TPB X thread

[1HuskerDad]

 

[1HuskerDad]

 

[1HuskerDad]

 

[Dr.DrakeRamoray]

How can you have any pudding if you don’t eat your meat!

 

[Jim14510]

I understand small business owners do this, but most people would not. Nor should they. Yes the market on average returns much more than 3.5%, but it's not guaranteed. The 3.5% is guaranteed. Most people wouldn't want to put their house on the line for the chance at higher returns in the market.

I'm a bit hypocritical here because I invest while having a mortgage, but I am on a 15 year mortgage. I saw way too many people who took on 30 year mortgages for all the house they could afford, and moved every 5 to 10 years, whose houses never appreciated to the point they had substantial equity, and now they're 60 with a mortgage. Plus, there's the whole risk of spending that extra money rather than investing it, which sinks most people who try this plan.

Over 30 years I win. Guaranteed. Whether or not you can afford the risk during those 30 years depends on the person. 90% of the country lives paycheck to paycheck so yes you are speaking for the majority. I'm not trying to beat 3.5% every year. I'm trying to beat 3.5% over my working lifetime.

 

[MtnHusker]

Be that as it may....the point stands that most people should not put their houses on the line for the potential of better returns. It would be insane to suggest that for most people.

If someone has some financial commonsense the risk isn't that big. I'm not saying put your entire house on the line. But for example I have clients who have their primary homes paid off so they have a Line Of Credit (Home Equity Loan) on their house that is available if they want to buy something. Have a $600,000 and pull out 30% or $180,000 using that to buy a condo outright to rent out VRBO. They make $30,000/yr profit from the rental which will have the Home Equity Loan paid off relatively quickly. If interest rates drop down they can get a mortgage on it and pay it off quickly. It depends on your comfort level with Risk and your business acumen.

My brother literally built a real estate empire by doing stuff similar to this. He and his business partners had limited funds 25 years ago but leveraged what they had and now own over 100 rental units, multiple commercial buildings plus numerous restaurants and bars. It was not without stress but paid off.

Every investment has risks including the stock market. If you are a savvy investor you can make some serious coin putting your money and equity to work for you.

 

[MtnHusker]

 

[Mavsker]

Over 30 years I win. Guaranteed. Whether or not you can afford the risk during those 30 years depends on the person. 90% of the country lives paycheck to paycheck so yes you are speaking for the majority. I'm not trying to beat 3.5% every year. I'm trying to beat 3.5% over my working lifetime.

If you ignore risk, yes on average you win. But you can't really just ignore risk and call it a better investment.

And it's not even close to a guaranteed. You don't get to count all 30 years, because this person allocating extra to their mortgage is paying it off in 15, so they're going to match your RoR in the last 15 years, and they can invest more in those 15 years, since they now have no mortgage.

 

[1HuskerDad]

 

[1HuskerDad]

I can’t wait for college football.

Imagine waking up

Cup of coffee

Full slate of college football ahead of you

Your team has a manageable noon opponent. Nothing crazy but you get to watch your boys.

You get a simultaneous big noon big 10
showdown to follow. Good game down to the wire. You watch the last 20 minutes of the game after yours ends.

You get a beautiful 2:30 game to watch on your main screen. It’s OU vs a new prime time SEC opponent. It’s a big time Utah vs Kstate big 12 showdown. It’s a good game and you watch the whole damn thing.

The prime time night games come on. You’re beer-ed up, caffeinated, and ready for a big time game in Happy Valley or Death Valley. YES.

And finally, you’re ready for one last taste. You got Michigan State at USC kicking off at 10:30 local time. Why? Don’t ask me. Doesn’t make much sense! But that’s college football. Goodbye “pac 12 after dark” hello “wtf is this game and why am I awake”. It’s beautiful.

It was a perfect day.

We are getting so close. 🥰

 

[1HuskerDad]

Very cool!

 

[God is a Husker]

 

[Jim14510]

If you ignore risk, yes on average you win. But you can't really just ignore risk and call it a better investment.

And it's not even close to a guaranteed. You don't get to count all 30 years, because this person allocating extra to their mortgage is paying it off in 15, so they're going to match your RoR in the last 15 years, and they can invest more in those 15 years, since they now have no mortgage.

Ok 15 years I still win. At 30 years I'm still ahead.

Of course that doesn't mean Johnny high school dropout doing day trading is going to win.

I'm not taking risk out of the equation. The risk of investment being less than the reduced principle is at some point there during that 15 years. Especially in the first few years.

At 15 years the person investing (again within reason) wins.

Realistically the average person wouldn't have the stomach for it and withdraw. Either spend the gains or panic at a fall, sell off and tell everyone how bad the market sucks.

 

[1HuskerDad]

 

[MtnHusker]

 

[MtnHusker]

 

[MtnHusker]

 

[MtnHusker]

 

[HughJanus]

 

[Mavsker]

Ok 15 years I still win. At 30 years I'm still ahead.

Of course that doesn't mean Johnny high school dropout doing day trading is going to win.

I'm not taking risk out of the equation. The risk of investment being less than the reduced principle is at some point there during that 15 years. Especially in the first few years.

At 15 years the person investing (again within reason) wins.

Realistically the average person wouldn't have the stomach for it and withdraw. Either spend the gains or panic at a fall, sell off and tell everyone how bad the market sucks.

No, at 15 years you don't automatically win. That's nonsense.

A person taking your advice in January 2000 averages a 2.5% return over the next 15 years. So you've made 2.5% while the person paying off debt made 3.5%. Now he gets to invest 50% more in a market making 11% the next 10 years. You win if there's not those economic downturns that happen with some regularity.