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I confess, I've basically skipped this whole thread, so my comments may come completely out of context.

Thirdly, and the one that I find the most absurd, is that this seems to say that any time I use my dollars, whether from earnings, savings, investments, or a bank loan, I have "borrowed" it from somewhere, and so I am left wondering why you only apply that logic to purchases such as house or car when it seems that you're applying this to all money spent, and so that means, in your world and words, I seem to be borrowing from myself every time I spend a dollar whether that is on groceries, the electric bill, medical care, college, a house, or a car. And it is at this point that you have completely lost me.

IF I understand the issue properly mid thread, perhaps Dave is referring to Alternative Value of funds. Any time we look at making a purchase, we look at what we are giving up in terms of alternative value. Something I looked at recently was buying a used car. The car was only 3 years old and had something like 13,000 miles on it. In perfect shape and half the price of a 2015. So at first glance we could have "saved" $15,000. But the gas mileage was much lower due to newer technology in the same model giving a huge boost, and there was 0% financing available on the new model while we would have paid cash for the used. So I took the purchase prices of the car, divided by 7 for the 3 year old car and 10 for the new (we tend to keep our cars about 10 years.) I looked at the amount of travel we anticipated, divided it by the respective miles/gal and again by the anticipated cost of gas. When I added all the costs, it was pretty much break even, unless gas goes over $4/gal, (likely IMO,) or we travel more than 25,000 miles/year. But then I added in the fact that the cash we would use to pay for the used car tends to make 8+% and typically much more, while we could finance the new car at 0%. The alternative value of funds put the purchase decision strongly on the new car.

But yes, you are right, the alternative value is not always about money. Often it has been for us getting DH retired faster, or the Maalox Effect of not having a loan being a priority, or even pure pleasure of buying something. All these things have value, it's just that loss of income on funds is more quantifiable. None the less, when you use funds somewhere, those funds are not available elsewhere, and you are taking those funds away from alternative options.

My two cents anyway. It's all I could allocate away from our alternative ways to use our funds.

heading off soon with Youngest to look at colleges, which suck up a huge amount of our funds, but we consider a critical allocation
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