Saturday, March 12, 2011

Buying and Selling Cars, then Investing the Cash?

I recently bought a car with a KBB value of $29k for $22k -- I put $8k down and am financing the remaining $14k at 3% interest. I have this crazy idea to sell the car, invest the cash in something like the Fairholme Fund and/or Apple. I'd continue paying off the loan at 3% interest, and would anticipate my annual returns on the investment(s) to be much more than 3% (the annualized 5 year return of Fairholme is almost 9% -- during probably the worst economic downturn we'll ever see). Obviously any investment is risky and this isn't a guaranteed way to make money, but as far as I can tell it seems like a good bet, assuming it's not illegal or there's something I'm not aware of (do I have to inform the bank if I sell the car?). Any insight/ideas/advice are much appreciated! Thanks...

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