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!