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Originally Posted by BrianTheMick2
You wouldn't start a company with little/no cash investment from you and the money coming from other sources? In Buffett's case, he had sufficient numbers of people who believed in him that he didn't have to put his own money in.
No. I wouldn't. I have had a number of opportunities to do so and turned them all down. I did accepted money from people once but I had a lot of skin in the game as well. That worked out well but I would never do it again. I would feel terrible if something happened to other people's money who trusted me. If I lost it I would feel like it was my **** up and probably pay it back. This pretty much defeats the point of using other people's money. The difference between the Buffett fan boy and myself though is that I fully realize this is my own issues and that what I'm engaging in is a sub-optimal course of action.
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Originally Posted by Shoe
Smart people do not over leverage themselves. It doesn't matter if you have above average returns for a few years because one bad year wipes you out completely.
True but a mortgage is not excessive leverage.
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Originally Posted by potleemit
Now, in your reckless world that totally glosses over the challenges and bad luck that many encounter in life and investments, it would be acceptable to have the person who inherited the house take a mortgage against the house and invest the proceeds, putting his family at risk in the process.
What this paragraph tells me is that you are poor and you have near zero investment experience. That is the only way anyone could actually believe this.
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This is clear cut stuff, yet you are blinded by the plug and play method that you use, which makes assumptions that cannot be made in the real world, and conveniently overlooks the real life and financial results that occur when those assumptions inevitably don't pan out.
What plug and play method?
What assumptions that cannot be made in the real world?
For some reason I get the impression that you think investing is taking all your money and picking red or black.
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Anyone who would advise someone who inherited a house to take a loan against it and invest the proceeds, with the stated reasoning being that you can make more on the investments than the cost of the mortgage, is a reckless fool who I am sure has made horrific financial decisions in the past that they never admit to here.
I have no issues admitting that some investments had bad results. I can't really think of any that I'd described as horrific but there are some that didn't work out and I lost money. Anyone who claims otherwise is almost certainly lying. The important thing though is that the successful ventures have made considerably more than the losing ones.
Your posting makes it very clear that you have no experience investing. All your posts are premised on the incorrect assumption that someone who invests can just wake up the next day and have it all gone. That is not a possibility. Short of a zombie apocalypse someone who has a clue will be fine.
Lastly, your paranoid fear of taking care of family by having a residence free and clear ignores the low but real chance of illness / disability. If I walk out the door and a bus hits me because I have some income paying investments I'll still make considerably more income than the average person. I can be in a coma and money is still coming into the household. That wouldn't be true if I tied up capital buying a residence for cash.
All of this discussion is ignoring the question of should you even own. I rent and buying would be a huge financial mistake but trying to explain why renting is better financially is something I'm pretty sure I'd never accomplish.