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Old 06-23-2006, 10:03 PM   #42
Agamemnon
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Quote:
Originally Posted by DementedReality
well, there are a few scenarios to consider

1) you could create a cash flow crunch, which might make you incur debt at not so favourable rights, such as credit card debt

2) the investments are rarely guaranteed, so it might be 9% this year, but maybe 2% another year. if you arent skilled at the balancing act, it could bite you

3) overall though, if you know what you are doing, its a good ratio, but if you dont, it could be trouble

I think the most important factor is point 1 though, cash flow to service the debt. i suppose it comes down to how it is all structured, which comes to point 3, knowing how to do this to begin with!
For sure. I'm not advocating anyone go out, borrow their total available credit, and invest the entirety. That would be over-leveraging yourself.
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