

also never buy new..always buy used..and even more desu buy a used honda or toyota..cars are overrated unless you really got extra money to play with.

>> No.25521076

>>25520785
> loans are bad
> save up 30 years for a house $500,000
> put $1388.88 in bank account every month
> oh shit i need to live somewhere
> pay $1000 to landlord every month
> live there for 30 years and pay landlord $360,000
> at least didn't pay the jews $30,000 for the loan haha

>> No.25521091

>>25520936
>enslaved

Nigga you can literally sell a house

Like any time you want

>> No.25521109

>>25521066
Because that lump sum can be invested in an asset that gains more % per year than the interest you’re paying
People here don’t know anything lol

>> No.25521151

>>25520785
A loan is like a time machine. Imagine if you want to buy something and you wished past you could have saved towards that every month. With a loan you can make future you pay instead, allowing you to transfer money to your present you every month. The intrest you pay are the fees for using the time machine

>t. bought bitcoin with a loan in mid 2019

>> No.25521175

>>25521109
>People here don’t know anything lol
No kidding, but if I had to guess a lot of the posters in this thread are young zoomers who have never had to take out a loan

>> No.25521177

>>25520785
>take loan
>invest in something that give returns greater than interest on loan
>??
>profit
a 12 yo could figure it out

>> No.25521289
File: 168 KB, 850x1367, succubus3.jpg [View same] [iqdb] [saucenao] [google]
25521289

It's about temporal preference. Do you want $1000 now more than you want $1050 a year from now?
If you really need to fix your car to get back to work or to pay for an expensive surgery, or you have terminal cancer, then go ahead.

Now take look at my thread please: >>25520790

>> No.25521348

>>25521109
But I already have more money than I will ever need. Why the fuck would I go in debt for anything?

>> No.25521419

>>25520785
Because thanks to the inflationary nature of Fiat money, it is devaluing over time. Meaning money you have no is worth more than money you have later. View Fiat money as asset, and loaning as shorting. The trick is to loan to buy an asset that grows in value over time

>> No.25521469

>>25521348
Because if you have a lot of cash you’re remaining liquid AND leveraging that debt senpai, win win

>> No.25521476

>>25521016
>debt-based economics causes inflation
Loans aren't inherently bad if managed properly and provided the money to pay the interest can reasonably exist.

The really simple explanation is all the money is created out of loans plus interest that can never be paid back because we literally sold out our ability to create money to private institutions that own the Federal Reserve and financially rape the world. Fiat currency is a scam designed to keep actual value flowing into the hands of the few. As more money is created the already circulating money loses value since it's less scarce. Thus you see prices go up to compensate, and life gets generally shittier and dreams get smaller.

>> No.25521548

>>25521469
How is it a win when I can just buy the car and not have a single care in the world?
You all sound like poorfags living month to month or something

>> No.25521553

>>25521021
what do you use for this and how do you spend it?

>> No.25521552

>>25520785
If I think I can invest my money safely at 5% annually and take out a loan for a house that I pay 3% on annually, I'm saving a fuckload of money taking out the loan even if I could just buy the house outright even without accounting for compounding effects in my investment

>> No.25521589

>>25521476
>all the money is created out of loans plus interest
I wonder what an economy without loans would look like. With a fixed-value currency.

>> No.25521598

Ive taken a car loan a year ago (480$ per month, in my poor fucking country thats a lot) i feel that was stupid af but maybe it wasn't that bad (better safety on poor fucked up roads). Thinking about mortgage loan about 80k $ (im earining something about 4k$ per month) because now i'm renting a flat (something around 500$ per month, the mortgage would be the same). No more loans after that maybe only if i need like 1/8 price to invest. It depends - i think taking a loan for a new iphone is more stupid than the things i did.

>> No.25521619

>>25521589
People are forced to save money all the time and only spend for what they actually need. Sounds fucking crazy right?

>> No.25521621

>>25521553
Aave

>> No.25521634

>>25521091
any time you want, like after the real estate crash in 2007? oh wait you actually couldn't.

history didn't start in 2015, aiden. living debt free is the only way for a decent free white man to live.

