Where is this coming from?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
Where is this coming from?
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.
Which statements were " false" ?
Yup, that's exactly the financial position.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
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.
Why would it matter?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 ?
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.
It's a simple yes or no question
"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
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
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.
You mentioned buying a pair of shoes or a cup of coffee in the context of a discussion on leveraged investing.I didn't say they were the same
I didn't say they were the same
Eh, you did.
Someone (Sarenco I believe) talked about investing whilst having a mortgage and you started comparing it to buying shoes or coffee.
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!
No GBI, I didn't.Sarenco said if you have debt, anything else you buy is a leveraged purchase
No GBI, I didn't.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
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
No GBI, I didn't.
I don't even know what the phrase "a leveraged purchase" means.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?