Wasn’t really luck JWM and to be fair it was not my property. It was my Dad’s. I looked at his house and saw a fully paid off mortgage, a run up in home price and a decelerating growth rate. Therefore the equity was dead money. I also knew that even if I was wrong the loans could be paid back in full with other investments and the monthly payments were a drop in the bucket. Therefore it wasn’t that risky a move. My father was never going to lose his home even if the value of the investment went to zero. Additionally this created a nice deduction. The challenge now is how to unravel the profits without triggering AMT. This is proving to be a challenge.
You are right debt is not an issue in my book provided I can find somthing that provides a better rate of return. This means being mindful of my debt service ratio. 0% credit cards are a pretty good option when you are earning 6 % in a money market accoun. Therefore if you do not accept them you are paying the different in lost opportunity cost. 3% student loans are a good bet whe you can arbitrage this. 5% fixed rate loans on 30 year mortgages where lenders will allow you to make interest only payments and the governemtn provides you with a tax deduction. This requires a little bit more work, a small amount of risk but I would hardly call this being lucky. It sort of seems like shooting a lay up. It is the easyy money. I just think it’s worth taking the time to pick it up. Other people prefere to watch Law and Order.
