I really don’t think some of these people get it. They try to explain they can borrow at 5% and invest at 10%. They don’t seem to realize they can eventually save investment capitol and earn that total 10%.
Instead of living in an apartment with no equity, I’m living in a house with no mortgage and the lawn needs cutting. I might as well do it before it gets too hot.
I forgot to mention. I still pay a “Mortgage”. Since I paid off the house, the exact amount I used to send to the mortgage company now goes straight into my savings account. I pay myself that “mortgage” every month.
I get it but I will never borrow to invest. I invest my income.Why have the risk?
Get that lawn mowed its just gonna get hotter!!
Yes, but as they are saving, they're losing the 5% spread.
Assuming you're starting from a level of normal means, you WILL make more borring at 5 and investing at 10, than taking what would have gone to pay the interest and principal on the 5% and investing that instead, because you're starting from a much smaller basis.