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Link Posted: 2/22/2021 9:23:00 PM EST
Strange.  I recently thought I saw a general discussion thread asking if one should pay of his house or invest the money instead and continue paying a mortgage.  There were a whole lot of financial geniuses suggesting debt was good.  A thread like this comes along and the dominant view is don't gamble your house.  I can only assume it is not the same people giving the advice.

House debt is guaranteed, you know you have to pay, with interest, no matter what.  The investments are speculation with no guarantees.  Things like taxes and risk complicate things that look mathematically beneficial.

Banks and financial institutions full of professional investors "invest" in you when they give you a home loan with whatever interest rate.  Too many people believe they can do better than the banks and make riskier investments than the banks make in them.
Link Posted: 2/22/2021 9:35:29 PM EST
[Last Edit: 2/22/2021 9:37:09 PM EST by spidey07]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By GFrancisco:
Strange.  I recently thought I saw a general discussion thread asking if one should pay of his house or invest the money instead and continue paying a mortgage.  There were a whole lot of financial geniuses suggesting debt was good.  A thread like this comes along and the dominant view is don't gamble your house.  I can only assume it is not the same people giving the advice.

House debt is guaranteed, you know you have to pay, with interest, no matter what.  The investments are speculation with no guarantees.  Things like taxes and risk complicate things that look mathematically beneficial.

Banks and financial institutions full of professional investors "invest" in you when they give you a home loan with whatever interest rate.  Too many people believe they can do better than the banks and make riskier investments than the banks make in them.
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Lol. Free money at inflation rates is still free money. The rate on my refi cash out is set in stone, 30 years, 3%.

That’s inflation. I win no matter what. Banks make money via leverage, so I use leverage to be my own bank.

What you see as a dominant view is people are dumb when it comes to managing money. Sorry. Needed to be said.
Link Posted: 2/22/2021 9:41:26 PM EST
Link Posted: 2/22/2021 9:42:19 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By GFrancisco:
Strange.  I recently thought I saw a general discussion thread asking if one should pay of his house or invest the money instead and continue paying a mortgage.  There were a whole lot of financial geniuses suggesting debt was good.  A thread like this comes along and the dominant view is don't gamble your house.  I can only assume it is not the same people giving the advice.

House debt is guaranteed, you know you have to pay, with interest, no matter what.  The investments are speculation with no guarantees.  Things like taxes and risk complicate things that look mathematically beneficial.

Banks and financial institutions full of professional investors "invest" in you when they give you a home loan with whatever interest rate.  Too many people believe they can do better than the banks and make riskier investments than the banks make in them.
View Quote

Apples and oranges.
The other threads talk about making extra payments to pay off a house vs using that extra payment money to invest.
This thread talks about using the equity in a paid off house to invest.  Some say yes, most are saying no.

I think the older members with paid off houses (or close to it) are the ones saying no, mostly.
Link Posted: 2/22/2021 9:44:14 PM EST
I think the pay your house off culture here is silly.

If you can't beat 4% a year with your money, I don't have anything nice to say.
Link Posted: 2/22/2021 9:52:37 PM EST
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Originally Posted By timeless:
I think the pay your house off culture here is silly.

If you can't beat 4% a year with your money, I don't have anything nice to say.
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So you can guarantee better than 4% ?
Link Posted: 2/22/2021 10:13:37 PM EST
[Last Edit: 2/22/2021 10:14:19 PM EST by jaqufrost]
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Originally Posted By JWC3G:


So you can guarantee better than 4% ?
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This is largely a time horizon question. Lowest 30 year rolling average gain is about 7%.  Highest 30 year rolling average on record is about 15%. (Assuming a broad market US index based investment.)

So when you can get long loan notes and purchase assets without risking margin calls, it makes sense to take the note and invest.

It makes even more sense when politics drive inflation and home loans are likely to be inline with or below actual inflation.


I pman to die with a home loan. I'll have millions in assets to cover what's left on the home loan. Overall I'll leave more assets to my children because of that choice. Its an informed choice that is made through understanding the risks involved along with our political and monetary positions.

Link Posted: 2/22/2021 10:14:21 PM EST
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Originally Posted By JWC3G:


So you can guarantee better than 4% ?
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Originally Posted By JWC3G:
Originally Posted By timeless:
I think the pay your house off culture here is silly.

If you can't beat 4% a year with your money, I don't have anything nice to say.


So you can guarantee better than 4% ?


