My rule of thumb is always pay off all debt every month, if you can’t afford to pay it off at the end of the month, you shouldn’t be buying it.
Borrowing money from the equity in your home to invest is very risky business and I would never do it.
Leave Canada, live where it's cheap
Live in an RV, Cabin, or Boat
No Debts / >30K Year of Income
No Debts / >50K Year of Income
No Debts / >80K Year of Income
Make Due with Government Pension
Work until I die
My rule of thumb is always pay off all debt every month, if you can’t afford to pay it off at the end of the month, you shouldn’t be buying it.
Borrowing money from the equity in your home to invest is very risky business and I would never do it.
You've never had a car loan?
It's fundamentally the same as keeping a mortgage so you can invest your earned cash.This quote is hidden because you are ignoring this member. Show Quote
I’m assuming you mean credit card debt?This quote is hidden because you are ignoring this member. Show Quote
Everyone has to stop referencing past experiences... the lending world changed in 2016This quote is hidden because you are ignoring this member. Show Quote
NopeThis quote is hidden because you are ignoring this member. Show Quote
No it’s not, because investments can tank, and if you used the equity in your home to invest and it goes to zero you now have to pay that money back.This quote is hidden because you are ignoring this member. Show Quote
It's not for everyone but I like Dave Ramsey's approach to building wealth. Get rid of your consumer debts, live off a budget, invest 15% of pay, rest goes towards paying your house off early. Consistency, discipline, planning, and investing wisely is the road to wealth. The one thing that always gets me is how cheap housing can be in the US depending on state. Can get a pretty pimpin' family home in Texas for $250k USD.
IMO I find Beyond sometimes has too many posts about squeezing every mathematical advantage out of a dollar when it's also not terrible to just pay off a mortgage with a low interest rate.
Also, @89coupe great mentality re: cars or purchases in general. I read a thread in the past where members only ever buy cars in cash and it's something I've heard echoed in Dave Ramsey's podcasts. You haven't truly earned something until you've paid for the whole thing in cash which sounds like a pretty sour truth to swallow. I had to take out a $6000 LOC on my latest car purchase which I felt bad about, but the alternative was to let the deal pass by and I didn't want to do that.
Leveraging through a term mortgage or through a HELOC is largely the same thing (tax details etc aside).This quote is hidden because you are ignoring this member. Show Quote
Always learn something when these types of discussions surface
Ultracrepidarian
If I have $100k and i invest that into something and that investment goes to zero, I lose the $100kThis quote is hidden because you are ignoring this member. Show Quote
If I use $100k from equity in my home and that investment goes to zero I lose that $100k and now I owe another $100k.
we're disagreeing on two different things.This quote is hidden because you are ignoring this member. Show Quote
Did I just get Inceptioned or did I get Marth-ed? So confused.This quote is hidden because you are ignoring this member. Show Quote
he's forgetting that 100k cash can also be used to reduce debt instead of invest, so if you choose to not reduce debt, you have "borrowed" the amount that remains on your mortgage.This quote is hidden because you are ignoring this member. Show Quote
No I’m assuming a person has no debt, so no mortgage, no credit. You mentioned using using equity from your home to invest, yes or no?This quote is hidden because you are ignoring this member. Show Quote
No Mr Buster. I don't care what the well groomed guy in your avatar connotes.This quote is hidden because you are ignoring this member. Show Quote
Scenario B ($100 - $100 - 'another' $100) is clearly worse than scenario A ($100 - $100).
Betcha they didn't teach that in your fancy schmancy CFA class.
If it’s taking you 25yrs to pay back $100k... then you probably shouldn’t have “invested” $100k at the blackjack table to begin with
The whole idea of leverage is that you get access to more than you have. You have $100k and invest it, realize 10%, you make $10k. You have $100k, you leverage it against your free and clean house, you now have $500k and that 10% is now $50k. Simple concept. The vehicle you choose to use for your investment is what makes it smart or stupid to do, not the leverage itself
It's Marth to me.This quote is hidden because you are ignoring this member. Show Quote
Same. Always like seeing different points of view, especially financial stuff. One day I could hope to be a beyond baller haha.This quote is hidden because you are ignoring this member. Show Quote
The second 100k and the third 100k are the same dollars, you are double counting.This quote is hidden because you are ignoring this member. Show Quote
If you borrow 100k, invest it and lose it all, you still only owe 100k. The only difference is borrowing it gives you access to 100k you might otherwise not have had, or had better things to do with it, and you incur some % of that in interest fees.
Don’t need a CFA to know that 0 -1 doesn’t equal -2
Last edited by killramos; 07-18-2019 at 09:41 AM.
Originally posted by Thales of Miletus
If you think I have been trying to present myself as intellectually superior, then you truly are a dimwit.
Originally posted by Toma
fact.This quote is hidden because you are ignoring this member. Show Quote