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Question for everyone:
https://gladerebooted.net/viewtopic.php?f=8&t=3584		 Page 1 of 2
Author:  Elmarnieh [ Fri Jul 23, 2010 3:13 pm ]
Post subject:  Question for everyone:
Assumptions for this question:
There is no inflation - real value of currency is standard with respect to time
The loan is covered by insurance that you do not pay so that if the entity does not repay the loan the insurance covers it. (0 risk)


Would you lend for ten years 500 dollars to an entity that would at the end of those ten years pay you back 500 dollars?
Author:  Taskiss [ Fri Jul 23, 2010 3:16 pm ]
Post subject: 
Depends on what they'll do with it. I will obviously get no monetary benefit, if there's an emotional benefit I might loan the cash.

Otherwise it's the same as burying a wad of bills in the backyard.
Author:  Rorinthas [ Fri Jul 23, 2010 3:20 pm ]
Post subject:  Re:
Taskiss wrote:
Depends on what they'll do with it. I will obviously get no monetary benefit, if there's an emotional benefit I might loan the cash.

Otherwise it's the same as burying a wad of bills in the backyard.


This.
Author:  TheRiov [ Fri Jul 23, 2010 3:29 pm ]
Post subject: 
Would said assets be protected from other things such as lawsuits? Would my net value place me in a lower tax bracket?
Author:  Vladimirr [ Fri Jul 23, 2010 3:38 pm ]
Post subject: 
Is this the whole "OMG I got a big tax return" thing?
Author:  DFK! [ Fri Jul 23, 2010 4:09 pm ]
Post subject: 
Nope. Opportunity cost means they need to pay me a premium.
Author:  Vindicarre [ Fri Jul 23, 2010 4:13 pm ]
Post subject: 
Ten years is a long time. The opportunity cost would be too high unless there was another sort of benefit. I guess I'm a Taskiss, DFK! hybrid.
Author:  Kaffis Mark V [ Fri Jul 23, 2010 4:39 pm ]
Post subject: 
I'm with Vindi.

And this is some kind of lead-in to something in which we're going to compare real inflation vs. some investment vehicle by negating the first portion of the stipulations, is my guess.
Author:  Rafael [ Fri Jul 23, 2010 4:47 pm ]
Post subject: 
No, I would not lend him the money in these circumstances.

Even if the money I was loaning at 0 interest was being used as capital in some sort of venture I was invested in, maybe through owning equity or corporate bonds, I still would not loan the money because undisciplined credit can poison the acuity of the business. This, of course, assumes that interest rates aren't 0, otherwise the credit wouldn't be too cheap and therefore undisciplined. However, stating that inflation is zero makes it nearly impossible for such a scenario.
Author:  Rynar [ Fri Jul 23, 2010 5:03 pm ]
Post subject: 
Based on the information given? No.
Author:  Corolinth [ Fri Jul 23, 2010 6:18 pm ]
Post subject: 
Do I know this entity?
Author:  Diamondeye [ Fri Jul 23, 2010 7:21 pm ]
Post subject:  Re: Question for everyone:
Depends. Is this entity someone or something I care about personally? How much is 500 dollars in terms of my own financial position?
Author:  Raltar [ Fri Jul 23, 2010 7:23 pm ]
Post subject: 
If I know and care about the entity(family, for example) I am loaning the money to, I would. If it was just some faceless entity, hell no.
Author:  Micheal [ Fri Jul 23, 2010 7:30 pm ]
Post subject:  Re:
Rynar wrote:
Based on the information given? No.


/agree

If it were someone I cared deeply for, and it was going to take ten years for them to pay me back, I would just give them the money and not worry about ever getting it back.

Random person or not someone I truly cared for, without more information, not a chance.

So, a smattering of us have answered. Why are you asking this question and why now?
Author:  Elmarnieh [ Fri Jul 23, 2010 8:22 pm ]
Post subject: 
Ok second question:

Assumptions for this question:
There is no inflation - real value of currency is standard with respect to time
The loan is covered by insurance that you do not pay so that if the entity does not repay the loan the insurance covers it. (0 risk)


Would you lend for one hour 500 dollars to an entity that would at the end of that one hour pay you back 500 dollars?
Author:  DFK! [ Fri Jul 23, 2010 8:31 pm ]
Post subject: 
No. Opportunity cost means they need to pay me a premium.
Author:  Taskiss [ Fri Jul 23, 2010 8:42 pm ]
Post subject: 
Next question: Would you hand someone $500 if they agreed to hand it right back, correct?
Author:  Micheal [ Fri Jul 23, 2010 8:43 pm ]
Post subject: 
Without further information, no.

I end up paying every year, so I'm not loaning the government money interest free, if that is where you are going.
Author:  Elmarnieh [ Fri Jul 23, 2010 9:09 pm ]
Post subject: 
Actually this is about the Austrian theory of interest and the only response that really matters is Xeq's answers.
Author:  Micheal [ Fri Jul 23, 2010 9:17 pm ]
Post subject: 
Xeq hasn't answered.
Author:  Elmarnieh [ Fri Jul 23, 2010 11:23 pm ]
Post subject: 
I know :(
Author:  shuyung [ Sat Jul 24, 2010 12:13 am ]
Post subject: 
To the first question, with the exception of family or friends from whom I would accept the guise of "a loan" while personally considering it "a gift", no.

To the second question, maybe. It depends on the circumstances. I can envision scenarios where, although I would receive no monetary benefit from the loan, I could benefit from enhanced goodwill or perhaps an owing of a favor.
Author:  Micheal [ Sat Jul 24, 2010 12:19 am ]
Post subject:  Re:
Elmarnieh wrote:
I know :(


Oh, it is bait. I understand now.
Author:  Elmarnieh [ Sat Jul 24, 2010 11:33 am ]
Post subject: 
Not bait exactly - I've asked him in the one thread to read a book and he hasn't said he would all the while making seriously wrong assumptions about some fundamental points of economic decision making.

This was a way to get him to realize the factors he uses to make those decisions in an effort to get him to understand how everyone does.
Author:  Diamondeye [ Sat Jul 24, 2010 4:31 pm ]
Post subject:  Re: Question for everyone:
Probably not. If someone asks me for $500 for one hour, I'm going to be mighty suspicious of what they might do with it, insurance or not.
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