Investors, are you using debt to your advantage and how? Debt is a very dangerous tool, but listening to Robert Kyosaki, who has long seen debt as a form of net, non-taxable money, it makes me wonder if anyone is operating debt/investment here. We are all certainly familiar with debt in the form of a mortgage, which is generally regarded as ¨good debt¨ but if one were lucky enough to grab a loan at 1-2% interest. Which a few years back was no problem at all. So by investing even in a simple SPX index, he would have outperformed his debt with inflation + yield. Where over the years due to compound interest he could have been one step ahead. Just my reasoning, which may be wrong. However, how do you perceive this?
If a person wants to cram more money into investments at a particular time and the repayment will not exceed the amount of his average monthly investment, then this is a great tool. Especially if there is the use of the exchange rate (see the current krone/dollar exchange rate) and the devaluation of money and debt by inflation.
Yes, but only in the context of investment in housing
I think having debt in the form of a mortgage is fine.
However, it is important to get into debt at a good time when the interest is not too high and the interest needs to be fixed. I mean, for real estate it makes sense to me and I will definitely use it in the future, but I would be a bit scared to borrow money for stocks.
Look, the rule here is that he who is afraid must not go into the woods... debt is always a risk (except for special opportunities) that can be profited from, but it is not always 100%
I have a 2.09% mortgage with a 10 year fix (7 years left) and over 5% interest in my savings account. By the way, this is also my second apartment. I'm renting the first one and have it paid off. Age 35...
I think it's a great way to get access to capital faster. Real estate loans seem great to me, you just always have to do the math and leave yourself some cushion. Of course there are pitfalls like bad credit or overextending yourself. Maybe at some 70% LTV the whole process really speeds up brutally. It does carry its own risk though. We'll see how the property market develops, it's unclear for now, but a cooling (albeit minor) may well come. High interest rates won't be around forever either.
Personally, I don't like debt and have never had any, but if the opportunity arose, for example with a mortgage, if you had 1% you would jump at it too, or at least consider it. So at that extreme I would probably consider it and of course I would have to think a lot about it to make it as much of a "save" as possible it wouldn't be a slam dunk... For normal loans or loans from family it's not an option at all there it's clearly never... 🙂
"I spend 500,000Kč, buy BTC and sell it for millions in a year..." :-D I don't use debt, it seems like a big risk to me. If one could borrow "for free" then maybe... but to borrow from a bank, for example, at 6-7%, then one has to pay both the interest and the profit, pay taxes, etc. and I don't know of any investment with commensurate risk where I would go for it :) I'd rather go DCA and bet on time and a good night's sleep... :)