Quote:
Originally Posted by sabotai
Yeah, but I'm EXTREMELY lazy, so I wouldn't even do the hour of work to sell off the cards.
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You would finish up without doing anything. If you just keep the gas you'll do better. If you can cover the taxes year one you'd have to make like a very high yield on the investment to do better with the cash.
If we give the cash the benefit of the doubt and say that a household uses 2000 gallons a year, figure it takes you 4 years to use the gas (this allows for the inevitable price increases).
If you invest 9,000 and somehow miraculously make 15% annually with interest credited monthly you'd make 7,338. Call it 5k after taxes.
If you take the gas you've made 18k.
Gas 18k > cash 14k. And that is if you are lucky beyond the realm of realistic outcomes in the current economy.
A more likely scenario is you make 6% - which is 2,900. Call it 2,200 after tax.
Do you really have to think about 18k (gas) versus 11,200 (cash)?
Now if you are paying 20%+ interest on the credit cards or can't put together the money for the taxes the first year then I guess you've got a tougher decision. I think even those scenarios are going to work out for the gas because it's early enough in the year to manipulate your taxes and taking the money that you no longer spend on gas and paying the principal down on the credit cards is still going to pay in the long run.