no interest
To my last two commenters, thank you. Big huge thanks to Cosmic who took time to exchange a few emails with me and give me at least 3 “aha” moments of clarity, thank you very much!!
As an update to the last post, I came home that same night to find that Rick had completely overhauled the library/den/office. He did tons of work and my heart swelled with pride. I sat down with him and told him, ‘I was stupid, next year I want a nice gift….no matter what!’ To which I swear he said, “Ok…where’d I put my beer down?”
Now onto other things.
If you could get an interest free loan for $7,500 from the government that you had 15 years to pay back…would you do it? Would you do it if you didn’t need the money but only wanted to create a cozy nest egg? or invest the money? Would you do it in light of economic hardships you see all around? Would you do it so that you can save the money in case of strife? Would you do it and use the money for a big vacation? Something else?
Please do share your thoughts.
Okay, take a $7,500 loan? Hmm. When would you start making payments? Rather take the loan, you might be better off to pretend you did take the loan and start paying back now. Open a savings account and start putting the loan paymeent into the account as though you owe it. At the end of 10 years with accumulated interest, it would be a nice nest egg and guess what? You don’t owe anyone. Why would you want to have a vacation or anything else that you will have to repay. Better to let the bank pay you than the other way around. Those are my thoughts and I’m sticking to them. PS, in this economy, I think the only thing I would invest in is my own interest bearing bank account. Who knows what it will be like in 15 years when a loan would become due and payable.
Oh, and you are very welcome.
I agree with Cosmic. I really like the idea of putting money with which you would have paid off the loan into a savings account.
We are absolutely taking it. We talked to our financial advisor about it and he told us to take it as well. It is after all interest free and the only caveat is if you sell your home before it is paid off you have to pay the balance back right away (not sure of the exact amount of time). In our case we will use it to get some necessary electrical work done around the house and then put the rest toward some credit debt we accrued around buying the house.
Given the interst we will be able to deduct each year we will always get enough back in taxes to cover the $500 a year payback.I say if it makes you feel safer to have a nest egg you can draw on then go for it.
Just my two cents.