GoFuckYourself.com - Adult Webmaster Forum - View Single Post - How is buying a house, a great investment?

Boobzooka · 03-11-2007, 12:06 AM

Quote:

Originally Posted by will76

Everything you said is great but there is nothing wrong with borrowing. Borrowing allows you to gain leverage and you can do a lot more at one time.

Unless I hit the power ball I will always borrow money, I don't care if I make 10 million a year. I like making money off of the bank's money. If I can borrow at say 8% and get a return of 12% than I am making 4% off the BANK's money, not my own. I can do that x 10.

Absolutly nothing wrong with borrowing money. Say you pay cash for an investment, so now you are tieing up a lot of your money to save what 8% interest fees, not to mention if you had a loan you could deduct the interest, so your money is making very little for you if you pay cash for something. Instead of taking 100K and buying 1 house cash, buy 5, 100K houses and put 20K down on each (20% typically required for investment property purchases and to insure a better interest rate.) it's all about leverage and making money off of the bank's money.

I understand, but my point is don't advise people to risk more than they can afford to lose. Using the scenario above, what would you do if all your paper wealth was tied up in 5 mortgages that you now can't get rid of if/when the economy collapses and you suddenly have no income. I'm afraid people are making too many assumptions, basing their financial decisions looking back on the last twenty or thirty years, and drawing lessons that conflict with more common-sense priorities like securing a place to live. I believe there's plenty of reason to worry that 2007-2037 will be nothing like 1976-2006, so I am trying to take a longer view, and conclude that historically the land-owners always do better than the serfs. No tin foil hat pics please. I'm not telling anyone to buy a cave and horde ammo. But there are fatal flaws in the way we create "money" that will finally be exposed if diminishing energy supplies halt what those funny economists call "growth". Need before greed, that's all I'm saying.