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> That is to say that if you have bought a $1m home in 1948, it will be worth, in average today, taking inflation into account, $1 745 809,82. The same investme
by nanidin 6y ago
> That is to say that if you have bought a $1m home in 1948, it will be worth, in average today, taking inflation into account, $1 745 809,82. The same investment in the S&P500 will be worth $74,426,964.60.
Yes, but does this account for the fact that you need to be leveraged at $1 million at margin rates for that period of time? Or is it just looking at the upside of putting a million in the S&P500?
It reminds me of the ole “there are lies, damn lies, and statistics” saying. Without context I’m not sure how much to trust this.
- titanomachy 6y agoWell, if you don't have $1m then the house needs to be leveraged too. Interactive Brokers[0] has margin rates lower than my mortgage. I don't think they'd give you the 10x leverage that you can get on a house though. [0] https://www.interactivebrokers.com/en/index.php?f=46376 https://www.interactivebrokers.com/en/index.php?f=46376
- nanidin 6y agoYes, but did IB offer rates lower than your mortgage rate over the course of your mortgage? Your margin rate fluctuates daily, and you’re subject to margin calls that could bring the whole house of cards tumbling down. I did not do the math, but it seems like you’d need to simulate a stochastic process to come out with the likelihood of winning in this scenario, similar to the various FIRE calculators out there [0]. [0] https://www.firecalc.com/ https://www.firecalc.com/