How housing became the world’s biggest asset class

Re:How housing became the world’s biggest asset class by codegeek on Wednesday January 22, 2020 @07:33PM (#22123639)

I actually put 20% down 7 years ago on the house and I can tell you that if I had invested that downpayment purely in index funds, I would have a lot more cash today. So again, housing was not a good investment from an economic perspective. I bought it for my children but I look at it as a major expense and not investment.

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Re:How housing became the world’s biggest asset class by chii on Wednesday January 22, 2020 @11:00PM (#22124731)

if you were less risk adverse, it's possible to pull equity out of your house and have that reinvested in stocks, and continue paying the mortgage (and may be work out a way to make it tax efficient, like debt recycling). Then as long as the stock market out-performs the debt cost (which is likely), you win out ahead by quite a bit more.

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Re:How housing became the world’s biggest asset class by codegeek on Thursday January 23, 2020 @11:30AM (#22128861)

How would you pull equity out of the house other than doing things like HELOC ? HELOCs have huge interest and doesn't make sense to take that money and reinvest unless you know how to play the risky games like options trading etc.

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Re:How housing became the world’s biggest asset class by chii on Thursday January 23, 2020 @09:39PM (#22134891)

with a variable mortgage loan, a bank usually has a product called an offset account. When you pay back the principle, this offset account grows. It acts like a line of credit, and the max size is the value of the loan.

So essentially, it is a HELOC. But it's at the same rate as your home loan, which is usually quite a lot lower than the margin rate if you borrowed to buy shares. Of course, this offset loan cannot go higher than the equity you've already paid back, so unlike a margin loan (which can go up to 10x!?).

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