Nope, I disagree. Some people take 9 years loan, for a very good purpose. Like myself, I take because I want to roll the money as long as possible into investment.
Back in Aug '20, during Covid-19 days, I bought a conti car, RM300k++. I could have used to buy the car via outright cash, but decided to take a loan and invest the cash into shares instead.
So, instead of buying the car back with cash, I decided to dump the money into Tesla. A whole huge chunk of USD80k into one single share, although the purchase itself was via dollar cost averaging (multiple purchases over a period of time).
Totally exceeded my expectations on this. What a wild ride with all the ups and downs in between.
So yeah, my loan is a 9 year loan and I'm half way through, already served 4 years and 4 months (what an inauspicious number).
So, on a monthly basis, I basically sell some shares, that is equivalent to the monthly installment amount (approx RM3k).
The results, I have a balance of 56 months of the loan, which will be about RM168k to pay off (principal + interest).
BUT, the Tesla shares that I have now, is worth RM280k. If the share price maintains stagnant as it is today, with no ups and downs, at the end of my loan tenure, I would be left with RM112k.
More realistic figure, I'm guessing, it will land between RM200k~RM300k?
And to recap, if I were to buy cash with the RM300k++, which I could, at the end of 9 years, I would have a car that is worth perhaps RM60k and RM0 (since all the cash is paid upfront for the car purchase).
So back to the question - can I afford it?
Hell yeah, I can, but I'm better off taking a loan. :-)
I never ever buy the idea of taking longer loan tenure and we can take extra money to invest on somewhere else. Those who take 9 years loan and zero downpayment are majority buying car value below RM100k. Those people who are wealthy are usually taking shorter loan tenure and higher downpayment. Those people who take shorter loan and putting more downpayment mean they have already got extra money to do so and of course they have money either saving or invest on elsewhere. I do not believe that saving 20-30k downpayment will help you flip the value to become double within 9 years easily (got some cases but very rare). Bare in mind taking full loan mean higher principle value and the total interest we pay to bank is higher too.
You are saying investing n Tesla which is one of the world MOST valuable company. How many people know this 5 years ago and invest on it? I believe in Msia 99% people are not investing on Tesla shares. And the flip does not apply to anyone and also no one can verify your statement of earning huge on Tesla. And do you think there will be another Tesla for you to earn huge money in near future?
To me those who take 9 years full loan they are just simply not ready to own the car but force themselves to fulfill their own desire. End up they putting themselves in financial difficulty then blame on government, blame on their job salary and others but not themselves.
Sep 26 2024, 08:32 AM
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