Why your financial planner wants you in debt

[lonestar2000]

There is an excellent article on Money.Cnn.Com on financial planning by The Mole (a financial planner).

There are several good ones in a series so I’ll just link them all:

Why your planner wants you in debt –
http://money.cnn.com/2007/08/14/pf/mole_planner_may2007.moneymag/index.htm?postversion=2007081417

Homebuying: Lies planners will tell you –
http://money.cnn.com/2007/10/10/pf/ask_the_mole.moneymag/index.htm?postversion=2007101009

Also an excellent article (not by the Mole) retirement planning and general financial management:
http://money.cnn.com/galleries/2007/moneymag/0710/gallery.retirement_myths.moneymag/index.html

[JWM in SD]

“In buying the condo, you could open a home equity line of credit (HELOC). For example, you could buy a $100,000 condo and get a tax-deductible line of credit for, let’s say, $50,000. It usually costs nothing to open and it is there for just such an emergency. It’s likely to be at a variable rate but the odds are you won’t need it and, in the meantime, you are saving a ton of money by not making that mortgage payment.”

$50K on a $100K condo???? Uh, yeah okay sure. Sorry, but this guy’s advice is as clear as mud. To me it’s simple, if you are in SoCal and you meet with a planner and they advise you to leverage into real estate right now or forseeable future…savings or not…they failed the litmus test already.

[JWM in SD]

“In buying the condo, you could open a home equity line of credit (HELOC). For example, you could buy a $100,000 condo and get a tax-deductible line of credit for, let’s say, $50,000. It usually costs nothing to open and it is there for just such an emergency. It’s likely to be at a variable rate but the odds are you won’t need it and, in the meantime, you are saving a ton of money by not making that mortgage payment.”

$50K on a $100K condo???? Uh, yeah okay sure. Sorry, but this guy’s advice is as clear as mud. To me it’s simple, if you are in SoCal and you meet with a planner and they advise you to leverage into real estate right now or forseeable future…savings or not…they failed the litmus test already.

[nostradamus]

nevermind

[nostradamus]

nevermind

[Author]

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