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I've found this to often also be the case, but leverage completely blows these numbers up. you'd be right if someone was willing to let you lever up 5:1 and be
by rsanek 2y ago
I've found this to often also be the case, but leverage completely blows these numbers up.
you'd be right if someone was willing to let you lever up 5:1 and bet on index funds. however you can only accomplish this with real estate, and with such leverage the required rate of return is far lower to make it worth it.
- itake 2y agoTQQQ is 3:1. Every time I ask people to factor in their time in managing the property (yes, even time spent finding the property to buy counts), they end up way behind.
- webninja 2y agoVolatility decay means if QQQ is flat, TQQQ is negative. It also consumes your dividends.
- itake 2y agoHow is that different than leveraged RE? If the property value is flat, you’re in the red due to interest.
- webninja 2y agoI suppose you could ask ChatGPT or another AI how to calculate Volatility Decay and it would give you a pretty good answer that you can compare against the fixed interest rate of the mortgage. A lazy way to calculate volatility decay might be to add the returns of TQQQ and SQQQ together, divide by 2 then subtract that against QQQ and then subtract out the dividends. But that doesn’t take into account how RE is providing you with shelter and additional SQ footage. If your total mortgage, insurance and taxes are less than renting, which is the case with mine, then there is pretty much no way to be at a loss with real estate. There’s pretty much only upside then over any 3-5 year period.