This is a smart man..

IntrovertedMagma

February 27, 2018

394 upvotes

/r/MGTOW

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Post Information

Title	This is a smart man..
Author	IntrovertedMagma
Upvotes	394
Comments	60
Date	February 27, 2018 7:22 PM UTC (8 years ago)
Subreddit	Posted in /r/MGTOW
Original Link	https://old.reddit.com/r/MGTOW/comments/80p8ke/this_is_a_smart_man/
Archive Link	https://theredarchive.com/r/MGTOW/this-is-a-smart-man.588032 https://theredarchive.com/post/588032

[–]Saturn198179 points80 points81 points 8 years ago (24 children) | Copy Link

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[+][deleted] 8 years ago [recovered] (2 children) | Copy Link

NoMo

is it free?

[–]Saturn19811 point2 points3 points 8 years ago (1 child) | Copy Link

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[–]Saturn19811 point2 points3 points 8 years ago (0 children) | Copy Link

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[+][deleted] 8 years ago [recovered] (17 children) | Copy Link

What does leverage mean?

[–]Fabianstrategy164 points65 points66 points 8 years ago (9 children) | Copy Link

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[–]fmanly5 points6 points7 points 8 years ago (0 children) | Copy Link

Well, even in your example if you get an extended period with no rents or a housing value decline you can end up in trouble (a la 2008).

However, rental properties isn't really his concern. How about taking out a mortgage on 100% of your home's equity and using that to short VIX? Or better yet using all that equity to go long on SPY, and then using your SPY as collatoral to short VIX with leverage. Now when SPY drops 10% your VIX skyrockets at the same time and the shorts get called and all your SPY is liquidated at a huge loss and now you have a big mortgage payment with nothing really to show for it.

I know somebody who lost their home after some kind of investment went bad.

People get greedy. When they're doing it with money they can afford to lose, then the worst that can happen is that they lose it. When they're doing it with money they can't afford to lose then things can go really wrong.

Some people invest in stuff based on nothing other than "the guy down the street made lots of money this way" with no understanding of the risks. Their motivation is fear of missing out. That's how you lose money.

Unfortunately the reliable ways of investing will reliably give you average returns of maybe 6-7% above inflation or so. People want to put $10k in and be a millionare in a year, and it just doesn't work that way unless you get lucky. But, if you want to base your strategy on luck then just go buy a powerball ticket.

[–]Zombocom19115 points6 points7 points 8 years ago (0 children) | Copy Link

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[–]certainlyheisenberg12 points3 points4 points 8 years ago (0 children) | Copy Link

[–]1UPZ_1 point2 points3 points 8 years ago (0 children) | Copy Link

Its a risk.

People, especially investors have convinced themselves that using equity or borrowing against your home to buy other properties is a SURE thing. If its a SURE thing, all billionaires in the world would just own all the houses and properties around the cities.

Its a RISK and GAMBLING... just like shares in a company. Except that with properties there's the BANK who is willing to lend someone hundreds of thousands of dollars, some close to a million, to buy a house. Shares, banks will NOT lend you borrow no way near that amount, without them holding onto secure from the borrower (house lol).

Houses/Properties prices depend HIGHLY on economic conditions and the amount the banks will lend. Then you see house flippers who are pretty much banking on appealing to the buyer's impulses to make profits.... its a Ponzi scheme if you really look at it.

Property prices are also very dependent on speculation... just like shares.

Best advice I've heard is work hard and pay off your primary house ASAP. Then once you've owned a house, the money you earn minus your expenses... you can invest. But because of banks and investors , people are using various methods like equity, negative gearing (tax benefits from rental properties) etc. and hoping houses go up in price enough so they make a big profit in the future.... until the ceiling is reached (the mortgage repayments so high that even high salaried people struggle to afford it)

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[+][deleted] 8 years ago [recovered] (1 child) | Copy Link

Ah, the Blue Pill Triangle

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