Cash alternative safest investment

bigadaj

AnotherJoe wrote: »

Try buying a car and see if "cash is king"

Agreed, though a slightly different argument as car sales are all about finance agreements and elevated interest rates.

Interestingly there was an article in the times yesterday stating that buying a bar with cash would allow you to negotiate a good discount on any car car purchase. Journalism quality is poor, but this is an article out of the eighties, if not before, pretty terrible really.

2010

AnotherJoe wrote: »

Try buying a car and see if "cash is king"

I did last year and cash was king.

Found the price for the car on drivethedeal, ordered it, and bought it for £3k less than local main dealer.

Only proviso was to "borrow" £2.5k and as soon as I got the car pay it all back so no interest.

Try it some time (car salesmen who are they?)

jimjames

2010 wrote: »

Only proviso was to "borrow" £2.5k and as soon as I got the car pay it all back so no interest.

So cash wasn't king then if you needed to borrow to get the deal?

bigadaj

2010 wrote: »

I did last year and cash was king.

Found the price for the car on drivethedeal, ordered it, and bought it for £3k less than local main dealer.

Only proviso was to "borrow" £2.5k and as soon as I got the car pay it all back so no interest.

Try it some time (car salesmen who are they?)

So you've proved someone else's point, congratulations.

2010

jimjames wrote: »

So cash wasn't king then if you needed to borrow to get the deal?

Of course cash was king becuse I paid off their (enforced) finance asap and paid no interest on it.

I didn`t need to borrow anything.

Only a fool would refuse to borrow £2500 to get an extra discount off the car of £1100.

Its called playing them at their own game and if you`ve got the cash that`s what you can do.

bowlhead99

You didn't get a better deal from the seller by giving them cash. They did not want your cash that you had saved up!

Instead what they wanted was for you to wait into the future and pay them a larger amount, at an interest rate higher than safe investment returns that they'd be able to get if you gave them cash there and then.

As you signed the documentation to say you would give them those larger future dated amounts of money, they were able to obtain commission from the lender who knows that of x people signing credit agreements, only y% will terminate them early, so getting a signature on a credit agreement is something they're willing to incentivise.

"Cash is king" means that people who have something you'd like to buy, really want cash now - rather than a part-exchanged vehicle (which is hard to transact into real money) or a credit card swipe (which comes with high transaction fees for the dealership) or a promise to pay in future (which comes with credit risk). Cash is king means that they want the cash, so they can do something useful with it, not wait around for an alternative or suffer costs converting what you give them into cash.

In the scenario you outlined, cash most definitely was not king because the vendor did not want your cash and instead much preferred to take a credit agreement, so much so that they were willing to give you maximum discount for signing one.

It might interest you to know that some Cantons in Switzerland have been telling their taxpaying members of the public to NOT pay their taxes as soon as the tax year is over - and instead please leave it until the very last day to file your tax return and pay up. They do not want to receive a pile of money which they would have to put into a bank vault until needed, as they would receive a negative return on it. As such, cash is NOT king.

Similarly with your car dealership, cash was not king because they didn't want your money to put into a bank account earning a small nominal interest rate (negative real rate).

diiann56a

I recently invested money in two years. And two years probably renew it if it will be profitable. And if not then maybe I'll think about bonds. Or I'll keep cash :d

2010

bowlhead99 wrote: »

You didn't get a better deal from the seller by giving them cash. They did not want your cash that you had saved up!

I got a new car for £3k less than the local main dealer was offering because I had the cash to do the deal.
How they want to jig things up doesn`t concern me.
I paid my £500 deposit, waited for the car to be delivered and then paid the rest of the cash.
At the first oppotunity, to avoid paying any interest on their "enforced" finance, I paid it off with cash.
£3k saved on a new car.

Anybody without cash would not have got that deal.
What they would have got was finance and ended up with no £3k discount and probably paying a lot more for the same car.
Cash is king and always will be.

2010

bowlhead99 wrote: »

Similarly with your car dealership, cash was not king because they didn't want your money to put into a bank account earning a small nominal interest rate (negative real rate).

Well they took my cash, what they did with it I don`t know or care.

When you have cash you can go and buy whatever you like and 9 times out of 10 you`ll get it for less simply because you have the dough.

No use saying hang on to the car `til I can sell an "investment" to raise the cash.
Usually when you need to raise some cash, you find it`s the wrong time to sell.

bowlhead99

2010 wrote: »

Anybody without cash would not have got that deal.
What they would have got was finance and ended up with no £3k discount and probably paying a lot more for the same car.
Cash is king and always will be.

You seem to be missing the point. What do you mean anybody without cash would have ended up with no £3k discount? The £3k discount was quite specifically available to people without cash.

If after taking a credit agreement, those people wanted to raid savings or investments of any sort, or raise alternative finance (the latter being quite easy with 0% credit cards in abundance and unsecured personal loans available at Tesco or Sainsbury for 3.3%), to early settle the credit agreement as you did, they're welcome to.