http://www.debtkid.com/should-you-ever-borrow-money-to-invest Get Out of Debt @ DebtKid.com Thu, 18 Mar 2010 04:12:56 -0700 http://wordpress.org/?v=2.9.2 hourly 1 http://www.debtkid.com/should-you-ever-borrow-money-to-invest/comment-page-1#comment-20983 stinky Mon, 14 Sep 2009 03:51:25 +0000 http://www.debtkid.com/?p=6679#comment-20983 I have two distinctly different family member stories- 1. An extremely wealthy (prob'ly in the billions, now) person who earned his money slowly, and paid cash for absolutely everything as he went. He NEVER borrowed. When things crashed in the 80's, he was fine, and he still is. 2. Another couple who had always been financially responsible inherited a couple million about 8 years ago. At that time, their home was already paid off, so they were set to live a comfortable life, and even help their kids out. Fast forward to now- they invested ALL of their money in some scheme; it had done so well for them that they went ahead and borrowed against their paid for home to invest more $ in it. They have now lost everything, and aged in their late sixty's, will be losing their home in the next year or so to short sale, if they are so fortunate, or else to FC. Things unforeseen happen all the time, including in businesses that we ourselves may be running. We stand to come out better if we have not borrowed. I had a successful business which was sunk by debt. If I had been patient and built it without incurring debt, I wouldn't have landed myself in bankruptcy. When business declines you can readjust a lot of things to get your bottom line down, but once you have borrowed money, you are stuck with those payments come what may. I know that the juries are split on Dave Ramsey, but what he preaches about (not) borrowing money really does make sense. His advice would have saved my example #2 a lot of heartache, and me too for that matter. I have two distinctly different family member stories- 1. An extremely wealthy (prob’ly in the billions, now) person who earned his money slowly, and paid cash for absolutely everything as he went. He NEVER borrowed. When things crashed in the 80’s, he was fine, and he still is. 2. Another couple who had always been financially responsible inherited a couple million about 8 years ago. At that time, their home was already paid off, so they were set to live a comfortable life, and even help their kids out. Fast forward to now- they invested ALL of their money in some scheme; it had done so well for them that they went ahead and borrowed against their paid for home to invest more $ in it. They have now lost everything, and aged in their late sixty’s, will be losing their home in the next year or so to short sale, if they are so fortunate, or else to FC.
Things unforeseen happen all the time, including in businesses that we ourselves may be running. We stand to come out better if we have not borrowed. I had a successful business which was sunk by debt. If I had been patient and built it without incurring debt, I wouldn’t have landed myself in bankruptcy. When business declines you can readjust a lot of things to get your bottom line down, but once you have borrowed money, you are stuck with those payments come what may. I know that the juries are split on Dave Ramsey, but what he preaches about (not) borrowing money really does make sense. His advice would have saved my example #2 a lot of heartache, and me too for that matter.

]]> http://www.debtkid.com/should-you-ever-borrow-money-to-invest/comment-page-1#comment-20960 LC Sat, 12 Sep 2009 04:18:13 +0000 http://www.debtkid.com/?p=6679#comment-20960 I think that part of it is always having enough cash to cover your loans. Never borrow more than you can cover. Commercial loans are great for business, you get a huge return on investment if it is all borrowed money. I can't say that borrowing is totally bad. Gambling on day trading? Something else entirely. You sound like an addict -- always looking for some new way to gamble. I think that part of it is always having enough cash to cover your loans. Never borrow more than you can cover. Commercial loans are great for business, you get a huge return on investment if it is all borrowed money. I can’t say that borrowing is totally bad. Gambling on day trading? Something else entirely. You sound like an addict — always looking for some new way to gamble.

]]> http://www.debtkid.com/should-you-ever-borrow-money-to-invest/comment-page-1#comment-20950 Craig Fri, 11 Sep 2009 15:41:43 +0000 http://www.debtkid.com/?p=6679#comment-20950 It sounds counteractive and borrowing money to invest you are playing the interest rates vs the % gained and will be a very stressful battle. It sounds counteractive and borrowing money to invest you are playing the interest rates vs the % gained and will be a very stressful battle.

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