Quote:
Originally Posted by Slava
I said against a single house because that's what it is: one house. That specific house might be awesome, or might be average, so who knows whether it's a better investment than the other houses on the street or in the city? It just happens to be the house you have a mortgage on currently, and you live there. So what I'm saying is that investment wise, and purely investment wise, we have no idea whether it's a good investment or not. And theoretically you might save three percent in interest on that $150k, but you could easily surpass that in the market.
I should note that although you don't seem to think it's possible, advisor's will give advice based on a situation and not only whether they stand to profit. I would say that if the person here was close to retirement and the decision was to pay off their 'forever' house entirely I might provide different advice. To me that's a completely different situation. I take this as a guy a couple decades or more away from retirement, paying a mortgage and maybe staying in the house, maybe not. That doesn't scream pay the mortgage down to me, because it's basically savings for the next house, if that makes sense?
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It's possible, its more likely to lose that money or break even, especially when the break even bar is raised and you have a market that isnt doing as well as it has historically
What my issue is, its throwing the advice of using the money to invest while you are borrowing. it's counterproductive and it only serves to pay the advisors and bankers.
Sure, we might have an idea as to what their age range is, but we dont know what their goals are (like moving into a better house), how aggressive they want to get it and more importantly we dont know what their risk tolerance is. Someone has to have a high risk tolerance to want to do leveraged investing. Would you not agree that if someone has a moderate or slightly higher than moderate risk tolerance shouldn't be talked into leveraged investing?