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Seems that more leverage and more debt is in fact the answer to everything. BRB, need to take a second mortgage to buy more equity index funds. I will then use

Seems that more leverage and more debt is in fact the answer to everything. BRB, need to take a second mortgage to buy more equity index funds. I will then use the fund shares as a collateral for another loan, and you get the idea. I wonder why hasn't anyone thought of it yet! Time for a YC application!

sushshshsh 6y ago
It's only stupid if it doesn't work!
seibelj 6y ago
Step 1 - get as many loans, credit card debt, financing etc. Step 2 - spend all the cash to buy bitcoin Step 3 - bankruptcy
deleted 6y ago
[deleted]
smabie 6y ago
I don't think zeroing out home equity to buy bonds is a bad idea. After all, you either have real estate exposure or some other one, bond or equity exposure. While I haven't done the analysis, I would venture to guess that investment grade bonds at the very least have lower volatility than real estate.
- stanrivers 6y ago
  Do you think the investment grade bonds are going to yield better than the interest rate on a home mortgage ?!?
  - rgbrenner 6y ago
    Yeah I doubt a bond would pay that well.. but he does have a point about risk exposure. Your mortgage could be thought of as an investment in the local real estate market.. diversifying that risk by buying shares in a REIT could be a good strategy... especially if you're in a low-growth area (ie outside of the big cities, midwest, etc).
    - H8crilA 6y ago
      Hey, here's a shockingly simple idea: don't buy a home if you don't want equity, rent instead.
      - smabie 6y ago
        There are systematic advantages to having a mortgage vs renting.
  - smabie 6y ago
    Maybe not, but you can easily move into lower grade and higher yield debt depending on the interest rate of your mortgage.
- deleted 6y ago
  [deleted]
rgbrenner 6y ago
You jest but it could work out. Samsung has more than doubled their share price over the last 4 years. Tripled over the past decade. Additionally you have to consider that retaining the shares may be critical to maintaining control over Samsung. So that would be worth a certain premium. There's still risk, but theres risk in owning any piece of any company.
closeparen 6y ago
“Debt is morally wrong” is a useful heuristic in the context of working class people, consumption spending, and delayed gratification. In the context of the tax and liquidity challenges of the ultra-wealthy it’s just a tool.

sushshshsh 6y ago

It's only stupid if it doesn't work!

seibelj 6y ago

Step 1 - get as many loans, credit card debt, financing etc. Step 2 - spend all the cash to buy bitcoin Step 3 - bankruptcy

deleted 6y ago

[deleted]

smabie 6y ago

I don't think zeroing out home equity to buy bonds is a bad idea. After all, you either have real estate exposure or some other one, bond or equity exposure. While I haven't done the analysis, I would venture to guess that investment grade bonds at the very least have lower volatility than real estate.

stanrivers 6y ago
Do you think the investment grade bonds are going to yield better than the interest rate on a home mortgage ?!?
- rgbrenner 6y ago
  Yeah I doubt a bond would pay that well.. but he does have a point about risk exposure. Your mortgage could be thought of as an investment in the local real estate market.. diversifying that risk by buying shares in a REIT could be a good strategy... especially if you're in a low-growth area (ie outside of the big cities, midwest, etc).
  - H8crilA 6y ago
    Hey, here's a shockingly simple idea: don't buy a home if you don't want equity, rent instead.
    - smabie 6y ago
      There are systematic advantages to having a mortgage vs renting.
- smabie 6y ago
  Maybe not, but you can easily move into lower grade and higher yield debt depending on the interest rate of your mortgage.
deleted 6y ago
[deleted]

rgbrenner 6y ago

You jest but it could work out. Samsung has more than doubled their share price over the last 4 years. Tripled over the past decade. Additionally you have to consider that retaining the shares may be critical to maintaining control over Samsung. So that would be worth a certain premium. There's still risk, but theres risk in owning any piece of any company.

closeparen 6y ago

“Debt is morally wrong” is a useful heuristic in the context of working class people, consumption spending, and delayed gratification. In the context of the tax and liquidity challenges of the ultra-wealthy it’s just a tool.