Yes. That's the dirty little secret that's kept from the average person. Wealth builders use OPM (other people's money) and their own, to achieve their wealth.
You are kidding, right? Or are you really saying that everybody who owns a house can get a mortgage where the cost of the interest payments are less than what you can get from another safe investment?
If so, why is ANYBODY lending them the money, rather than just investing it themselves in that other safe investment?
I am guessing the "other investment" has some real risk associated with it, which could well go south, leaving them deeper in debt and with nothing to show for it.
I am aware that with tax considerations some people can make a marginal profit without too much risk this way. Usually though the wise investment counselors will only recommend this strategy to pay down higher-interest debt, NOT to use your house as an asset for what is a margin account investment.
Besides, even if you DID decide to take the risk, and you mortgaged the entire amount of a house worth $500,000, and invested it ALL at a somewhat higher interest rate, AND figured out a way to get THAT interest out without paying more in taxes than you saved from your interest payments, you are going to be nowhere NEAR clearing $1200 a month.
Of course, you could just go get a 100-million-dollar unsecured loan, and invest all THAT in your "higher-paying" investment, wait a year, and close it out a millionare.
Odd that so few people seem to do that. :-)
Yes. That's the dirty little secret that's kept from the average person. Wealth builders use OPM (other people's money) and their own, to achieve their wealth.