>> No.25521647

>>25521016
>If you get a loan and do something with it will you be better off than not

>> No.25521700

>>25521589
It would probably involve an unofficial currency with a changing rate, or some kind of barter system.

>> No.25521704

>>25521177
>take loan
>invest in something that give returns greater than interest on loan
>scenario 1: lose your job, get cancer, have a baby go to the nicu, get hit by a car, or other major life event
>scenario 2: stock market/crypto/real estate market crashes/business get locked down over hoax virus/whatever
>??
>bankrupcy

>> No.25521708

>>25521548
But you already have all the money you need so you won’t have a care in the world regardless?
Here’s a scenario for you, we are each buying a $1M house, I’m buying with 20% down and a mortgage you’re buying straight cash. A year later the house is now worth $1.2M, we decided to sell, we each profited $200k, but I risked 1/5th the amount you risked. And this is why leveraging debt is a thing..

>> No.25521773

>>25521704
>scenario 3: 1 and 2 did not happen.
>???
>profit

>> No.25521802

>>25521773
>playing russian roulette
>there's only 1 bullet in the gun! checkmate atheists!!

>> No.25521814

>>25520785
Because you don't have to pay it back. Oh no, I'm in debt! What are they gonna do, call you a whole bunch of times? Block their number. There is literally no consequence, and if you think there is, you are trapped in the rat race.

>> No.25521851

>>25521814
>What are they gonna do, call you a whole bunch of times?
Sue you, take your bank accounts, garnish your paycheck, put liens on your cars and any real estate you own.

>> No.25521867

>>25521708
Who gives a fuck about constantly calculating how to make even more money, I have everything I need and money that I won't spend in my lifetime. If I want to buy a Sprite I buy a Sprite and drink it, I don't go collecting plastic bottles to "make more money" just so I can then buy the Sprite cheaper.

For your house example, I wouldn't ever buy a house that I plan on selling, that seems incredibly retarded and risky to me.

>> No.25521933

>>25521851
I don't care about any of that material shit.

>> No.25521979

>>25521867
Ok

>> No.25521997

>>25521634
>like after the real estate crash in 2007?
How is this any different from being underwater in a stock market position?

Jesus christ this BTC has attracted a new wave of retards. Learn to lurk and keep your mouth shut.

>> No.25522019

>>25520785
>mortgage rates are like 3%
>fair expectation stock market returns 7%
>take $100,000 loan @ 3%
>you earn 7% on the OB while you're paying down the loan
>net 4% on your money
Or
>spend $100,000
>make 0% on the OB because it's gone
>forgo 4% on $100,000

>> No.25522032

>>25521933
Until you need some medical procedure that costs more than the wadded up 20 you have in your back pocket.

>> No.25522040

>>25521073
What's wrong with 1.99% interest?

>> No.25522055

>>25521016
This might help
https://m.youtube.com/watch?v=PHe0bXAIuk0

>> No.25522056

>>25521016
Yes, it's centered around the time value of money and also leverage.

Debt helps the economy create goods and services that wouldn't exist if people only had 1.0x leverage.

No normie wagecuck can buy a house without debt.

>> No.25522066

Oh dear, some people really need to read some entry level economics and financial accounting books on here.
Not trying to act superior or anything but this is real basic stuff and with just that basic understanding this question wouldn't need to be asked.

>> No.25522120

>>25521997
Ah yes, i remember when my AMZN position got a leaky pipes and i had to pay for stock plumbers. And then the state wanted to collect taxes on my MSFT position and some niggers stole the copper wires out of my KO.

>> No.25522195

>>25522120
Wait did you take “under water” literally?

>> No.25522254

>>25522120
>i remember when my AMZN position got a leaky pipes and i had to pay for stock plumbers.
That's basically the equivalent of holding and losing -6-20% throughout September-December. Holy fuck you're so stupid.

>> No.25522267

>>25521933
>I don't care about any of that material shit.
then why are you taking out debt?

>> No.25522278

lol man you're a victim of rugpulls nowadays, never join these tard scammers anymore
bitcoin is just rising around 22.5k-23.3k last time now reaching beyond but other alts are still waiting
better check MTLX tokens, there is 25-50x potential now with fast price pushing

>> No.25522295

>>25522195
Lel no, i mean i can hold stocks indefinitely without any trouble. A house is not like that, it requires maintenance and has ongoing taxes.

