TheBigShort
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I cant see any difference other than one is a boy, the other a girl.
What’s your Crypto Exit/Investment strategy?
- Thread starter landlord
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I cant see any difference other than one is a boy, the other a girl.
Brendan,
As I tried to point out above, though I think the point has been lost. The bank will not loan you money to invest in shares.
The difference between Joe and Mary is this.
Last week Joe had €100k cask and €200k shares. He used his cash to buy shares.
Last week Mary had €200k mortgage and €200k shares. She remortgaged to buy another €100k shares.
The Joe situation is possible but no bank would allow Mary to remortgage like that.
As I tried to point out above, though I think the point has been lost. The bank will not loan you money to invest in shares.
The difference between Joe and Mary is this.
Last week Joe had €100k cask and €200k shares. He used his cash to buy shares.
Last week Mary had €200k mortgage and €200k shares. She remortgaged to buy another €100k shares.
The Joe situation is possible but no bank would allow Mary to remortgage like that.
Brendan Burgess
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Thanks Shortie
Yesterday Joe had a house worth €500k and a mortgage of €300k and no shares.
Yesterday Mary had a house worth €500k with no mortgage and no shares.
Today, Joe inherited €300k worth of shares from his father.
Today Mary remortgaged her home for €300k to buy shares.
Are you still happy with this comment?
Brendan
Yesterday Joe had a house worth €500k and a mortgage of €300k and no shares.
Yesterday Mary had a house worth €500k with no mortgage and no shares.
Today, Joe inherited €300k worth of shares from his father.
Today Mary remortgaged her home for €300k to buy shares.
Are you still happy with this comment?
Brendan
TheBigShort
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Thanks Brendan, there is a bit more detail here. I think that the previous post there was a typo?
Regardless of re-mortgaging to invest shares not being allowed, your initial balance with €200k bitcoin failed to emphasis that any of the €400k in borrowings were for bitcoin.
So to put this to bed, if I have an existing mortgage, and I borrow to buy bitcoin (or any other thing, like a yacht for example, or a Ferrari) I am effectively re-mortgaging my home.
But if I have an existing mortgage and earn additional income and subsequently buy, invest, gamble in anything I want, bitcoin, gold, art, antiques etc...I am not re-mortgaging my home.
Read the posts again BS - Brendan played a little trick on you.
Joe and Mary are in precisely the same financial position - you acknowledged that yourself!
The only difference is that you were subsequently told that Mary remortgaged her home to purchase the shares whereas Joe already had a mortgage outstanding in the same amount.
But there is no difference in their financial position, which was the original point that you disputed.
I would say the only reason ever to use money to invest instead of paying off existing debt (mortgage or otherwise) is that you expect the return on investment to be greater than the cost of the debt. Usually you can estimate the cost of the debt more accurately than the return on the investment so investing is the riskier option.
Probably the only other consideration is that investing versus paying off debt may mean you have more options in terms getting quick cash in hand should you need it depending on how liquid the investment is versus the difficulty of taking out further debt at your original rate.
EDIT: Personally, I am debt-averse and never intend on taking a loan. Is there some less-dramatic way to phrase "debt is slavery"?
Probably the only other consideration is that investing versus paying off debt may mean you have more options in terms getting quick cash in hand should you need it depending on how liquid the investment is versus the difficulty of taking out further debt at your original rate.
EDIT: Personally, I am debt-averse and never intend on taking a loan. Is there some less-dramatic way to phrase "debt is slavery"?
TheBigShort
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Read the posts again BS - Brendan played a little trick on you.
Oh please, this is getting absurd. Yes, their financial positions are now the same. But by no stretch of the imagination could you class Joe's €300k inheritance in shares as 're-mortgaging his home'.
TheBigShort
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Could you not bring yourself to say the same for Joe?
Nobody suggested that Joe remortgaged his home.
The point that we have been making - and you have been disputing - is that investing while carrying mortgage debt is no different financially to remortgaging a property to make those investments.
Surely you can see that now?
TheBigShort
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But Joe didnt invest - he inherited. He didnt even borrow to invest!
