View Single Post
Old 01-12-2008, 10:34 PM   #55
Mike Oxlong
Got Oliver Klozoff
 
Join Date: Feb 2003
Exp:
Default

Quote:
Originally Posted by Radley77 View Post
Not quite (using the simple math):

$100,000 house
$10,000 down payment
$90,000 mortgage
Using 4% rate
Value is now worth $104,000
Less carrying costs at 7% on $90,000
-$6,300
=$97,700
Equity = -$2,300

Whereas:

$10,000 spent on bonds
5.75% rate
Investment is now $10,575
Well not sure where you are getting your figures from but if we are going to get silly.

$10,000 spent on bonds
5.75% rate
Investment is now $10,575
Less $1000 paid each month for rent (unless you are lucky enough to live somewhere for free)
$12,000
Looks like you are down $1425 for the year???
I guess it is a better investment


You can twist the number all you want to support your argument. Doesn't make sense to me.

I'll take leveraging my investment with the bank's money anyday. If I am paying for shelter of some sort anyway I would rather be working towards owning it and building to equity.

I think Bonds can be a good investment for some people and you should likely have a diversified portfolio with some safe investments but that is never going to get you ahead in the world.

Last edited by Mike Oxlong; 01-12-2008 at 10:37 PM.
Mike Oxlong is offline   Reply With Quote