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Home equity loans are an obvious one. Or cash out refis. If you have 1m equity, you could for example take out 500k at 3% interest and buy a dividend stock pay
by adam_arthur 5y ago
Home equity loans are an obvious one. Or cash out refis.
If you have 1m equity, you could for example take out 500k at 3% interest and buy a dividend stock paying 6% and effectively double your yield on that equity (plus added risk from the debt, though).
Or use the equity to buy a rental property.
But most people aren't too finance savvy so you're right that it may not affect them in practice.
- harambae 5y ago>500k at 3% interest and buy a dividend stock paying 6% Just curious, what dividend stock do you think will pay you 6% without very high risk? The closest I can think of to what you're describing is BP stock but with the recent rise isn't hitting 6% anymore. (I-Bonds are capped at 10k + 5k per year and typically aren't that high.)