Fat Wallet listener Hugo Schuitemaker and his trusty Excel spreadsheet made a startling discovery. An amount invested at the beginning of the year would have to earn a 19.5% return to catch up to a 10% discount on his child’s school fees.
Six mini episodes to wrap up the recording year. Pink bubbles to get us through it. A huge thanks to all of you for downloading our #podcast 107,000 times since we launched. Thank you for sharing your questions, comments, financial concerns. It’s such a pleasure to host the show. We look forward to the next 83 episodes! . . . #money #investing #investment #podcast #bubbles #krone #maclife #justonelap #fatwallet
“Sometimes schools offer a discount for paying the full annual amount upfront. In my case its 10% if I pay the full annual amount of school fees by 1 January. So this naturally called for an Excel spreadsheet. Upfront payment vs Monthly payment.
I worked out that the 10% discount is a huge savings for me. If I chose not to make use of the discount and paid the monthly amount, whilst keeping the balance of my capital invested, I would need to make a return of 19.5% over the year, just to equal (break even) with the discount I would receive from the school! It’s a no-brainer for me.
I would even argue that if you can loan money at an interest rate of less than 19.5% (out of you bond for example), with a 10% discount on school fees it would be in your best interest (excuse the pun) to do so…”
In the first of six holiday mini podcasts, Simon and I discuss the merits of taking a lump-sum discount instead of investing it. We also drink some bubbles and eat popcorn. Yay, holidays!
- Listen / download here.
- Subscribe to our RSS feed here.
- Subscribe or rate us in iTunes.
- Sign up here to receive an email every time a new show goes live.
Meet the Just One Lap team at these free live events
Click here to meet the Just One Lap team at one of our live, free events.