I have $45K. I can either pay off the boat (a quickly depreciating asset) which is currently mortgaged at 7%, or I can invest the $45K and earn 9% over the same period (5 years). Which option should I choose?
The interest on the boat loan is being deducted as a second home.
It seems obvious to me that it is better to invest the money, take the write off, and keep the difference, but I want to make sure.
2007-09-20 15:05:06 · 7 answers · asked by wwwwizard 1 in Business & Finance ➔ Personal Finance
Payoff the boat and then take whatever you pay on it every month and put that towards the investment.
2007-09-20 15:12:25 · answer #1 · answered by kay S 4 · 1⤊ 0⤋
Enjoy the boat. Use the interest on the investment to pay off the mortgage. In the 30% tax bracket you are earning 6% and paying 4 2/3%. The math looks good to me.
2007-09-20 22:23:51 · answer #2 · answered by HH@20 2 · 0⤊ 1⤋
sell the boat and save the money. The economy is about to ride a crazy inflation roller coaster. You can buy a boat when the barrel price of oil is under $60 or the price of a gold ounce is under $600. You can rent a great NEW boat for $2000 a week at most piers. I only used my boat six times a year at my peak. It would have been cheaper for me to rent when I got the itch.
2007-09-20 22:16:09 · answer #3 · answered by Davyd R 3 · 1⤊ 0⤋
The person who said SELL THE BOAT AND INVEST OR SAVE THE MONEY , in my opinion is totally right.
or pay off the boat and invest the payment monthly is a good option too if you really really love the boat..... hey we all need something we enjoy doing.
2007-09-20 23:00:49 · answer #4 · answered by net810 3 · 0⤊ 0⤋
Assuming you could get 9% the math looks good.
However, paying off a debt is always the better choice. Then you could invest the monthly payment amount.
Or, just sink the boat and claim it as an insured loss. Happy days are here again....................
2007-09-20 22:12:58 · answer #5 · answered by Anonymous · 0⤊ 0⤋
I honestly believe we are heading into a depression, and the value of the dollar will collapse. My advice would be to pay off the boat and sell it. Use the money to pay down your primary mortgage or buy gold.
Good luck.
2007-09-20 22:11:39 · answer #6 · answered by Computer Guy 7 · 1⤊ 0⤋
hi,
i personally feel that u should let your fund grow...if u are comfortable with the boat instalment.. invest your money and make it work for you. but most importantly u should diversify your investment.. 9% for 5years is more like a fixed deposit to me but if you are interested in a short term investment plan with a average of 9% monthly return on ur principal maybe u wana check this out www.wdf-usa.com Any enquries you can alway email me at mitcolt@yahoo.com
cheers!!
2007-09-20 22:24:09 · answer #7 · answered by mastermind 1 · 0⤊ 2⤋