What 'jjawssd' was actually asking was an explanation of the math you used to come up with those particular numbers. He's doubting that you could pay for the gas using the interest on $30K. While you do have a point that one should pay attention to the 'cost of money', it also seems possible that you were neglecting to account for the withdrawals to purchase gas along the way.
10,000 gallons of gas in 20 years equates to about 40 gallons per month. At $2/gallon, this is $80 per month. If you plug these into a compound interest calculator (https://www.investor.gov/tools/calculators/compound-interest...) with -$80 for the monthly addition, you find that at a 3.25% APR you can pay for your gas and still have the principal remaining at the end.
3.25% is currently higher than you can find for any US bank account, but as you say, there are definitely places in the world where this is possible. At 1% (still high by US current standards), you'd have $15,000 of your principal left at the end --- a $5,000 difference from not receiving any interest. Worth considering, but not too likely to be a deciding factor.
3.25% is definitely pretty feasible. Interest rates on bank accs right now aren't a great reflection of supply and demand. But if you look at average returns on the market, say by looking at a decent first proxy for the market like the S&P 500, well that's one which has a 7% inflation-adjusted (i.e. real return) return in its history. In recent years it's been a bit higher as the market is rebounding. In general I'd assume its on the high end (century of cheap oil and all), but 4% is still a realistic long-term return figure, and so 3.25% is therefore quite doable with a moderate level of risk in a diversified portfolio. (oh and the above is not just inflation-adjusted, but also excluding dividend payouts which aren't insignificant).
Thanks for doing the math, I didn't take the time.
FWIW 3.25% happens to be exactly what a term deposit will pay here in mexico for 90 days+
I understand that banks in other countries wouldn't do that, however you don't have to take much more risk over a bank to get 3.25% in most of the world I would imagine
By the way, what's the price of gasoline currently in Mexico? My impression is that it's historically been a regulated price, but I read something a while ago that said it was moving toward deregulation. I wasn't clear if this meant the price was expected to go up or down.
