Re: Crazy and probably stupid investment question.
[Re: 3hundred]
#3064745
08/02/22 08:46 PM
08/02/22 08:46 PM
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Joined: Jan 2011
Posts: 16,094 Central Florida
larrymopar360
Stud Muffin
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Stud Muffin
Joined: Jan 2011
Posts: 16,094
Central Florida
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Agreed. Volatile market. IF ANYTHING, I'd increase value of my home with the equity e.g. new kitchen, swimming pool, etc. and something you'll enjoy but not put into a volatile market now.
Facts are stubborn things.
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Re: Crazy and probably stupid investment question.
[Re: AndyF]
#3064759
08/02/22 09:03 PM
08/02/22 09:03 PM
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Joined: Jan 2003
Posts: 4,329 Morrow, OH
markz528
master
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master
Joined: Jan 2003
Posts: 4,329
Morrow, OH
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This idea works great sometimes. Other times you go bankrupt. 2008 is a good example of what can happen. House prices dropped, the stock market tanked and a bunch of people got laid off. In your situation you would still owe money on the house which wasn't worth what you paid for it. The equity you invested in the market is gone and you just lost your job. If you don't think that can happen then you either were not born yet in 2008, or you didn't pay any attention to what was happening around you.
Right now is an interesting situation to try out what you are suggesting. The market is down 20% but house prices are way up. If you think house prices are going to stay up forever then pull all of your equity out of your house and put it into the stock market. That way when the market goes up you'll make a ton. And if house prices stay high you won't have any problems. But, if the stock market goes down you'll lose part of your equity. If the stock market goes down and house prices drop and you lose your job then you might end up broke with no house. Well said..........
67 Coronet 500 9.610 @ 139.20 mph 67 Coronet 500 (street car) 14.82 @ 94 mph 69 GTX (clone) - build in progress......
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Re: Crazy and probably stupid investment question.
[Re: ]
#3077604
09/15/22 06:40 PM
09/15/22 06:40 PM
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Joined: Jan 2011
Posts: 16,094 Central Florida
larrymopar360
Stud Muffin
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Stud Muffin
Joined: Jan 2011
Posts: 16,094
Central Florida
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My favorite "investment" is eliminating ALL debt, especially if you are over 55 years old or so. There is no better investment for your retirement than having no debt. I know people that are headed into retirement with a mortgage or car loan and I think they are nuts. I'd add whatever extra I can even if it's small to additional principal to each payment to pay off mortgage sooner.
Facts are stubborn things.
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Re: Crazy and probably stupid investment question.
[Re: IMGTX]
#3077683
09/15/22 09:48 PM
09/15/22 09:48 PM
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Joined: May 2003
Posts: 3,350 N.W. Florida
Fat_Mike
master
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master
Joined: May 2003
Posts: 3,350
N.W. Florida
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Let's say you have 100k in your house as equity. S&P 500 pretty much guarantees a 10% reasonably safe return. Interest Rates are at 2% to 3% on a home loan. Let's say you do a cash out refinance and got that 100K in equity in cash and invested it in an S&P 500 fund. It seems to me that the investment would earn more than the interest being paid on the loan. Your home appreciation wouldn't be changed. So you would net net 7% return on your equity that would normally earn nothing. I know there are investments which would earn more money but with better returns come bigger risks so I like the S&P 500 for the lack of risk in this example. It can't be that simple. I know I am missing something here. My answer: Don't EVER gamble your house away. There are far better ways to get where you want to be than to risk being on the losing end of that proposition...
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Re: Crazy and probably stupid investment question.
[Re: TJP]
#3077688
09/15/22 10:11 PM
09/15/22 10:11 PM
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Joined: Feb 2015
Posts: 2,117 CA
crackedback
top fuel
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top fuel
Joined: Feb 2015
Posts: 2,117
CA
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OK, So is any one savvy enough to go back to the date of the original post, Calculate the idea, and see where the OP would be today ? Down about 6% 100K invested that day in SPY would be worth about 94K today It would be about flat with a conservative options strategy approach. With an aggressive strategy, the original $417-420 cost basis would be in the 355-360 range.
Last edited by crackedback; 09/15/22 11:33 PM.
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Re: Crazy and probably stupid investment question.
[Re: TJP]
#3077701
09/15/22 11:14 PM
09/15/22 11:14 PM
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Joined: May 2003
Posts: 3,350 N.W. Florida
Fat_Mike
master
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master
Joined: May 2003
Posts: 3,350
N.W. Florida
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OK, So is any one savvy enough to go back to the date of the original post, Calculate the idea, and see where the OP would be today ? I "calculated the idea" before I responded. I would NEVER gable my residence to hopefully make some money in the stock market. But, hey....some people are gamblers, and some gamblers are good at it. I'm not one of them.
