Timeline for Risks of using home equity for high risk market investing
Current License: CC BY-SA 4.0
8 events
| when toggle format | what | by | license | comment | |
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| Dec 16, 2020 at 8:26 | comment | added | Kaz | @jpaugh interest on the loan | |
| Dec 16, 2020 at 3:28 | comment | added | jpaugh | @Kaz I assume you mean 3% value lost due to inflation, right? | |
| Dec 15, 2020 at 17:40 | history | edited | Kaz | CC BY-SA 4.0 |
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| Dec 14, 2020 at 20:40 | comment | added | Kaz | @DeanMacGregor Fair point. What I was trying to highlight is that it's possible for a developed, relatively safe, world-class stock market to crash and not recover for a lot longer than 20 years. | |
| Dec 14, 2020 at 20:35 | comment | added | Dean MacGregor | I don't understand why you only hilighted the early 80s in your chart. Obviously if you bought-in in the late 80s then you're still underwater even today. However if you bought in like 2012 then you're doing pretty well. I don't mean to take away from your point but just as a matter of accuracy that's not the only time you could have invested to have done better than break-even against 3% cost of money. | |
| Dec 14, 2020 at 17:15 | comment | added | Grade 'Eh' Bacon | Great answer - something that would be helpful to point out, is that the noted '3% annual return comparison' would be a pretty reasonable zero risk interest rate over the period. However, since the OP will be paying interest on the mortgage, that comparison rate would be inflation (probably 1-2%) + interest to pay on their HELOC (probably 2-3%). So with a comparison rate of say 5% total annual 'risk free' return by not taking on the debt, it would take far, far longer to recover. | |
| Dec 14, 2020 at 17:12 | history | edited | Kaz | CC BY-SA 4.0 |
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| Dec 14, 2020 at 17:04 | history | answered | Kaz | CC BY-SA 4.0 |