Vending machine

Extra Cash? How to Decide Whether to Pay Off Debt or Invest

If you have extra cash or come into a sudden windfall, is it smarter to pay off your debts or invest the money?

A woman came in to my office the other day wondering this exact thing. Well, she didn’t ask the actual question… I did.

She had a mound of credit card debt, clicking away at 12% interest. What surprised me, though, was that she already had the $50,000 needed to clear out the credit card debt. Interestingly enough, she didn’t plan on using any of it to pay off the card! She wanted to invest the money instead. She estimated that she could earn much more than the 12% she was paying on the credit card, so she concluded that paying it off was a silly thing to do. Her money was best served elsewhere.

It turns out that this woman was in debt all over town, even though she had substantial assets. Never mind that her credit score was in the dumpster, she wanted to invest. I had to convince her to reconsider.

Could She Have Been Right?

To you and me, the answer in the above woman’s case might be a no-brainer. But other situations aren’t so clear cut. In order to really address this issue, you have to understand all the components of the question.

First, there is the basic financial question, which is rather simple. Ask yourself which number is greater, the return on your investment or the interest you are paying. If you are paying more interest than you could earn, you are far better off by paying down the debt.

For example: assume you owe $10,000 on a credit card. Let’s say that you actually have the $10,000 in the bank, which you could use today to get out of debt completely. The credit card interest rate is 10% and the bank is paying you 1%. At first, this seems like a slam dunk. Pay off the credit card. Right? Not so fast…

Assume that you also have an opportunity to invest $10,000 in your brother’s “can’t lose” vending machine business. He tells you that investments are earning 30%, which is quite a bit more than the 10% you’d save paying off the credit card. Now, the choice becomes more complicated.

If you pay off the credit card, you are making a guaranteed 10% return. Why? Because that’s money that you’ll keep in your pocket rather than sending it off to Visa or Mastercard.

If you invest in the vending machine business, you are guaranteed nothing. You might earn 30%… or even more! But you could also lose everything. It’s happened once or twice in the past when people invest in small businesses.

So, which is greater? A guaranteed…

Student designs skyscraper that 3D-prints custom apartments

Student designs skyscraper that 3D-prints custom apartments

A Malaysian graduate student has come up with a building frame that dispenses new apartments much like a vending machine does candy bars. Instead of buying a pre-existing apartment in a skyscraper, imagine designing one yourself and the building producing it out of thin air.

The Pod Vending Machine is a essentially a skyscraper frame with a giant 3D printer at the top. You’d design an apartment, or pod, based on a series of sub-pod designs — essentially cobbling together your place room-by-room. The building would…

This Malaysian Architect Came Up With a Skyscraper That Dispenses Apartments Like A Vending Machine

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Haseef Rafiei, a young Malaysian architect, had a thought one day: what if we could convert the real estate industry into an automated vending system? Then he went on and created the concept for the House Dispensing Skyscraper – Pod Skyscraper.

Rafiei was inspired by the avant-garde capsule structures proposed by the Metabolist Movement of Japan in the sixties. It was based around the idea of fusing organic, biological growth with architectural megastructures.

Nakagin Capsule Tower

The Nakagin Capsule Tower in Tokyo is a famous example of the Metabolism movement. Photo Credit: Wikimedia Commons

A particular problem that Rafiei wants to address with his Pod Skyscraper is the wastage of materials and resources in the construction industry as well as the abandonment of construction projects. For example, the UK construction industry is

Vintage Vending Machine Makes The Perfect Gift

Nothing says ‘I Love You’ like an old vending machine, and if it is a restored and working vintage Vendo V-80 cola dispenser then you have yourself a winner. [Jan Cumps] from Belgium was assigned the repair of the device in question by a friend. He started off with just a working refrigerator and no electronics. In a series of repairs, he began with replacing the mechanical coin detector’s switches with optical and magnetic sensors to detect the movement of the coin. These sensors are in turn connected to an Arduino which drives the dispensing motor. The motor itself had…

Why Do Cans of Diet Coke Float While Regular Coke Sinks?

In high school, my physics teacher took two cans of soda from a vending machine, plopped them in an aquarium filled with tap water, and blew our minds. The Diet Coke can floated to the top, while the regular Coke sat on the bottom. Why?

If you like thinking things through, perhaps pause here and noodle on this one.

The answer is a real forehead-smacker: sugar. While…