Quote:
Originally Posted by will76
Who ever told you real-estate never goes down is an idiot. Over "time" real-estate will go up, but from year to year or for a stretch of years it can go down.
Stocks average 10% a year. Over historical time (not 10 years) they have averaged around that. Go look at what the stocks did in the 90s. Last year they did a lot better than 10%. If you take a total of the last 20 years you still doing good. If you started in 2000 then you probably not doing well, but in another 10 years you might be back up over 10%.
Are you Warren Buffet or Soros? If not then you might as well go to the casino and gamble if you want to try to time the market. You will lose a lot more often then you win.
Personal debt is bad. Business debt in a lot of cases can be good. It comes down to making money with the bank's money. If you can borrow money at 6% and invest in something that gives you a 10% return then debt is real good. If you run up your credit cards on consumer crap, that is bad.
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Real estate can be a bad investment in the long run. It needs to be timed to make sense. I just bought a house on the same block my folks sold a house in 1990. They sold for 90k and I bought this one for 75k. 19 years later! Location is very important and in the long run location can work both ways with very little control on your part.
In that historical 10% is a 5% dividend. Stocks are not paying that now. Might be a new game. I hate that as almost nothing really changes in my opinion but this has had its effect on the market. It is not uncommon for the market to go quiet for a decade (see the 70's). If your peak investing time coincides with that. Then it sucks to be you.
I have several friends who do very well timing the market. But the fact that it works so well implies that it is worth looking at. The market goes up more then down so buying large dips seems to be a no brainer.
I have used debt to expand different businesses several times. The number of businesses like a Google or Microsoft that just start to print money and don't stop are fewer and farther between then ones that need a boost now and then. I was there and I know most of had zero debt on our internet stuff. But in the brick and mortar world, you are unlikely to spin big numbers without borrowing at some point.