Property Investment Decision

galway_blow_in said:
Your the fellow who heaps scorn on someone for paying sub 7% on bread and butter purchases like motoring loans while now espousing complicated financial instruments as an alternative to property investing
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Where is this coming from?:confused:

I haven't heaped scorn on anybody and I certainly haven't recommended any complicated financial instruments. I've simply corrected your false statements.

But, yes, I often recommend paying down expensive debt ahead of investing outside a pension vehicle. I happen to think that's sound advice for most folk.
 
Sarenco said:
Where is this coming from?:confused:

I haven't heaped scorn on anybody and I certainly haven't recommended any complicated financial instruments. I've simply corrected your false statements.

But, yes, I often recommend paying down expensive debt ahead of investing outside a pension vehicle. I happen to think that's sound advice for most folk.
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Which statements were " false" ?
 
galway_blow_in said:
Which statements were " false" ?
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  1. That the return on stocks in most markets has been flat over the last 20 years; and
  2. That it is not possible to invest in stocks on a leveraged basis if you don't have any loans outstanding.
 
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galway_blow_in said:
You might as well say if someone has a mortgage, they are then borrowing money for everything else from a cup of coffee to a pair of new shoes
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Yup, that's exactly the financial position.

A borrower has a choice what to do with every euro that comes in their hands - pay down their debt or buy something else. If they choose to invest that euro, they are doing so on a leveraged basis.

Incidentally, in many circumstances I think it makes a lot of sense to invest in stocks through a pension ahead of paying down a mortgage ahead of schedule. So I've no principled objection to investing on a leveraged basis.
 
Sarenco said:
Yup, that's exactly the financial position.

A borrower has a choice what to do with every euro that comes in their hands - pay down their debt or buy something else. If they choose to invest that euro, they are doing so on a leveraged basis.

Incidentally, in many circumstances I think it makes a lot of sense to invest in stocks through a pension ahead of paying down a mortgage ahead of schedule. So I've no principled objection to investing on a leveraged basis.
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Do you think most people ( who have a mortgage) view a purchase of filling up the car with petrol each week as a " leveraged" purchase ?

Or other mundane regular expenditure
 
galway_blow_in said:
Do you think most people ( who have a mortgage) view a purchase of filling up the car with petrol each week as a " leveraged" purchase ?
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Why would it matter?

Do you really think that investing while holding debt is any different to taking out a new loan in the same amount to make an investment? The balance sheet effect is identical and that's all that matters.
 
Sarenco said:
Why would it matter?

Do you really think that investing while holding debt is any different to taking out a new loan in the same amount to make an investment? The balance sheet effect is identical and that's all that matters.
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It's a simple yes or no question
 
galway_blow_in said:
It's a simple yes or no question
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"Most people" don't have a very intuitive view of money - certainly in terms of asset/liabilities and cash flow. It's not a "bad" choice to have a cup of coffee - it's just not divorced from a decision to invest or not. Most companies fail due to insolvency rather than lack of assets or business and most people get into difficulty for a similar reason. Applying a similar sense of financial analysis to one's personal life is a good thing
 
EmmDee said:
"Most people" don't have a very intuitive view of money - certainly in terms of asset/liabilities and cash flow. It's not a "bad" choice to have a cup of coffee - it's just not divorced from a decision to invest or not. Most companies fail due to insolvency rather than lack of assets or business and most people get into difficulty for a similar reason. Applying a similar sense of financial analysis to one's personal life is a good thing
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Appreciate your answer but I feel this discussion has become more about philosophy than anything meaningful in a practical reality way

Such philosophy means nothing to most
 
galway_blow_in said:
Do you think most people ( who have a mortgage) view a purchase of filling up the car with petrol each week as a " leveraged" purchase ?

Or other mundane regular expenditure
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Purchases/Expenditure and Investments are not the same.

It’s possible to borrow to invest; spreadbets, CFDs, ETFs with leverage under the bonnet, Investment Trusts, etc.
 
Gordon Gekko said:
Eh, you did.

Someone (Sarenco I believe) talked about investing whilst having a mortgage and you started comparing it to buying shoes or coffee.
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Sarenco said if you have debt, anything else you buy is a leveraged purchase, I then posed the question if " buying coffee or shoes" if you have a mortgage was thus a leveraged purchase.

I didn't say investments and purchases were the same, you just chose to interprete my post that way
 
Sarenco said:
You mentioned buying a pair of shoes or a cup of coffee in the context of a discussion on leveraged investing.

But perhaps you were just being philosophical!;)
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Indeed I did and you confirmed to me ( few posts above) when I asked for clarity as to whether spending money on coffee or shoes was a leveraged purchase if holding debt
 
galway_blow_in said:
Indeed I did and you confirmed to me ( few posts above) when I asked for clarity as to whether spending money on coffee or shoes was a leveraged purchase if holding debt
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No GBI, I didn't.

Please re-read what I actually said in response to your post.
 
galway_blow_in said:
Sarenco said if you have debt, anything else you buy is a leveraged purchase, I then posed the question if " buying coffee or shoes" if you have a mortgage was thus a leveraged purchase.

I didn't say investments and purchases were the same, you just chose to interprete my post that way
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No, you said:

“You might as well say if someone has a mortgage, they are then borrowing money for everything else from a cup of coffee to a pair of new shoes”

Sarenco spoke only of investing.

The only person who has conflated investments and purchases is you.
 
Sarenco said:
No GBI, I didn't.

I don't even know what the phrase "a leveraged purchase" means.
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I know you love pedantry but even you can't wriggle out of this one

You said people were buying coffee or shoes with borrowed money if they held debt
 
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