Quote:
Originally Posted by Phanuthier
Its both. I think if you are in the business of rental properties and you don't consider mortgages on your rental properties as a debt, you might want to find a accountant pretty soon here.
As for what I would consider the "best type of debt" ... I would go with :
a) student loans. Gives you a solid foundation for the future. If you don't need it for tuition, you can invest it as well, at good rates.
b) cars? I think they get better rates?
c) real estate? or what should go here is whatever gives you the best rate
Either way, if I could generate any extra available cash, I'd put it in the market somehow. Like I said, my parents did the real estate gig and I get it... but for the risk/returns/etc I would take the market any day of the week.
If you are worried about risk, I would argue throwing your money at the NASDAQ, DOW, S&P500 are better in terms of return, liquidity and safety.
|
Completely agree with the last point: I should have written earlier that the home is a
concentrated, levered debt. If you told someone you were going to take out a 200K loan and use it all to buy one single stock, they would hopefully tackle you right there. But with a home, we perceive that concentration to be good
The only place I would part ways with you is on car loans. Cars, almost by definition, depreciate. So the money used to buy a car is (practically) never going to be recouped. You're really paying solely for the utility in this case.