Originally Posted by Gerrard155

Holy crap there are about a million armchair finance experts in here who have no idea what the **** they are talking about.

Originally Posted by Ronski

That's a highly inaccurate statement. You're in the wrong funds. There may be reasons to pay off the debts you are describing, but your explanation isn't one of them.

Originally Posted by TooManyVehicles

And what you are failing to include in your discussion is that the 8% return is not risk free. As an aside, the SP500 return in 2015 was 1.4%, not 8%. Look, I'm not telling you (or anyone else) that investing in equities is not a good idea....it is (over the long run) as the stock market is not a zero sum game. That is, as productivity increases overall economic wealth increases and that is reflected in equity returns. I was able to retire early because of my investments in the market.

What I am saying is that the game of borrowing to invest can increase returns, but it also increases risk. End of story. It is critically important to understand that. I can also tell you that I've made some of my best investments when those same leveraged people were being washed out of the market, either through margin calls or just scared out due to their investments collapsing while at the same time their debt remaining. I've had friends who have lost serious coin because of leverage.

There are a lot of people who think they can play the game, and say that they are in it for the long run. But when the .... hits the fan, and you are losing big bucks day after day, week after week in the market, those same people realize that they don't have the risk tolerance and get out (near the bottom). Let's put this in perspective. For example, in the 1987 crash I lost over a years salary (gross) in four hours. Four hours. That's when you learn your real risk tolerance! (I was a net investor during the crash because I had cash to invest.)

Originally Posted by daaaaaan

Finally a well thought out response! Although I have your years salary lost in four hours beat last week (Gotta love VRX). I agree the market is a zero sum game, but this thread reassures my judgement of the market is correct, and it's pretty easy to exceed the 50% intelligence level and come out on top.

Originally Posted by daaaaaan

Except some of us earned a Finance MBA

Originally Posted by Gerrard155

Thats great-still doesnt mean you know what you are talking about. Personal finances are a complex blend of personal needs and environmental conditions. And there are plenty of "very smart" financial gurus who have made some of the worst decisions imaginable. The fact that ANYONE thinks they can provide anything resembling sound financial advice over the internet without knowing individual and environmental conditions is comical to me.

Originally Posted by Ronski

True, but it's given a couple of these guys an opportunity to brag about who lost more money in four hours. Surely this makes it worthwhile.