If I were Filthy Rich
By Crafty-Bunch-2675+26 Would using a lottery win to pay for an expense in cash, be better than using it to take out a loan (e.g. house or vehicles).
Typically, people buy houses and vehicles using bank loans.
But I have always wondered, if , with a significant lottery win...wouldn't it be better to buy a house or a car in cash ?
After all, loans almost always end with you paying significantly more than the cash price.
Some people think that, its too risky to use a significant chunk of your lottery win, to buy a house/car in cash... and advise that you should still take out a loan, just so that you don't end up spending such a large chunk of the lottery winnings at once.
What do you think ?
Recent responses
+18 @mangonel Car, yes. House, maybe/maybe not. The question is really, can I get a loan with a lower interest rate than expected investment return on the same money? A car loan typically has a higher APR than a mortgage. A mortgage may or may not have an APR higher than a market tracker's expected return rate.
+16 @TheLizardKing89 It depends on the rates. If your investments are returning 10% and your loan rate is 5%, it makes sense to take a loan.