12-07-2021, 05:52 PM
Why don't more people leverage themselves with debt?
<!-- SC_OFF --><div class="md"><p>If you can get a low interest loan for 1% or 2%, wouldn't it make sense to take a loan to fund daily expenses? Then you use a portion of the salary for loan monthly payments, and invest what's left in an index fund. Wouldn't that leverage your income the best way possible? If that's not possible in practice, then why?</p> <p>I have been thinking about this for a while and due to high inflation and the fact the market always goes up (it does go down, but then it bounces back), why don't more people embrace debt to fund their everyday expenses while using their income for monthly payments and investments?</p> <p>I know rich people like to get cash from low interest loans against their holdings instead of selling them and paying tax+losing on potential future gains. Why don't normal people do that as well, even if to a lesser degree?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/BigBootyBear"> /u/BigBootyBear </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/ravv6d/why_dont_more_people_leverage_themselves_with_debt/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/ravv6d/why_dont_more_people_leverage_themselves_with_debt/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>If you can get a low interest loan for 1% or 2%, wouldn't it make sense to take a loan to fund daily expenses? Then you use a portion of the salary for loan monthly payments, and invest what's left in an index fund. Wouldn't that leverage your income the best way possible? If that's not possible in practice, then why?</p> <p>I have been thinking about this for a while and due to high inflation and the fact the market always goes up (it does go down, but then it bounces back), why don't more people embrace debt to fund their everyday expenses while using their income for monthly payments and investments?</p> <p>I know rich people like to get cash from low interest loans against their holdings instead of selling them and paying tax+losing on potential future gains. Why don't normal people do that as well, even if to a lesser degree?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/BigBootyBear"> /u/BigBootyBear </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/ravv6d/why_dont_more_people_leverage_themselves_with_debt/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/ravv6d/why_dont_more_people_leverage_themselves_with_debt/">[comments]</a></span>Kind Regards R