Over 30 years anybody can. Now loan me 100 million at 4%, better yet make it 3%. 30 years. Fuck I’ll split the difference and make it 3.5% for 60 years.

Where the fuck do I sign?
Link Posted: 2/22/2021 10:16:48 PM EST
fuck no
Link Posted: 2/22/2021 10:19:04 PM EST
Apples and oranges.
The other threads talk about making extra payments to pay off a house vs using that extra payment money to invest.
This thread talks about using the equity in a paid off house to invest.
View Quote


Debt is debt.  

If you owe money on your house with an interest rate and don't pay it off, you owe that money and interest to the lender.

If you own a house and take out a loan for that same amount of money, you owe that money and interest to the lender.  

If you owe someone 100000 with a 4% interest rate for 30 years.  You pay the same amount in interest to the lender in either case above.

If you can guarantee you can beat a 4% interest rate with no risk for loss, also understanding you will be paying taxes on investment income you make, have at it.  If you can beat 4% with risk and are comfortable taking that chance have at it.  

If it so easy guaranteeing you can beat the interest rate of your loan, why would any financial institution in the business of making investments("experts") be so foolish to take their money and loan it to you for less return instead of it investing those things that "easily" beat that interest rate?

Link Posted: 2/22/2021 10:19:33 PM EST
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Originally Posted By togadelic:
fuck no
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This right here.  ^^
Link Posted: 2/22/2021 10:26:21 PM EST
[Last Edit: 2/22/2021 10:27:34 PM EST by spidey07]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By GFrancisco:


Debt is debt.  

If you owe money on your house with an interest rate and don't pay it off, you owe that money and interest to the lender.

If you own a house and take out a loan for that same amount of money, you owe that money and interest to the lender.  

If you owe someone 100000 with a 4% interest rate for 30 years.  You pay the same amount in interest to the lender in either case above.

If you can guarantee you can beat a 4% interest rate with no risk for loss, also understanding you will be paying taxes on investment income you make, have at it.  If you can beat 4% with risk and are comfortable taking that chance have at it.  

If it so easy guaranteeing you can beat the interest rate of your loan, why would any financial institution in the business of making investments("experts") be so foolish to take their money and loan it to you for less return instead of it investing those things that "easily" beat that interest rate?

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Originally Posted By GFrancisco:
Apples and oranges.
The other threads talk about making extra payments to pay off a house vs using that extra payment money to invest.
This thread talks about using the equity in a paid off house to invest.


Debt is debt.  

If you owe money on your house with an interest rate and don't pay it off, you owe that money and interest to the lender.

If you own a house and take out a loan for that same amount of money, you owe that money and interest to the lender.  

If you owe someone 100000 with a 4% interest rate for 30 years.  You pay the same amount in interest to the lender in either case above.

If you can guarantee you can beat a 4% interest rate with no risk for loss, also understanding you will be paying taxes on investment income you make, have at it.  If you can beat 4% with risk and are comfortable taking that chance have at it.  

If it so easy guaranteeing you can beat the interest rate of your loan, why would any financial institution in the business of making investments("experts") be so foolish to take their money and loan it to you for less return instead of it investing those things that "easily" beat that interest rate?



Because they make all their gravy on the front end and most people don’t stay in a home for 30 years. That and they make their money via leverage.

It’s just math.
Link Posted: 2/22/2021 10:31:43 PM EST
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Originally Posted By grey50beast:
I had this discussion with my uncle recently in regards to risk and what I should be willing to risk for my new business.  "All of it", was his answer.

A few years back, he needed $300k to put down on 3 new locations for his biz.  His wife was 100% against a reverse mortgage on his paid off house.  He talked her into it, and last year his business was bought out by a larger corp, in which they paid him a lump sum in the "a lot of" millions, and kept him on in an executive capacity.  Risky as all hell, but to the victor goes the spoils.  He said he makes more now, working for the company that bought him out, than he ever paid himself(and I'm sure he paid himself 150-200k/a year).  They paid off the house again in a lump sum, then just sold it to move into an awesome million dollar town home.

YMMV, but risk and tenacity is what will separate the middle and upper class earners IMO.
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A poll of over 10,000 millionaires in this country says you’re wrong.
Link Posted: 2/22/2021 10:40:27 PM EST
[Last Edit: 2/22/2021 10:41:35 PM EST by woodsie]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By GFrancisco:


Debt is debt.  