>> No.25522331

>>25521997
because you can't sell a house that you have a mortgage on you fucking mouth breathing retard. you are literally stuck.

god when can we purge these fucking know nothing young millenials that live with mommy and daddy but listened to a finance podcast so they think they're financial experts?

>> No.25522338

>>25522295
And stocks can dump to 0 if the company fucks up or gets replaced by a better company

>> No.25522489

>>25522331
>Do homeowners sell their houses before paying off their mortgages? Turns out, it happens more often than you may think. After all, most mortgage loan terms last for 30 years and few homeowners stay in their houses for that long.
>The simplest way to sell a home you still owe money on is to sell it for more than what you owe. Banks and lenders are generally willing to sign off on a sale if they are confident they will be repaid the remaining mortgage balance.
What do you gain from lying? Dumbass.

>> No.25522559

>>25522040
its still a loan

>> No.25522616

>>25522338
Sure, but im not paying a single red cent more than my initial investment. I dont need a revenue stream to maintain my stock position, it just exists in some brokerage's database and i can liquidate in a minute at a few dollars cost. Even if im in some obscure low volume shitstock it will take 2-3 days at most.
Real estate a completely different thing.

>> No.25522618

>>25520785
>Can someone explain to me the positive effects of loans?
Loans allow for surplus capital to be utilized and the owners of that capital to be compensated for allowing someone else that use.

>Why would you ever accept a loan?
If you have someone else, your customers (not yourself), pay it back for you.

Are there negative effects of loans?
Yes usury rhymes with jewyery.

>> No.25522677

>>25522559
Dave Ramsey, get out of here.

>> No.25522680

>>25522616
True. But all that stuff is also what gives it as an asset. It's less liquid, but more fixed in price. You don't expect your house to suddenly dump 50% in value.

>> No.25522702

>>25520785
So you can put 35k into bit coin and then never pay any of them back while occasionally kidnapping and raping repo men to death.

>> No.25522713

>>25522489
>The simplest way to sell a home you still owe money on is to sell it for more than what you owe.
this is pretty hard to do when the real estate market has fucking collapsed and it down 50% which is the scenario we're talking about you god damned drooling fucking moron.

>> No.25522865
File: 1.78 MB, 333x194, 1444522108879.gif [View same] [iqdb] [saucenao] [google]
25522865

>>25522713
Every year isn't 2007 you retard. Real estate is much slower and less volatile than the stock market. It requires more patience. You're just talking out of your ass at this point.

>> No.25523020

>>25520936
>dude just rent or live in a box until you can afford a house at age 55 lmao

>> No.25523057

>>25521016
>What causes inflation?
The central bank.
it needs to be abolished

>> No.25523074

>>25521621
thought as much
I have never learned how to spend crypto yet alone cash out. Mainly to help me hold.
Can you send USDC to paypal?

>> No.25523357

>>25523074
>Can you send USDC to paypal?
No.
Use an exchange like binance or coinbase

>> No.25523841

>>25520785
Because other people want to convince you to live beyond your means. Even if it's a 0% APR loan, they're still offering it to you so that they can extract more money for themselves, because they know you'll take the more expensive option with the "free" money.
There are cases where this is absolutely unavoidable, thanks to the fact that Western society is built on debt at this point, but even in these circumstances (housing, car, education), your one and only laser-sharp focus should be to get as little as possible and get out as quickly as possible.
>>25522677
Dave Ramsey has a lot of stupid Boomer ideas (his snowball theory, avoiding credit cards and not getting cash back) but you'd still do better in the long term listening to him than most of the idiots on here.

>> No.25524228

>>25520785
The sole purpose of loans is to enable greater spending. Greater spending means more money can be put to use, as compared to if you didn't take the loan. Which ultimately implies, you only take a loan if you can turn that loan into bigger returns.
Anyone who gets a loan to "buy something they can't afford"(for the sake of consumption) does not understand money and should learn it as soon as possible. If you can't afford something right now, what guarantees that you will afford to pay the loan back when the time is up?
>https://www.youtube.com/watch?v=PHe0bXAIuk0
Watch this video on how the economy works. It visualizes the function of debt and credit very nicely.

