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by jetako 2664 days ago
How do you figure? I've been financing a car at ~3% interest for the past 4 years. My investments have returned triple that over the same period.
2 comments

Those investments are not zero risk though. I don’t disagree with the general point but suggesting you should take a loan if the rate is less than the S&P return for the past year is questionable.
Nothing is zero risk, including owning a car; include the risk in your calculation. Your time frame is not one year, but typically 3-5. If your loan is at 2%, you don't need your stocks to hit 8% every year. You need them to be no worse than 2% p.a. over the entire period of your loan. That's significantly smaller risk than the risk of stocks not performing at your expectation of much higher return.
> How do you figure? I've been financing a car at ~3% interest for the past 4 years. My investments have returned triple that over the same period

Would you be willing to disclose in general terms what you have in your portfolio of investments. Keen to learn.

On average, the S&P 500 has historically returned roughly 9.8% annually. In 2017, the S&P 500's total return was over 19.7%. But for 2018, it was minus 6.2%.

You could easily achieve similar returns in an S&P 500 index fund.

Vanguard ETFs are my jam: VOO, VXF, VGT, VTI, etc.