If you owe money on your house with an interest rate and don't pay it off, you owe that money and interest to the lender.

If you own a house and take out a loan for that same amount of money, you owe that money and interest to the lender.  

If you owe someone 100000 with a 4% interest rate for 30 years.  You pay the same amount in interest to the lender in either case above.

If you can guarantee you can beat a 4% interest rate with no risk for loss, also understanding you will be paying taxes on investment income you make, have at it.  If you can beat 4% with risk and are comfortable taking that chance have at it.  

If it so easy guaranteeing you can beat the interest rate of your loan, why would any financial institution in the business of making investments("experts") be so foolish to take their money and loan it to you for less return instead of it investing those things that "easily" beat that interest rate?


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Originally Posted By GFrancisco:
Apples and oranges.
The other threads talk about making extra payments to pay off a house vs using that extra payment money to invest.
This thread talks about using the equity in a paid off house to invest.


Debt is debt.  

If you owe money on your house with an interest rate and don't pay it off, you owe that money and interest to the lender.

If you own a house and take out a loan for that same amount of money, you owe that money and interest to the lender.  

If you owe someone 100000 with a 4% interest rate for 30 years.  You pay the same amount in interest to the lender in either case above.

If you can guarantee you can beat a 4% interest rate with no risk for loss, also understanding you will be paying taxes on investment income you make, have at it.  If you can beat 4% with risk and are comfortable taking that chance have at it.  

If it so easy guaranteeing you can beat the interest rate of your loan, why would any financial institution in the business of making investments("experts") be so foolish to take their money and loan it to you for less return instead of it investing those things that "easily" beat that interest rate?




This isn't a difficult question to answer.  It starts with the basic understanding that banks aren't lending their own money.
Link Posted: 2/22/2021 10:42:17 PM EST
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Originally Posted By woodsie:


This isn't a difficult question to answer.  It starts with the basic understanding that banks aren't lending their own money.
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Yep.
Link Posted: 2/22/2021 10:45:27 PM EST
At a fixed 2% interest rate?  You bet max out every retirement account t I can come up with.  Att stock is paying 7% div right now.  The worst thing that can happen is you need to keep paying house payments.   Something you know you can do.
Link Posted: 2/22/2021 10:50:58 PM EST
Because they make all their gravy on the front end and most people don’t stay in a home for 30 years. That and they make their money via leverage.

It’s just math.
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While they appear to make more up front, it is a bit of an illusion.   Actual dollars, yes.  You owe the APR on whatever your remaining loan balance is.

In simple terms, If you owe 100000 dollars on the the house the first year, you have to pay 4% percent of that amount.  100000 x 4% = 4000.  As the loan get paid down, less money is owed, but you still owe that 4% each year on that amount owed.  Towards the end of the loan, less total money is owed, but whatever that amount is, it is still 4%.  Unless the terms of the loan change, no matter what, you owe the same percentage of your current debt each year.  The banks may make more money up front, but they are still getting a guaranteed 4% percent off of you on whatever of money they have invested in you.  There isn't any leverage they have other than you want a product that costs more money than you have and they have money.  

If you have $1000000000000 and a 4% loan, and can pay it off or invest in something else, you are taking risk trying to beat that.

If you have $100 and 4% loan, and can pay off that amount or invest in something else, you are still taking risk trying to beat it.  

Yes it is just math.  Some people certainly pull it off, but most do not.  Those who are comfortable with spending money they don't have (debt) typically don't limit it to their homes compounding their risks.

Again, why would a financial institution in the business of making investment be foolish enough to invest in you at 4% for any amount, whether it is a thousand or a billion, if they could have a guaranteed greater return in something else with the same risk?
Link Posted: 2/22/2021 10:58:22 PM EST
[Last Edit: 2/22/2021 11:01:05 PM EST by spidey07]
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Originally Posted By jaqufrost:
Yep.
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Originally Posted By jaqufrost:
Originally Posted By woodsie:


This isn't a difficult question to answer.  It starts with the basic understanding that banks aren't lending their own money.
Yep.


Morpheus- you think that’s air you’re breathing?  Humph.
Link Posted: 2/22/2021 10:58:31 PM EST
[Last Edit: 2/22/2021 11:01:31 PM EST by JWC3G]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By jaqufrost:
This is largely a time horizon question. Lowest 30 year rolling average gain is about 7%.  Highest 30 year rolling average on record is about 15%. (Assuming a broad market US index based investment.)

