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Started By
Message
Refi and Equity out to Invest
Posted on 3/6/12 at 9:18 am
Posted on 3/6/12 at 9:18 am
With rates so low wanted opinions before making the pitch to the Mrs. If I can get 100K out (equity), is it worth it to take that 100K and invest it. I average about 20-30% return on buying stocks, so with numbers like that I can double my 100K in about 4-5 years. Just seems a little risky borrowing against the house, but then again gotta take a few risks to get ahead! Thanks in advance!
8
Posted on 3/6/12 at 9:24 am to spicycajun
quote:
average about 20-30% return on buying stocks, so with numbers like that I can double my 100K in about 4-5 years
With numbers like that you should quit your job and just become a fund manager.
In all seriousness though, the amount of uncertainty in the market right now (Greece/Europe in general, gas prices, elections, unemployment, etc) should dissuade you from taking equity out of your house in order to "flip it" and double in 4-5 years.
You need to ask yourself what is the worst case scenario? Can you stomach a 20-30% loss instead? I'd imagine not since you're taking the equity out of your home. If you'd like to play the stock market, make sure it's with money that you are ok with risking...nothing is guaranteed.
Posted on 3/6/12 at 9:26 am to spicycajun
quote:
is it worth it to take that 100K and invest it.
If you can at least get about 5%... might be worth your while.
Posted on 3/6/12 at 9:45 am to spicycajun
quote:
Just seems a little risky borrowing against the house, but then again gotta take a few risks to get ahead! Thanks in advance!
I don't see this ending well for you or your marriage.
Posted on 3/6/12 at 9:54 am to spicycajun
quote:
I average about 20-30% return on buying stocks
Can I give you 100k for you to invest?
Posted on 3/6/12 at 11:08 am to CidCock
CC...what kind of rate would you like to see on that 100K, might can work something out with you! I have a simple system of limits/stops on all my stock transactions, run close to 30 trades a month, nice yearly returns!
Posted on 3/6/12 at 11:42 am to spicycajun
I hate to always be the bad guy, but this will not end well.
Posted on 3/6/12 at 12:06 pm to TheHiddenFlask
You get a 30% return on your equity investments? Nice to meet you, Warren.
Posted on 3/6/12 at 12:32 pm to spicycajun
Definitely borrow against the house. 30% returns are pretty good and should continue at that rate for you, judging by your average return. What do you have to lose? If I had one thing to add it would be to try for 40% returns.
Posted on 3/6/12 at 12:51 pm to spicycajun
quote:
With rates so low wanted opinions before making the pitch to the Mrs. If I can get 100K out (equity), is it worth it to take that 100K and invest it.
do you realize that investors are willing to loan you money for your "rates so low" mortgage for a reason?
Posted on 3/6/12 at 12:55 pm to spicycajun
Actually,with numbers like that (25% average yearly return) you should double your money in just over 3 years. Math FTW.
This post was edited on 3/6/12 at 12:57 pm
Posted on 3/6/12 at 1:19 pm to TortiousTiger
Absolutely realize why the rates are so low, but if you know where to put your investments to work for you, you can hedge off the gloom and doom everyone is always preaching. Didn't post the question to be a typical smart a** that you see on TD, not bragging about my yearly numbers year in a year out, just wanted a litte input, seems there are a few around here with a good head on their shoulders.
Sorry 5 years was more of the point where I would have enough to pay off the loan, unless I choose to have cash in hand to keep the ball rolling.
Sorry 5 years was more of the point where I would have enough to pay off the loan, unless I choose to have cash in hand to keep the ball rolling.
This post was edited on 3/6/12 at 1:21 pm
Posted on 3/6/12 at 1:37 pm to spicycajun
FWIW, your stop loss/limit system was invented almost 100 years ago. I don't think it has ever been shown to improve returns over the long run.
I think you are fooling yourself into believing that you are beating the market when you are actually just trading aggressive holdings in a bull market and getting noise from a small data set.
However, I would have probably told that to a lot of the great investors when they were starting out.
I think you are fooling yourself into believing that you are beating the market when you are actually just trading aggressive holdings in a bull market and getting noise from a small data set.
However, I would have probably told that to a lot of the great investors when they were starting out.
Posted on 3/6/12 at 1:49 pm to TheHiddenFlask
$100K in the TIAA-CREF savings account linked here yesterday would yield $1,250/month.
$1,250x12=$15,000/year
Now, stop & figure out the deductibility of the interest he'd pay on that $100K he took out, & if he could return 1.25% per month in a freaking savings account & let it compound, it would only be a few years-without investing a single dime-that he would have the $100K generating $55-60K that he could then go and play with.
Seems like it could make sense if you had that much equity in the current climate for someone who had the fiscal discipline to put $100K from their house to sleep in a simple share savings account for 48 months...and then go immediately & pay his house back down.
Not many-if anyone-have that discipline.
$1,250x12=$15,000/year
Now, stop & figure out the deductibility of the interest he'd pay on that $100K he took out, & if he could return 1.25% per month in a freaking savings account & let it compound, it would only be a few years-without investing a single dime-that he would have the $100K generating $55-60K that he could then go and play with.
Seems like it could make sense if you had that much equity in the current climate for someone who had the fiscal discipline to put $100K from their house to sleep in a simple share savings account for 48 months...and then go immediately & pay his house back down.
Not many-if anyone-have that discipline.
This post was edited on 3/6/12 at 1:50 pm
Posted on 3/6/12 at 2:10 pm to GFunk
quote:
$100K in the TIAA-CREF savings account linked here yesterday would yield $1,250/month.
...really? 1.25% a month? I must have missed this link. You're basically saying that this savings account is returning 15% per year? I might be totally off base, but i'd be willing to bet that the savings account you're referencing is actually yielding 1.25% per year.
Posted on 3/6/12 at 2:14 pm to TheHiddenFlask
Sorry Flask, but not making much in bull markets, made nice returns last Aug/Sept in a bear market, I never chase stocks on the high side. Thanks for the input
Posted on 3/6/12 at 2:17 pm to spicycajun
Stanford?
Posted on 3/6/12 at 2:22 pm to GregYoureMyBoyBlue
quote:
GregYoureMyBoyBlue
quote:
...really? 1.25% a month? I must have missed this link. You're basically saying that this savings account is returning 15% per year? I might be totally off base, but i'd be willing to bet that the savings account you're referencing is actually yielding 1.25% per year.
Look in the other thread I started about depositing some cash we have. They linked a fat-wallet thread that links to the discussion.
Its 1.25%, legit...
Posted on 3/6/12 at 2:41 pm to GregYoureMyBoyBlue
quote:
...really? 1.25% a month? I must have missed this link. You're basically saying that this savings account is returning 15% per year? I might be totally off base, but i'd be willing to bet that the savings account you're referencing is actually yielding 1.25% per year.
it's 1.25 APY
LINK
Posted on 3/6/12 at 2:48 pm to TheHiddenFlask
Not to thread jack but Flask did you see the article yesterday on the Poli board about family who quit paying their mortgage in their 1.5 mil house 5 years ago......and they still havent been foreclosed on?
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