Possible to earn money like this?

• Glen999

  16 Jan 05, 20:58

  Just a thought:
  
  My friend has a car. no more loan.
  
  Can he refinance my car to get extra $$$ and then put this money in foreign currency to higher interest (6% for NZ dollars) which is higher than the current car internret (+/- 2%)....
  
  then I can use the earned interest to pay my car maintenance..
  
  will it work?
• Qitai

  16 Jan 05, 21:05

  Originally posted by Glen999:

  Just a thought:
  
  My friend has a car. no more loan.
  
  Can he refinance my car to get extra $$$ and then put this money in foreign currency to higher interest (6% for NZ dollars) which is higher than the current car internret (+/- 2%)....
  
  then I can use the earned interest to pay my car maintenance..
  
  will it work?

  2.2% is flat rate. You need to compare to effective rate, not flat.
  
  Currency investment involves risk (I.e, AUD and NZD can devaluate against SGD). Are you willing to take that risk?
• devmeister

  16 Jan 05, 22:08

  you'd be better off trading forex. pretty similar.
• Glen999

  17 Jan 05, 19:17

  let say, 100,000,, can earn 2,000-3,000 per year leh... (ROE infinite coz you don't use your own money)
  
  NZD against SGD may up or may down.. this is the risk lor...
  
  but what if I have my son to go to NZ university anyway two years later.. might as well buy it..
• Qitai

  19 Jan 05, 07:53

  Originally posted by Glen999:

  let say, 100,000,, can earn 2,000-3,000 per year leh... (ROE infinite coz you don't use your own money)
  
  NZD against SGD may up or may down.. this is the risk lor...
  
  but what if I have my son to go to NZ university anyway two years later.. might as well buy it..

  If you have son going to NZ or AU to study, then you should invest anyway. So, what is left is for you to calculate the effective Interest rate and compare that to the NZ, AU interest rate.
  
  But you say pay car maintenance earlier.