So when you can get long loan notes and purchase assets without risking margin calls, it makes sense to take the note and invest.

It makes even more sense when politics drive inflation and home loans are likely to be inline with or below actual inflation.


I pman to die with a home loan. I'll have millions in assets to cover what's left on the home loan. Overall I'll leave more assets to my children because of that choice. Its an informed choice that is made through understanding the risks involved along with our political and monetary positions.

View Quote


I’ve got 5 years left and $230k owing on a mortgage, I’m not taking chances thinking I can time the market. When the house is paid off I will never have a mortgage again.

I’ve got over 7 figures invested in equities so I’m not anti-investment.
Link Posted: 2/22/2021 11:02:00 PM EST
Originally Posted By UTex86:
Lots of threads lately about whether or not to pay a mortgage off early, but let's look at it another way.

If your home was paid off, would you pull cash out of it (assuming you could do so at a low interest rate) to invest and/or upgrade your home/property, or do anything else with the cash?
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A mortgage free house is a giant waste of equity, you're just sitting on a pile of cash that may, or may not increase in value all the while paying relevant taxes and upkeep.

Or, long story short, do what I did, mortgage yourself up to the eyeballs, buy a bunch of properties and become a evil capitalist landlord pig...
Link Posted: 2/22/2021 11:03:42 PM EST
You do realize banks loan made up money right?  Depending of when they can loan anywhere from 10 to 100 times the money they have on deposit.  So a sap has 100k in cds and they can loan out anywhere from 1 to 10 million on that at 4% but why waste the time.   They make the loan and sell it off and make instant money.  Rinse and repeat. 30 year fixed is 2.5% right now.   If you can’t beat that you need to let someone else do your investing.  The math is easy.  The emotions of no debt has value though as well.
Link Posted: 2/22/2021 11:04:42 PM EST
This isn't a difficult question to answer.  It starts with the basic understanding that banks aren't lending their own money.
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Yep, they attempt to beat the investment their lenders (bank account holders) have in them.  Banks can and have failed at this.  Historically that means the account holders have lost their investments in the banks too when the banks fail, though that is different now with FDIC, government bailouts, etc. and that presents a whole lot of collective problems outside of the context of the original question.  

The banks' investment in  the mortgages is very conservative as far a risk goes compared to many other investments out there.  The interest rates they charge for mortgages and other loans to people are based on credit scores, income, history, etc.  Higher rates get charges for the riskier people and the statisticians  have figure most of this out.  Furthermore, mortgages are always backed by collateral (the house itself).  When banks got too aggressive with their investments in mortgages, like loaning more money than homes were worth, or gambling on the "guarantee" that real estate always goes up, banks got into trouble, but even when they lost the bet, they were still doing better than the homeowner that got foreclosed on.
Link Posted: 2/22/2021 11:04:59 PM EST
Absolutely. Your equity is investable capital.
Link Posted: 2/22/2021 11:26:18 PM EST
Yes,  Absolutely.
I would have to find the right investment opportunity, but the principle is sound.

I did something similar a few years ago; borrowed against my life insurance policy.  I made about 4,000% on it.
Link Posted: 2/23/2021 12:09:55 AM EST
No way in hell.  My home and cars are paid for.  If worse comes to worse, I can live frugally off of my military retirement for quite a while.
Link Posted: 2/23/2021 12:21:56 AM EST
Not enough information.

If i was making good money and had no issues paying off the house over time? Sure.

If I wasn’t making good money and would be out on the street if the market went tits up?  Of course not.

Rf
Link Posted: 2/23/2021 5:15:28 AM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By NoDakWolfPack:


A poll of over 10,000 millionaires in this country says you’re wrong.
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Originally Posted By NoDakWolfPack:
Originally Posted By grey50beast:
I had this discussion with my uncle recently in regards to risk and what I should be willing to risk for my new business.  "All of it", was his answer.

A few years back, he needed $300k to put down on 3 new locations for his biz.  His wife was 100% against a reverse mortgage on his paid off house.  He talked her into it, and last year his business was bought out by a larger corp, in which they paid him a lump sum in the "a lot of" millions, and kept him on in an executive capacity.  Risky as all hell, but to the victor goes the spoils.  He said he makes more now, working for the company that bought him out, than he ever paid himself(and I'm sure he paid himself 150-200k/a year).  They paid off the house again in a lump sum, then just sold it to move into an awesome million dollar town home.

YMMV, but risk and tenacity is what will separate the middle and upper class earners IMO.