Yesterday, Joe had a net worth of €200k. Today he has €500k!!
Yesterday Mary had a net worth of €500k, today, no dfference.
Joe's net worth increased by €300k. Marys didnt change at all!!
So you are now arguing that if you continue to hold a portfolio of shares that you inherited you are not invested in that share portfolio. Really?!
You (unwittingly) agreed that Joe and Mary were in precisely the same financial position even though Joe already had a mortgage whereas Mary remortgaged her home.
That's the simple point you were disputing and I'm surprised you can't acknowledge that you were wrong. Oh, well.
TheBigShort
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BS - please look back at the exchanges from the second page of this thread onwards.
There is no difference (material or otherwise) in the respective financial positions of Joe and Mary in Brendan's example - you said so yourself in so many words.
Mary remortgaged her property to make her investments. Meanwhile, Joe already had a mortgage but chose to retain his inherited investments rather than paying off his mortgage. The net result is the same.
TheBigShort
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No, not at all. Im saying that by being invested in a portfolio of shares that you inherited, does not constitute in any way shape or form, a re-mortgaging of your home.
If you believe it does, why dont you just say it out straight.
TheBigShort
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Yes I did. Because those were the facts as presented. So what?
How would holding a portfolio of shares "constitute a re-mortgaging of my home"? Frankly, I don't know what that even means.
Again, the simple point that we have been making is that investing while carrying mortgage debt is no different financially to remortgaging a property to make those investments.
I suspect that you can see that now but are reluctant to acknowledge your mistake. That's obviously fine.
Better luck squeezing water!!!!
TheBigShort
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I dont know how could it? This is what I said
"
So, using the example provided;
with no additional net benefit or loss.
Joe is a net beneficiary to the tune of €300k in inherited shares. If you believe he has effectively re-mortgaged his property just say it out straight.
Sorry BS but I don't understand how holding a portfolio of shares could (or could not) "constitute a re-mortgaging of [my] home". The phrase is meaningless.
Again BS, nobody suggested that Joe re-mortgaged his property (this is really starting to get very repetitive).
Mary re-mortgaged her property to buy a portfolio of shares. Joe, on the other hand, already had a mortgage and retained his inherited shares rather than paying off his mortgage.
Joe and Mary are in precisely the same position because there is no financial difference between investing while carrying mortgage debt and re-mortgaging a property to make those investments.
Or to put it another way, they are effectively the same thing from a financial perspective.
I'm afraid I can't offer you any further assistance if you genuinely can't grasp the concept.
Again BS, nobody suggested that Joe re-mortgaged his property (this is really starting to get very repetitive).
Mary re-mortgaged her property to buy a portfolio of shares. Joe, on the other hand, already had a mortgage and retained his inherited shares rather than paying off his mortgage.
Joe and Mary are in precisely the same position because there is no financial difference between investing while carrying mortgage debt and re-mortgaging a property to make those investments.
Or to put it another way, they are effectively the same thing from a financial perspective.
I'm afraid I can't offer you any further assistance if you genuinely can't grasp the concept.
Brendan Burgess
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Sarenco - tag
This issue started with:
Then I asked
When he confirmed that it was, I asked
To which I got the reply:
Sarenco and I have pointed out that he is in the same position. Remortgaging your home to buy €200k of Bitcoin puts you in the same position as someone who has €200k of Bitcoin and a mortgage.
So landlord won't remortgage his home to buy Bitcoin, but if he is in the same result, he won't unmortgage his home, if it means selling Bitcoin.
This is a very common error and not at all an attack on Bitcoin.
This issue started with:
Then I asked
When he confirmed that it was, I asked
To which I got the reply:
Sarenco and I have pointed out that he is in the same position. Remortgaging your home to buy €200k of Bitcoin puts you in the same position as someone who has €200k of Bitcoin and a mortgage.
So landlord won't remortgage his home to buy Bitcoin, but if he is in the same result, he won't unmortgage his home, if it means selling Bitcoin.
This is a very common error and not at all an attack on Bitcoin.