You make some good points but you are also assuming that someone that comes into money and has the choice to either pay off their primary or do something else will be wise with those funds/cash.
I’ve seen plenty of people that come into money and aren’t wise with what they do with it. Plenty of people blow extra cash on either bad investments or just spend the money foolishly. So you have to look at it from that angle as well.
Absolutely leverage can and does work out for people but it does people in as well. From my experiences over the past many years investing, I’ve learned that people are quick to tell you about all the great genius stock picks or other investments they have made that made great returns. However, they neglect to tell you about all the bad investments or stocks they have made that have lost a lot of money. (Especially on these message boards).[/quote]
I agree but there is is difference between coming to money as you say and gradual wealth accumulation. Gradual wealth accumulation isn’t always feasible these days if one has a mortgage over property and putting everything towards paying it off early.
And while personally I wouldn’t gamble on one stock , I wouldn’t want to tie everything into a non income house either if I could do something else with it.
And the way it is…no risk no reward..taking calculated risk is different from being reckless. Though I would say most people whom you are referrinf to either had poor money management skills ( they couldn’t handle an unexpected windfall ) or took on way too much risk beyond what they can handle.
It is also funny how your primary is often considered an asset when it more or less behaves as a liability. You have to make monthly for a god awful long time and even if you make extra payments you still need to make regular monthly payments. And yet when it comes to things like for example financial aid, some places love to count how much equity you have even though you really can’t touch it (unless you want to cash out refi to pay for tuition).
