"I don't borrow money to invest" Dave Ramsey

[winb83]

Basically Dave ask the guy would you take out a mortgage on a paid off home to invest the borrowed money. He easily says no but would consider taking the money he currently has that could pay off his mortgage to invest it while keeping the mortgage.

I see people all the time talk about taking out car loans and investing the money they would have bought the car with. Aren't investments supposed to be from disposable income? That's how I always saw it. You take money you can afford to lose and invest it rather than using loans to live outside your means and enable you to invest money that really would have been spend elsewhere.

 

[David_TheMan]

Investment is and should be from diposible income. Too many idiots think borrowing money and renting cars are shortcuts

 

[NZA]

anybody investing with loans is insane. you are not too big to fail.

 

[Panther]

im not the biggest proponent of dave ramsey but in any situation where i can be without debt im gonna take that option

 

[Amused Mastery]

As a general rule, it's good to only invest with disposable income. There are dudes like Kiyosaki that will talk about borrowing money from the bank to buy rental properties, but that's a special case.

 

[⠀X ⠀]

If it's for real estate, then you should definitely borrow money to invest. I'm sure that most successful real estate investors have used debt to build their wealth.

 

[x-factor7]

Dave's absolutely right here. Of course the caller's financial planner wants him to invest that money since he will get a percentage. If the guy has cash left over after he pays off his mortgage, then he can go invest.

I like Dave but don't listen to his investment advice, his advice about investing itself is good, but not what funds he wants you to pick.

 

[CurrencyChase]

Investing with a loan is okay if it's not a high amount. Made so much money using loans when opportunities presents itself..

 

[KING WILL]

IMO, the thing about only investing disposable income is that the avg person doesn't have a lot of DI to REALLY make investing worthwhile.

If you wanted to start a business and had a really good business plan, but not the funds, you would borrow money right?

IMO there isn't much of a difference between that, and borrowing money to invest into a business thats already established and up and running.

 

[Sunalmighty]

the only thing I would take out a loan for is real estate business moves

 

[MJ Truth]

IMO, the thing about only investing disposable income is that the avg person doesn't have a lot of DI to REALLY make investing worthwhile.

If you wanted to start a business and had a really good business plan, but not the funds, you would borrow money right?

IMO there isn't much of a difference between that, and borrowing money to invest into a business thats already established and up and running.

Only a fool borrows money to start a business though. You’re better off just building it from the ground up.

 

[Oldschooler]

I would only invest through borrowing on real estate located in strategic locations.