Does Dave like the idea of zero percent financing? Nope!Show Transcript
QUESTION: Does Dave think it’s okay to finance things at zero percent interest? Detrick may be disappointed with the answer.
ANSWER: We just finished an extensive study of more than 10,000 millionaires. Not a single one of these folks said they became rich by borrowing money to buy things at zero percent interest. We know banks charge interest on loans, so how is it you think they’re loaning money at “zero percent interest?”
Is it possible the pricing of the item has the interest rate built into it? I think the chances of that are pretty high. In addition, companies offering this kind of financing have highly researched data that tells them the vast majority of people who take out zero percent loans don’t pay them off in the specified period of time. What happens if you don’t live up to the terms of those contracts? It becomes a regular loan, and they back charge you for the interest.
So, on average you’re paying for it all. I don’t know why you’d want to play with snakes, Detrick. Snakes bite. And debt destroys your most powerful wealth-building tool—your income.