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Credit Cards (in the US)
hyiu:
if that is your finance rule...
then you should go margin, and bet on the triple leverage ETF..... lol....
or better yet... for biggest leverage, just trade futures...
you pretty much go rich instantly....
(or go broke....)
yeah... picking a particular time isn't exactly the theory I talked about...
for the normal investor... its more like you invest constantly...
so, every month, you save up like $100 and buy a certain shares of index fund...
if you did that for the past 10 yrs... you're not really moving ahead 5-7% annually...
for most people, paying off mortgage give them a constant and certain 3% gain...
while if they decide to invest... MOST PEOPLE (me included) can and will do much worse...
I'm not saying don't invest, or definitely pay off your mortgage...
(its different for each person... their risk tolerance, preference, and knowledge on the subjects...
but for most people, they don't know head of tails on the market...
its really better off for them to pay off mortgage first...
and its not like Donkbaca said, leverage up and invest in index fund and you get 5-7% annual return...
Donkbaca:
Yeah, that is what you should do, borrow to the hilt, invest in things that are more risky then the rate you are borrowing money at. But you shouldn't borrow it all and bet on black :) Just because you are borrowing does not mean you are being reckless.
The average return on large cap stocks, accounting for appreciation and dividends from 1926 through 2008 is 11.7%
Paying off your mortgage is NOT a 3% gain though, unless you plan on living there for 30 years. I sure as heck wouldn't want to pay off my house NOW, why sink extra money into an asset that is depreciating at worst and stagnating at best?
Credit card debt, on the other hand is horrible, UNLESS you do some serious gymnastics whereby you take advantage of balance transfers to get your rate down crazy low and have points/cash back.
Vigo:
??? WTH? What's this thread doing on topic again? ;D
danny_galaga:
--- Quote from: HarumaN on March 22, 2011, 03:05:42 pm ---
--- Quote from: Samstag on March 22, 2011, 03:03:25 pm ---
--- Quote from: Donkbaca on March 22, 2011, 02:52:03 pm ---You guys are forgetting about dividends...
--- End quote ---
Are they a factor? I don't have any investments that pay dividends in any significant amount.
--- End quote ---
They can be... I have some stock that pay dividends that I just reinvest right back into the stock.
--- End quote ---
Same.
Fordman:
For those that want to keep paying someone else to carry your debt, go right ahead and do it. When my home is paid off (im not wealthy-$60,000 a year job) and the money I bring home goes into my savings account, I then become a winner with my money.
I havent used credit cards in 5 years. I do have a debit card with Mastercard logo on it, but the money comes right out of my bank account.
When you have a debt to someone else, in a sense, you have become "a slave to the lender". Im tired of working for someone else, Im working for me and my family!
Fordman
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