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Re: Crazy and probably stupid investment question.
[Re: tubtar]
#3077778
09/16/22 11:22 AM
09/16/22 11:22 AM
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Joined: Jan 2003
Posts: 12,473 Warren, MI
71TA
I Live Here
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I Live Here
Joined: Jan 2003
Posts: 12,473
Warren, MI
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Buy low , sell high. After that , I got nothing. FUNNY! My line is, "if it were that easy we'd all be doing it". During the Great Recession my house lost 1/2 its value. Didn't matter cause we werent selling. (This past June we sold at the very top. First time in our lives after 8 homes and dozens of rental property that EVER happened.) So if the loan to equity goes bad in the upcomming recession, and we ALL know its so close you can touch it, the loan would come due and the stock market would be down 25-30-50%. I had a $100k line of equity credit (that we never used). During the Great Recession the bank took that off the table. I'll keep reading. If there are any "how to make a million" without killing myself, I'm all ears (eyes).
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Re: Crazy and probably stupid investment question.
[Re: crackedback]
#3077972
09/16/22 10:47 PM
09/16/22 10:47 PM
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Joined: Jan 2003
Posts: 15,829 Omaha Ne
TJP
I Live Here
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I Live Here
Joined: Jan 2003
Posts: 15,829
Omaha Ne
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OK, So is any one savvy enough to go back to the date of the original post, Calculate the idea, and see where the OP would be today ? Down about 6% 100K invested that day in SPY would be worth about 94K today It would be about flat with a conservative options strategy approach. With an aggressive strategy, the original $417-420 cost basis would be in the 355-360 range. I was just curious Did you by chance factor in the payments or just the flat 100K? Probably hard to do as the loan costs, and the length of the loan would be unknown variables but would also drive up the loss thanks
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Re: Crazy and probably stupid investment question.
[Re: TJP]
#3077977
09/16/22 11:02 PM
09/16/22 11:02 PM
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Joined: Feb 2015
Posts: 2,117 CA
crackedback
top fuel
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top fuel
Joined: Feb 2015
Posts: 2,117
CA
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OK, So is any one savvy enough to go back to the date of the original post, Calculate the idea, and see where the OP would be today ? Down about 6% 100K invested that day in SPY would be worth about 94K today It would be about flat with a conservative options strategy approach. With an aggressive strategy, the original $417-420 cost basis would be in the 355-360 range. I was just curious Did you by chance factor in the payments or just the flat 100K? Probably hard to do as the loan costs, and the length of the loan would be unknown variables but would also drive up the loss thanks no, rates have changed a little from about 4.25 to 6% monthly interest only would be 350 at start and about 500 this month. There's also tax rates to consider as well if you want to get deep.
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Re: Crazy and probably stupid investment question.
[Re: Sniper]
#3078584
09/18/22 09:35 PM
09/18/22 09:35 PM
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Joined: Jan 2003
Posts: 15,829 Omaha Ne
TJP
I Live Here
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I Live Here
Joined: Jan 2003
Posts: 15,829
Omaha Ne
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i keep getting junk mail that says [if you give] $25.00, it will turn into $75.00. i'm still trying to find out how i can do that for myself ! get a good copier LOL, My wife was making a birthday card with multiple 100 dollar bills and it was flipping amazing other than the paper itself how hard it was to tell the difference. Watched a movie recently where the C/F'r used hair spray to stiffen the bills and create texture If one did a bunch of 10's or 20's on better paper they could likely slide quite a few Might be illegal, be careful you know there are a few here that would drop a dime on you. https://legalbeagle.com/7612138-illegal-copy-currency.html Thanks for the info but we're good, only did one side, and yes we changed the scale, it was for a birthday card. But it was flippin amazing to look at the copied paper card next to the real thing and was really hard to tell the difference
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Re: Crazy and probably stupid investment question.
[Re: IMGTX]
#3087703
10/20/22 08:13 AM
10/20/22 08:13 AM
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Joined: Mar 2022
Posts: 3 USA
russelgarner
member
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member
Joined: Mar 2022
Posts: 3
USA
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Yes, this is a good idea for investment, and you may not think that this is a stupid investment, many do, but the percentage of the capital increase will be lower, of course. And it seems that while you are doing all these processes, you will spend a lot of time and effort. In my opinion, it is best to invest money in trading now. Yes, it won't be easy in the beginning because you need to understand how the trading market works, but then the money you invest will work for you. And by the way, I usually read everything about trading and brokers on this site -- https://www.youngandthrifty.ca/the-ultimate-guide-to-canadas-discount-brokerages/. Maybe someone will also be interested.
Last edited by russelgarner; 10/21/22 07:14 AM.
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