A poll of over 10,000 millionaires in this country says you’re wrong.



No one cares about finally being a millionaire at 70 when they are crippled.

Take your stupid poll of millionaires under 50. All you will find  is risk taking. Exclusively.
Link Posted: 2/23/2021 5:45:27 AM EST
Equity is the part of your house that you own.

How much of your house do you want to own?
Link Posted: 2/23/2021 5:57:23 AM EST
I would not risk my home.
Link Posted: 2/23/2021 6:14:18 AM EST
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Originally Posted By FlyingGorilla:


I'm sure that worked out well for people who had 10 rentals with renters who haven't paid a penny of rent with Uncle blocking evictions for the past year.
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My fiancé has 5 rentals that her parents built, one has a mortgage on it because it was a trailer that she replaced with a new one a few years back. These are typically rented to college kids. Well, the trailer hasn’t paid rent since the .gov told everyone they couldn’t be evicted. She got a 90% payment from the state, but it took a long time and now she needs another. Don’t even know if they will pay her a second time, still can’t get rid of the renter.
Link Posted: 2/23/2021 6:19:21 AM EST
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Originally Posted By grey50beast:

lol


That's for the layman.  If you haven't already figured out that financial advice from Dave Ramsey and the likes is tuned towards the lowest common denominator, then you might be one of them.  Depending on age, there is such thing as smart debt. For instance, I could have paid for my wife's CRV with cash in the middle of 2019 for 25k. But I had perfect credit with Honda Financial from having a company car when working for Acura.  They gave me .9% financing, I put down 6k and invested the rest.  I honestly should have put nothing down, because the cash I held and invested is up 50 ish% since then.  I sold that car recently with 30k miles on it for 23.5 to Carvana, and pulled out a ton of equity.

There is smart debt. Does it include cars with high interest, credit cards, etc?  No, but if I need a 150k credit line to buy some machinery that will produce a million dollar product, then you're damn right I am going to do anything to get my hands on that.
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The biggest mistake mankind has ever made was assuming that somehow he as an individual was the exception to the rule. Dave Ramsey might be geared toward knuckle dragging mouth breathers, but a lot of people, average people who thought they knew how to invest, jumped off tall buildings in the 1920’s. I’m sure it felt great on the way down to know they weren’t lower classs rubes who didn’t know how to invest.
Link Posted: 2/23/2021 6:29:22 AM EST
No credit card debit.

No car payments.

No mortgage.

No debt.

I don't like bills or owing money more than I like the idea of pulling quick cash out of my home.


Link Posted: 2/23/2021 6:31:00 AM EST
100% of the foreclosures happen on houses with a mortgage. Do you think that would never happen to me? I am sure most of those that it happens to didn’t either. Sometimes people get caught up in a perfect storm for reasons that were totally unpredictable.

Do I think I could beat current mortgage rates with my investments? Probably but it isn’t guaranteed and involves risks which are hard to quantify.

My want of gain doesn’t exceed my fear of loss. This is largely do to being comfortable with where I am currently financially and knowing that my conservative approach will yield me more than enough for my future. I don’t need to take unnecessary risks to achieve my goals.

People often take on increasing amounts of risks proportionate to their dissatisfaction with their current position. At the extreme end you have someone who buys a ton of lottery tickets. They feel hopeless in their current situation and believe their only chance of getting rich is hitting the lottery. investing with borrowed money is a lot different than buying lottery tickets but is still characteristic of someone who isn’t content with their financial situation and wants to take increased risks for a chance of greater wealth than they could achieve by merely investing their own money.
Link Posted: 2/23/2021 7:13:07 AM EST
No.

Owning a home free and clear is an investment in your security and your families security.

Link Posted: 2/23/2021 7:21:53 AM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By 4nok8:
Equity is the part of your house that you own.

How much of your house do you want to own?
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About 25%.
Link Posted: 2/23/2021 7:26:56 AM EST
[Last Edit: 2/23/2021 7:28:54 AM EST by ecreps]
I did. Cash out refi at 2.6%.

Invested in an apartment syndication. So far I'm at a little over 12% return in under a year. Should be in the mid teens minimum based on the projected cap rate for the next 3 years.

It isnt risk free, but I feel confident it'll beat 2.6% over the 4 year lifetime of the investment.

