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This is incredibly financially unsound advice. A mortgage is the cheapest, most secure debt most people will have. Even today, with current interest rates, if
by BaseballPhysics 3y ago
This is incredibly financially unsound advice. A mortgage is the cheapest, most secure debt most people will have. Even today, with current interest rates, if your goal is to buy a home, it is far more financially sound to take out a mortgage and invest your liquid cash.
Of course the more fundamental question is, should you buy a home at all? And that's a complex decision. But if you do make that decision, sinking significant liquid funds into property instead of using relatively inexpensive leverage is, as a general rule, a terrible financial decision.
- throwawaybbq1 3y agoI am not good at investing (lost money every single time I've tried). Liquid cash gets spent. I am paying off my 5 year fixed mortgage as fast as I can, as I will be up for renewal at the end of next year. Some people don't have the financial savvy or time to optimize. One size does not fit all.
- BaseballPhysics 3y agoAnd that's why normies investors shouldn't be actively investing (I.e. picking individual stocks). Dump your money into an all-market index fund and forget about it for 25 years. This requires zero "savvy" and not a lot of time. It does require a bit of research to develop some essential financial knowledge, but that's something everyone can benefit from. If you can't do that much and you're in Canada, look at Wealthsimple, which is a robo-advisors that does this all for you. If you're not Canadian, there maybe be similar robo-advisors that automate passive investing that might be worth looking at. One size may not fit all, but it absolutely fits most, and my bet is, no offense, you're actually not that special (I know I'm not).