BUY CAR WITH CASH

  • Buy new car with cash – $30,000
  • 6 years later car is worth $9,500 
  • 6 year loss $20,500 in depreciation
  • 12 years later car is worth practically nothing.
  • First 5 years cars depreciate 15-25% each year.
  • See graph below published on Edmunds website.

FINANCE CAR PURCHASE AND PAY FOR WITH MORTGAGE NOTE

  • Buy car with financing – $30,000 car loan
  • Car loan $440/month for 72 months (6 years)
  • Buy MORTGAGE NOTE for $30,000 which is paying $450/mo for 144 months (12 years).
  • Use income from note to pay car payment for first 72 months (6 years).  
  • Next 72 months have an income of $450/month or $32,500 at end of 6 years.  
  • The $32,500 is enough to pay back you initial $30,000 or use to buy another car (free car).

PAY FOR YOUR HOME WITH MORTGAGE NOTE INCOME

  • Buy home with financing – $300,000 home loan
  • Home loan $1432/month at 4% and 360 months
  • Buy note for $300,000 at 10% paying $2632/month for 360 months.
  • Use income from note to pay house payment  
  • Have $1200/month excess cash flow per month for 360 months or 30 years. 
  • This is $14,400 extra passive income per year and over life of loan is a whooping $432,000!
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