Comments on: Leveraged Investments – Interest Rate Exposure http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/ Investing and Personal Finance Sat, 11 Feb 2012 17:11:02 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Leveraged Investments – Exit Strategies http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/comment-page-1/#comment-1778 Leveraged Investments – Exit Strategies Sat, 27 Oct 2007 03:18:39 +0000 http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/#comment-1778 [...] This is the last post in the “Leveraged Investments” series. Check out the previous post entitled xxx [...] [...] This is the last post in the “Leveraged Investments” series. Check out the previous post entitled xxx [...]

]]> By: Leveraged Investments – The Risks http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/comment-page-1/#comment-1776 Leveraged Investments – The Risks Sat, 27 Oct 2007 03:12:41 +0000 http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/#comment-1776 [...] Tomorrow’s post will deal with calculating how much I can comfortably borrow. [...]

]]> By: Q-Cash http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/comment-page-1/#comment-163 Q-Cash Fri, 22 Jun 2007 10:30:58 +0000 http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/#comment-163 Mr. C I told her if it doesn't work out, she could go back to work :-) Q Mr. C

I told her if it doesn’t work out, she could go back to work :-)

Q

]]> By: FourPillars http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/comment-page-1/#comment-111 FourPillars Sat, 16 Jun 2007 18:11:47 +0000 http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/#comment-111 <p>Thanks Q.</p> <p>I'm not really planning to have any investment loans during retirement partly because I don't think the tax rebate will be enough with lower income. However in your case if you have enough income it could be worthwhile. As always you just have to manage the risk.</p> Mr. C. has a valid point too. Thanks Q.

I’m not really planning to have any investment loans during retirement partly because I don’t think the tax rebate will be enough with lower income. However in your case if you have enough income it could be worthwhile. As always you just have to manage the risk.

Mr. C. has a valid point too.

]]> By: Mr. Cheap http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/comment-page-1/#comment-110 Mr. Cheap Sat, 16 Jun 2007 17:01:36 +0000 http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/#comment-110 Q: Promise her that if the investment doesn't work out (to pay the debt incurred) you'll go back to work. I think that's one of the best hedges young retirees have, they can always climb back into the trenchs and earn some coin if needed (not fun, but definitely a possibility). Q: Promise her that if the investment doesn’t work out (to pay the debt incurred) you’ll go back to work. I think that’s one of the best hedges young retirees have, they can always climb back into the trenchs and earn some coin if needed (not fun, but definitely a possibility).

]]> By: Q-Cash http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/comment-page-1/#comment-109 Q-Cash Sat, 16 Jun 2007 13:57:13 +0000 http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/#comment-109 FP I like your leverage buying series. I have not utilized any leverage because my wife is quite risk averse. We spent a long time becoming completely debt free (which has allowed my early retirement) so she sees that as problem. After a long discussion this past weekend, she seems to be more open to it, but I have to provide a bit of a business case to her. Your spreadsheet will be of great assistance. Well written blog. Q FP

I like your leverage buying series.

I have not utilized any leverage because my wife is quite risk averse. We spent a long time becoming completely debt free (which has allowed my early retirement) so she sees that as problem.

After a long discussion this past weekend, she seems to be more open to it, but I have to provide a bit of a business case to her. Your spreadsheet will be of great assistance.

Well written blog.

Q

]]> By: FourPillars http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/comment-page-1/#comment-108 FourPillars Fri, 15 Jun 2007 18:29:31 +0000 http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/#comment-108 Thanks Mr C - I actually have a "bonus" post for this series but I'll wait a bit to post. I think it's important to try to measure the risk of borrowing money so you don't have any unpleasant surprises if things don't work out. If you're struggling to buy your first house/condo then you might not have the option of limiting your borrowing to a 'safe' level but for investment loans you always have the option to borrow less (or none). Thanks Mr C – I actually have a “bonus” post for this series but I’ll wait a bit to post.

I think it’s important to try to measure the risk of borrowing money so you don’t have any unpleasant surprises if things don’t work out.

If you’re struggling to buy your first house/condo then you might not have the option of limiting your borrowing to a ‘safe’ level but for investment loans you always have the option to borrow less (or none).

]]> By: Mr. Cheap http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/comment-page-1/#comment-107 Mr. Cheap Fri, 15 Jun 2007 17:49:40 +0000 http://www.moneysmartsblog.com/leveraged-investments-%e2%80%93-interest-rate-exposure/#comment-107 Interesting conclusion to a great series. I think you're quite wise to look at a worst case scenario, figure out what you could carry, then limit your leverage play to that amount. If things go better then expected (which they damn well better since you're assuming a 15% interest rate!) then life is good! I did a similar calculation with the mortgage on my investment property. I figured after 5 years, if interest rates shot up what the payments would be on the remaining balance if I "reset" the amortization to 25 years. If you live within your means, its possible to give yourself quite a deal of flexibility to deal with just about any future possibilities. Interesting conclusion to a great series. I think you’re quite wise to look at a worst case scenario, figure out what you could carry, then limit your leverage play to that amount. If things go better then expected (which they damn well better since you’re assuming a 15% interest rate!) then life is good!

I did a similar calculation with the mortgage on my investment property. I figured after 5 years, if interest rates shot up what the payments would be on the remaining balance if I “reset” the amortization to 25 years. If you live within your means, its possible to give yourself quite a deal of flexibility to deal with just about any future possibilities.

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