06-23-2006, 10:03 PM
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#42
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#1 Goaltender
Join Date: Jul 2002
Location: Calgary
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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!
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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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