[Raybyrnes]

There have been a number of area where people have made bank. In San Diego Many ot the qualcomm execs made bank in the early part of the decade. IF you were into selling Cell phones. that blew up in 2000, I now some car sales people who were making 250K giving away ford F-150’s with 0 per cent financing, Student Loan companies made a fortune around 2004, Subprime Loan providers were going strong up until 2006, credit card companies have been going strong over that same period. So I would argue there have bena number of ways you could have been making money.

[Raybyrnes]

There have been a number of area where people have made bank. In San Diego Many ot the qualcomm execs made bank in the early part of the decade. IF you were into selling Cell phones. that blew up in 2000, I now some car sales people who were making 250K giving away ford F-150’s with 0 per cent financing, Student Loan companies made a fortune around 2004, Subprime Loan providers were going strong up until 2006, credit card companies have been going strong over that same period. So I would argue there have bena number of ways you could have been making money.

[Raybyrnes]

There have been a number of area where people have made bank. In San Diego Many ot the qualcomm execs made bank in the early part of the decade. IF you were into selling Cell phones. that blew up in 2000, I now some car sales people who were making 250K giving away ford F-150’s with 0 per cent financing, Student Loan companies made a fortune around 2004, Subprime Loan providers were going strong up until 2006, credit card companies have been going strong over that same period. So I would argue there have bena number of ways you could have been making money.

[Raybyrnes]

There have been a number of area where people have made bank. In San Diego Many ot the qualcomm execs made bank in the early part of the decade. IF you were into selling Cell phones. that blew up in 2000, I now some car sales people who were making 250K giving away ford F-150’s with 0 per cent financing, Student Loan companies made a fortune around 2004, Subprime Loan providers were going strong up until 2006, credit card companies have been going strong over that same period. So I would argue there have bena number of ways you could have been making money.

[Raybyrnes]

There have been a number of area where people have made bank. In San Diego Many ot the qualcomm execs made bank in the early part of the decade. IF you were into selling Cell phones. that blew up in 2000, I now some car sales people who were making 250K giving away ford F-150’s with 0 per cent financing, Student Loan companies made a fortune around 2004, Subprime Loan providers were going strong up until 2006, credit card companies have been going strong over that same period. So I would argue there have bena number of ways you could have been making money.

[Raybyrnes]

SD Realtor

Part of my thought process is the fact that you ca walk away but the real risk reduction I see is the fact that you currently know what the interest rate environment is. How do you know what the cost of money is going to be in 3, 5 or 10 years.

I know for a fact that if they go lower I can refinance form the 5 or 6 % I can get today. I also know that I can prepay down the mortgage. But if I park a big chunk of cash as a down payment and the interest rate environment were to shift at a period of time that I need to borrow then I would be pissed that I had not purchaed my money when it was cheap. By buying things at discounts we do a better job of reducing our exposure to risk.

My timeline for planning is further out than the normal person. And I will admit that I oten times get the urge to just pay all of my bills off and be debt free. But every time I log in to do it I am reminded that every thousand of debt I pay off costs me roughly 40 to 50 dollars in pretax risk free return. So I can fully relate to those who like the thought of being debt free. Unfortunately jsut as it would aggravate me to come to my car and see a ticket on the windshield , it would equally bother me to pay off debts that are allowing me to earn risk free money.

[Raybyrnes]

SD Realtor

Part of my thought process is the fact that you ca walk away but the real risk reduction I see is the fact that you currently know what the interest rate environment is. How do you know what the cost of money is going to be in 3, 5 or 10 years.

I know for a fact that if they go lower I can refinance form the 5 or 6 % I can get today. I also know that I can prepay down the mortgage. But if I park a big chunk of cash as a down payment and the interest rate environment were to shift at a period of time that I need to borrow then I would be pissed that I had not purchaed my money when it was cheap. By buying things at discounts we do a better job of reducing our exposure to risk.

My timeline for planning is further out than the normal person. And I will admit that I oten times get the urge to just pay all of my bills off and be debt free. But every time I log in to do it I am reminded that every thousand of debt I pay off costs me roughly 40 to 50 dollars in pretax risk free return. So I can fully relate to those who like the thought of being debt free. Unfortunately jsut as it would aggravate me to come to my car and see a ticket on the windshield , it would equally bother me to pay off debts that are allowing me to earn risk free money.

[Raybyrnes]

SD Realtor

Part of my thought process is the fact that you ca walk away but the real risk reduction I see is the fact that you currently know what the interest rate environment is. How do you know what the cost of money is going to be in 3, 5 or 10 years.

I know for a fact that if they go lower I can refinance form the 5 or 6 % I can get today. I also know that I can prepay down the mortgage. But if I park a big chunk of cash as a down payment and the interest rate environment were to shift at a period of time that I need to borrow then I would be pissed that I had not purchaed my money when it was cheap. By buying things at discounts we do a better job of reducing our exposure to risk.