You never own your house anyway, you still have to pay the government for it every year.
Link Posted: 2/23/2021 7:27:32 AM EST
Nope.
Link Posted: 2/23/2021 7:30:39 AM EST
[Last Edit: 2/23/2021 7:33:05 AM EST by BustinCaps]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By snubfan:
No.

Owning a home free and clear is an investment in your security and your families security.

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It’s not though. It’s an albatross that eliminates flexibility in the short term, and destroys wealth over the long term.

The more expensive the paid off house, the worse the effect.

There are a million reasons someone SHOULDN’T mortgage a house to invest. They are nearly all linked to being foolish or undisciplined. Character defects.

The other couple reasons are asset diversification/hedging and being retired.

Ultimately, it depends on feels. Most people are scared, and cut themselves short in everything as a result. Finances, careers, etc.
Link Posted: 2/23/2021 7:32:10 AM EST
Hell no!
Link Posted: 2/23/2021 7:50:21 AM EST
I'm not an investment genius like everyone else here but mortgaging your house to buy into the market at this time seems like a bad idea.

Link Posted: 2/23/2021 7:54:11 AM EST
Lol no
Link Posted: 2/23/2021 8:29:03 AM EST
Another school of thought. Every dollar you spend could be used to pay down debt. How much money do people waste on $5 coffee or
take out food 5 nights a week? Why not invest your beer money and see what kind of money you can make ?
Link Posted: 2/23/2021 8:54:55 AM EST
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Originally Posted By Lowdown3:



Winner winner chicken dinner!

You would have figured people learned not to use their house as an ATM after the last go around, but that history has scrolled off the screen for most now...
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It’s not the same.  In the housing run up of the 2000s people used the money for consumption purposes not investment purposes.  They would refi their house for a car, vacation or a pool but not for investing.  There’s quite a big difference.  

Link Posted: 2/23/2021 8:55:01 AM EST
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Originally Posted By BustinCaps:

It’s not though. It’s an albatross that eliminates flexibility in the short term, and destroys wealth over the long term.

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How exactly does owning a house destroy wealth over the long term? People must have a place to live. If you rent  you are just pissing away money and have nothing to show for it. My experiences with houses:

Bought for 40k sold for 72k five years later

Bought for 80k sold for 150k fifteen years later

Bought for 160k sold for 250k ten years later

While not stellar returns in all cases it wasn’t bad while accomplishing the task of a roof over the head.
Link Posted: 2/23/2021 9:00:06 AM EST
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Originally Posted By BustinCaps:



No one cares about finally being a millionaire at 70 when they are crippled.

Take your stupid poll of millionaires under 50. All you will find  is risk taking. Exclusively.
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The average age of those 10,000 millionaires was 52.    If you’re crippled at 52 you’re so bad at managing your health I don’t care what you do with money.
Link Posted: 2/23/2021 9:00:23 AM EST
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Originally Posted By Doodlebug:


How exactly does owning a house destroy wealth over the long term? People must have a place to live. If you rent  you are just pissing away money and have nothing to show for it. My experiences with houses:

Bought for 40k sold for 72k five years later

Bought for 80k sold for 150k fifteen years later

Bought for 160k sold for 250k ten years later

While not stellar returns in all cases it wasn’t bad while accomplishing the task of a roof over the head.
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Over that same time, how did the market perform?
Link Posted: 2/23/2021 9:13:45 AM EST
There were people that felt the same way before the crash of 1929, they had enough in the bank to more than cover their mortgage.
When the market crashed and the banks failed they lost their homes.
Link Posted: 2/23/2021 9:14:51 AM EST
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Originally Posted By Doodlebug:


How exactly does owning a house destroy wealth over the long term? People must have a place to live. If you rent  you are just pissing away money and have nothing to show for it. My experiences with houses:

Bought for 40k sold for 72k five years later

Bought for 80k sold for 150k fifteen years later

Bought for 160k sold for 250k ten years later

While not stellar returns in all cases it wasn’t bad while accomplishing the task of a roof over the head.
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In some cases renting makes more sense than ownership. How much did you spend on taxes, insurance, upkeep and repairs during the time you owned those properties? Did you pay cash or did you spend interest as well? All those expenses lower your profit.
Link Posted: 2/23/2021 9:16:07 AM EST
Yes. At 2.5% there's no way the math doesn't work.

The stock market could have half it's historic 15-20 year returns and I'd still be winning.
Link Posted: 2/23/2021 9:16:18 AM EST
I would not unless I had not other choice. I have already paid for my house once. Not interested in doing it again.
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