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It does make financial sense for many though, because risk exists. In a big downturn would you rather be laid off with a paid-for house or laid off with a mortg
by claudiulodro 3y ago
It does make financial sense for many though, because risk exists. In a big downturn would you rather be laid off with a paid-for house or laid off with a mortgage and a bunch of stocks that just plummeted in value?
- deleted 3y ago[deleted]
- jandrewrogers 3y agoI would much rather prefer the latter actually because the risk is lower. People tend to seriously discount the risk of non-liquidity in these situations, which is the scenario the former sets up. I know multiple people that discovered this the hard way. Houses without mortgages aren't anywhere close to free to live in and they can have very little liquidity in a big downturn.
- RhysU 3y agoAlso, it's easy to sell X% of a stock portfolio for 0 <= X =< 100 but difficult to do the same for a house. (This is possible with stocks for some X outside those bounds too!)