>> No.25524351

>>25520879
not if you are high net worth that buying it is only a small percentage of your net worth

>> No.25524555

Is this plan retarded

>borrow $10000 @ 3% APR on lightstream at with 800+ credit score
>place it in blockfi USDC and possibly earn 8.6% APY

>> No.25524725

>>25522055
Acceptance of credit is the most disgusting thing the economy has ever allowed.

>> No.25524888

>>25521151
This is fucking genius

>> No.25525055

>>25521151
How would you metaphorize falling into unrequitable debt? Setting the timer too far in the future and being sent to the past as an error?

>> No.25525367

>>25520879
>>25524351
The car a person drives is probably the best indicator of whether they're going to make it that exists.
In my super comfy programming job parking lot (back when we worked onsite), where low six figures is the starting salary in an area where that's still good money, there were 15 year old cars, and there were Teslas.
The Teslas were owned by the newfags fresh out of college.

>> No.25525579

Statistically there are none. Of course some individuals can come out ahead but its the same as gambling.

>> No.25525668

>>25521109
This guy gets it

>> No.25525686

>>25521867
You are being obtuse. The point is, loans allow you to access financial opportunities you may not be able to without them, all while risking less of your own capital upfront.

>> No.25525701

>>25521933
Then why did you take a loan you weirdo

>> No.25525909

>>25521289
I want you to post succubus 1 and 2.

>> No.25525912

Frankly business. I took a few to build something that pays it back and more. Personal loans are okay. I was in the military got ahead of a paycheck in personal loans. I paid em off every week. It built my credit but frankly was pretty dumb. Militsry was so stable it was fine. I just went hard mode near the end and got out of the cycle

Really its the terms and rates. The 1 year 2 year shits are terrible. 4 or more is still pretty shit but for business or maybe a absolute necessary life cost are manageable.

Credit card payments and limit increases every year are the best for kids. Military, or work if you're unable to afford school. Frankly if you're a high motivation 18 yo and you want to be a lawyer go poke laywer firms and really stretch to make it. Sucks for kid, it sucks for all kids, kid. Effort, belief, and personality beat education quite alot.

>> No.25526180

>>25521598
$480 is a lot for a car payment even in US. What car did you buy?

>> No.25526224

>>25525367
The average salary were i work is 100k+ and every single car is a beater except the occational big ass truck

>> No.25526457
File: 12 KB, 268x188, 1605374922286.png [View same] [iqdb] [saucenao] [google]
25526457

>>25520785
Multiple reasons why loans can be good:
-Inflation. Sometimes the inflation is higher than the interest, so basically the money is worth less by the time you have to pay it back. People who say <2% interest/year loans are free money are absolutely right. If you can finance something with 0 interest instead of paying in full do it.
-You are in a position where the extra funds allow you to make enough money to outweigh the interest.
-You don't have to hoard cash, meaning you can use your money to make more money instead of hoarding it, again, outweighs the interest you have to pay.

>> No.25526659

>>25520879
this, with decent credit you an lowest interest rates right now you can get house/auto loans at 2-3%. literally putting all your cash in something like an index fund will get you 4-5% returns per year.

>if banks could make more in the market than lending why dont they just do that
fractional reserve banking, banks can create a 100k mortgage loan with only 10k on hand. so they end up earning 2-3k a year on 10k capital.

>> No.25527037

>>25520785
rent: 1400 eur
vs
(interest on mortgage: 500 eur -
appreciation of house: -1000 eur = )
buying house: -500 eur
Boy I wonder OP good thread

>> No.25527093
File: 116 KB, 700x652, 1605911475161.png [View same] [iqdb] [saucenao] [google]
25527093

>>25526180
>$480 is a lot for a car payment even in US
No, it's not.

>> No.25527192

>>25520785
Only poor retards call it debt, big boys call it leverage.

>> No.25527376

>>25521348
Say you have $1M in crypto or stock. If you cash that out, Uncle Sam is going to take a big fat bite out of your ass if you want to cash out to buy something. Instead, you put up your assets as collateral and take out a loan with interest much lower than what your tax bill would be all the while your portfolio continues to reap gains at a greater rate than any pittance you pay to the bank each month.