Thoughts on dave ramsey saying dont use equity? Pay off all debt

Thanks Paul.

The best recent book on this stuff is actually a book about Bitcoin.

"The Bitcoin Standard" came out in 2018. The first 3/4 of the book is just about free markets and money. Just finished it a month ago - superb. I found the Bitcoin section less interesting actually.

Perhaps check out "Guide to investing in gold and silver" by Mike Maloney - mostly monetary history.

Then there are the classics:

"The Road to Serfdom" - FA Hayek; and
"The Fatal Conceit" - by FA Hayek also.
"Economics in One Lesson - Henry Hazlitt

Years of fun right there.

 

That's not what old Jo doing. He is creating the debt of the history and not planning to pay it off in the coming 100 years. Who's the President? Not Dave Ramsey...?

 

Yes! He might not be right all the time, but he is right OVER time, and that's important!!

 

pure capitalism also assume a level playing field, which has never been the case.

 

Well, there is inequality under all systems. But at least the inequality created by free markets is based on merit and competence. Inequality created under socialism is based on political connections and access to the arms of coercion. The key is not whether there are poor people, the real question is:

1) Is there mobility - if i work hard, can I change my conditions (there is under capitalism, there is not under socialism);
2) how poor are your poor people. Poor people in capitalist countries are relatively well off because goods and services are abundant.

Don't know why people hang their hat on the inequality argument, when there is more inequality in socialist countries.

 

Can you tell me why we want as much debt as possible? Is that so we can get as many properties as possible while intrest rates are low then in the future assuming everything goes up in vaule sell a few and pay off the rest and have passive income or ?

 

High inflation and low interest rates mean that there's a very good chance that capital appreciation will outpace interest payment significantly.
If you're worried any interest rate rises (I don't think they will be coming hard and fast, but that's just my opinion), fix for 5 years, which is still pretty affordable. At the end of the 5 years, if interest rates are sky high, you can always sell up, as that would likely mean that your assets would have grown significantly in the interim.

Is it a bit of a gamble? Of course it is, so is all investing, but I think it's much riskier not to invest.

 

I think there would be a lot more control as you wouldnt be vulnerable to rate changes. Would be an extremely slow process, especially at the start but I think it would snowball as all your IP's would be cashflowing nicely. The 1st might take 7 yrs to save for, the 2nd 6yrs, the 3rd 4 yrs... Until eventually they yield enough to buy a property every 6 months. You may also get discounts for paying cash along the way, no need to wait on finance or anything.

 

That was what i was planning to do. I ofsetted my first one fully. I just saved up 60k for a second one and i was planning on offsetting that one fully then getting a 3rd. But i think thers smarter faster ways of doing it

 

So the idea is once intrest rates are too high and the property is eating into yoir pockets too much sell it as by that time it shoulda went up in enough vaule to make you nice profits ? ( i know no garentees)
Whats the current intrests rates i dont even know

 

Never heard of it done like that. Just thinking out loud here, wouldn't maintaining a fully offset loan actually be slower than just paying them off? If paid off you would then have extra cash flow from what used to be the repayments and can get to the next deposit quicker? But I understand there can be other benefits to having extra cash on hand

 

Well its exactly the same. Its asif its paid off I get the same cashflow. I wanted it like that as i wasent 100% sure if i would use the cash for other properties which im considering now

 

Agree, The Money Guys with their 'FOO' give some quality direction and thoughts. If you refine the USA slant and put it in our context it would not be a bad place to start. The White Coat Investor is quality if you take it in the same way. He is very switched on and, over time, appears to be less prescriptive.

Pay Off Debt or Invest? | White Coat Investor

If I could only listen to 1 financial podcast it would be The Money Guys every single time. I like the way they view investing and they communicate in a refreshing way.

All the best

 

A forum that aims to make long term returns above the cost of debt is probably not the best place to ask whether debt is bad.

 

No strategy works for everyone.
If youve stayed out of the sydney market over the last decade because you think all debt is bad……

On the other hand if you have cards and car and other bad debt (and in the us, student loans are massive), then it might be good to pay those off first. But that just gets you back to the starting line.

 

OPM (other people's money, aka debt) is the key to creating wealth if used wisely.

OPM is kind of oxymoronic seeing as banks seem to create money on balance sheets that otherwise didn't exist, this is the game we all play and sometimes feels like a house of cards held together with super glue.

 

Leverage
1. OPM (other people's money)
2. OPK (other people's knowledge)
3. OPS (other people's skills)

 

Hey i didn't say it was bad , just wanted opinions