My timeline for planning is further out than the normal person. And I will admit that I oten times get the urge to just pay all of my bills off and be debt free. But every time I log in to do it I am reminded that every thousand of debt I pay off costs me roughly 40 to 50 dollars in pretax risk free return. So I can fully relate to those who like the thought of being debt free. Unfortunately jsut as it would aggravate me to come to my car and see a ticket on the windshield , it would equally bother me to pay off debts that are allowing me to earn risk free money.

[Raybyrnes]

SD Realtor

Part of my thought process is the fact that you ca walk away but the real risk reduction I see is the fact that you currently know what the interest rate environment is. How do you know what the cost of money is going to be in 3, 5 or 10 years.

I know for a fact that if they go lower I can refinance form the 5 or 6 % I can get today. I also know that I can prepay down the mortgage. But if I park a big chunk of cash as a down payment and the interest rate environment were to shift at a period of time that I need to borrow then I would be pissed that I had not purchaed my money when it was cheap. By buying things at discounts we do a better job of reducing our exposure to risk.

My timeline for planning is further out than the normal person. And I will admit that I oten times get the urge to just pay all of my bills off and be debt free. But every time I log in to do it I am reminded that every thousand of debt I pay off costs me roughly 40 to 50 dollars in pretax risk free return. So I can fully relate to those who like the thought of being debt free. Unfortunately jsut as it would aggravate me to come to my car and see a ticket on the windshield , it would equally bother me to pay off debts that are allowing me to earn risk free money.

[Raybyrnes]

SD Realtor

Part of my thought process is the fact that you ca walk away but the real risk reduction I see is the fact that you currently know what the interest rate environment is. How do you know what the cost of money is going to be in 3, 5 or 10 years.

I know for a fact that if they go lower I can refinance form the 5 or 6 % I can get today. I also know that I can prepay down the mortgage. But if I park a big chunk of cash as a down payment and the interest rate environment were to shift at a period of time that I need to borrow then I would be pissed that I had not purchaed my money when it was cheap. By buying things at discounts we do a better job of reducing our exposure to risk.

My timeline for planning is further out than the normal person. And I will admit that I oten times get the urge to just pay all of my bills off and be debt free. But every time I log in to do it I am reminded that every thousand of debt I pay off costs me roughly 40 to 50 dollars in pretax risk free return. So I can fully relate to those who like the thought of being debt free. Unfortunately jsut as it would aggravate me to come to my car and see a ticket on the windshield , it would equally bother me to pay off debts that are allowing me to earn risk free money.

[Raybyrnes]

kewp

I would rather speak to debt as opposed to leverage. Shift risk around. For instance. My parents own their home and are not going to move out or rent. Therefore they can shift the risk of a depreciating investment to the bank by borrowing against it. Let’s say their place is worth 500K. By borrowing against the home they take on a partner (the bank) and simply pay the expense (5 to 6%)in terms of interest. They have effective shifted teh risk of a real estate collapse to the bank.

Now they need to be able to do something with that capital. That is the other side of the equasion.

[Raybyrnes]

kewp

I would rather speak to debt as opposed to leverage. Shift risk around. For instance. My parents own their home and are not going to move out or rent. Therefore they can shift the risk of a depreciating investment to the bank by borrowing against it. Let’s say their place is worth 500K. By borrowing against the home they take on a partner (the bank) and simply pay the expense (5 to 6%)in terms of interest. They have effective shifted teh risk of a real estate collapse to the bank.

Now they need to be able to do something with that capital. That is the other side of the equasion.

[Raybyrnes]

kewp

I would rather speak to debt as opposed to leverage. Shift risk around. For instance. My parents own their home and are not going to move out or rent. Therefore they can shift the risk of a depreciating investment to the bank by borrowing against it. Let’s say their place is worth 500K. By borrowing against the home they take on a partner (the bank) and simply pay the expense (5 to 6%)in terms of interest. They have effective shifted teh risk of a real estate collapse to the bank.

Now they need to be able to do something with that capital. That is the other side of the equasion.

[Raybyrnes]

kewp

I would rather speak to debt as opposed to leverage. Shift risk around. For instance. My parents own their home and are not going to move out or rent. Therefore they can shift the risk of a depreciating investment to the bank by borrowing against it. Let’s say their place is worth 500K. By borrowing against the home they take on a partner (the bank) and simply pay the expense (5 to 6%)in terms of interest. They have effective shifted teh risk of a real estate collapse to the bank.

Now they need to be able to do something with that capital. That is the other side of the equasion.

[Raybyrnes]

kewp

I would rather speak to debt as opposed to leverage. Shift risk around. For instance. My parents own their home and are not going to move out or rent. Therefore they can shift the risk of a depreciating investment to the bank by borrowing against it. Let’s say their place is worth 500K. By borrowing against the home they take on a partner (the bank) and simply pay the expense (5 to 6%)in terms of interest. They have effective shifted teh risk of a real estate collapse to the bank.

Now they need to be able to do something with that capital. That is the other side of the equasion.

[Author]

Posts