Quote:
Originally Posted by Rhotchkiss
Here is a real life example. This card came up in REA. It was expensive. I did not have the liquidity, but I had the net worth, to buy it. I borrowed (at less than 1%), against assets and bought the card. I let that draw stay outstanding for a while. Then interest rates started to go up, so I paid off the draw over a few months. Just because you borrow to buy something does not mean you cannot afford it. It can mean you would rather not liquidate an asset to buy another asset, or it could be an arbitrage-like move (if I feel the card will go up more than the interest I pay), or the loan can be a bridge to get into an asset.
I understand this card is a bit of an extreme example, but it’s all relative. The example is just as applicable to someone who really wants a $5000 card as it is to someone buying a BN Ruth or a 33 Goudey Ruth PSA 9.
I fully agree with everyone that you should not buy something you cannot afford - that goes for everything, not just cards. But borrowing to buy a card is not necessarily a bad move or the signal of an inability to afford something.
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Totally agree. I own a small business and just bought a nice low grade Green Cobb to finish my HOF portrait set. I took an interest free “loan” from my business to pay for it and will deduct that loan amount from my year end bonus to pay it back. I have a wife, a 4 year old and another on the way and wouldn’t jeopardize our financial security for a card but have no issue borrowing from my business and deducting it from my bonuses if it’s the right card.