Perpetual earnings from nothing

[tech/a]

So let’s muddy the clearly accepted definition of Good and bad debt

I buy a new 20 Tonne excavator
$200k
Next year it’s worth $160k
A depreciating asset
Sure I can claim depreciation
But there is much much more

I think your ending the discussion before it got started.

 

[luutzu]

So let’s muddy the clearly accepted definition of Good and bad debt

I buy a new 20 Tonne excavator
$200k
Next year it’s worth $160k
A depreciating asset
Sure I can claim depreciation
But there is much much more

I think your ending the discussion before it got started.

He might not meant it in a literal sense.

Maybe depreciating was meant as something that's non-productive?

 

[tech/a]

Ok I’ll muddy it a bit more

Your daughter who is 19 is concerned that some of the guys in her group maybe less responsible when driving with friends in their car.

She wants independence.
You want your daughter to be safe and to get home.

(1) Stop her from buying a depreciating asset
(2) get her to buy a cheap possibly less reliable car she has to go into debt for
(3) Buy a decent car she has to go into debt for
(4) ?

 

[luutzu]

Ok I’ll muddy it a bit more

Your daughter who is 19 is concerned that some of the guys in her group maybe less responsible when driving with friends in their car.

She wants independence.
You want your daughter to be safe and to get home.

(1) Stop her from buying a depreciating asset
(2) get her to buy a cheap possibly less reliable car she has to go into debt for
(3) Buy a decent car she has to go into debt for
(4) ?

Maybe tell the daughter to get a job first, then the car? Or find more responsible friends?

There's a trade off... We all don't mind flying business or first class. Better food, earlier check ins in case the plane leave before us... Most wouldn't go into debt for it though.

 

[jbocker]

So let’s muddy the clearly accepted definition of Good and bad debt

I buy a new 20 Tonne excavator
$200k
Next year it’s worth $160k
A depreciating asset
Sure I can claim depreciation
But there is much much more

I think your ending the discussion before it got started.

No! I don't mean to end the discussion I only meant it is a good generic summary in conversation with kids. Love your examples. Your car safety example is great, it brings about removing risk to a point which is as low as reasonably practical. How much do you spend what lengths do you take to be safe. It would cost a lot and difficult to park and probably not allowed to drive a military tank.

 

[tech/a]

(4) I’ll buy the car.
I’ll gladly go into debt for the safety
Of any of my family have done so many many times

Haven’t you?

 

[jbocker]

(4) I’ll buy the car.
I’ll gladly go into debt for the safety
Of any of my family have done so many many times

Haven’t you?

Sure have. Now the kids are buying their own, each of them are in mid or large 4WDs, and we have discussed that there are potential dangers in those too.

I did mention earlier what I agreed was a good summary, but I would limit that to the investing account.
Further, in buying a car as we have discussed, I would NOT do that from an investing account (the 10% 'clone' account). In this case the car debt would be managed amongst the day to day living accounts - the other 90% of your income.

 

[So_Cynical]

I did this free carry (leave the profit in) dividend strategy since 2009, pretty much stopped it in 2014 as i was holding about 35 stocks and it was getting out of control, its a great strategy for those with the appropriate investment attitude and patience.

Has been at the core of my investment success, its my money and so not really free, still its profit, money from nothing.