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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Joe Smith who wrote (25485)	5/8/2000 3:33:00 PM
From: Rande Is	Respond to of 57584

Good point on paying off old debt with new profits, Joe.

To: Joe Smith who wrote (25485)	5/8/2000 10:44:00 PM
From: Tradelite	Read Replies (1) \| Respond to of 57584

re:paying off home equity or credit card debt with stock market profits..... After many years of helping people try to realize their home ownership goals, I can deliver an unwelcome lecture about debt. Debt often prevents people from buying their first home or trading up to the bigger home they need when their family grows.....or sending their child to college without undue hardship...or retiring on a nice nest egg. Stay away from credit card debt.....that's a money loser, no matter how much money you are making from your investments. Home equity loans are sorta OK, given their treatment under federal tax laws....but NO DEBT is better. If you have debt and are playing the stock market, pay off the debt first, even if it means getting out of the stock market. There are cyclical periods of time (a year or two or three) when putting your money in guaranteed-return investments such as CDs or money-market funds are better than "investing" in real estate and/or better than trading in the stock market. We could be in one of those multi-year periods now. The nice thing about the stock market, provided you don't trade on margin, is that when you buy a stock, and it goes down, you only lost the money you put in. The bad thing about real estate debt is....if you have to sell the property for less than you paid, you have to reach into your savings and pull out money to pay off your lender. Have seen many affluent and not-so-affluent people do this. Not fun. Not good for your family's financial security. Not good for your peace of mind. Stay out of debt. Pay all credit cards off in full each month if you can. Real estate mortgage debt is acceptable, due to tax benefits, if your monthly cash flow permits. If you are delving too deep in risky stock market debt, reexamine your goals and your means. Sorry....couldn't resist. Have seen too many cases of anguish caused by debt. And we all have to admit that today, we are being "sold" on going into debt every time we turn around.....how many solicitations did you receive this week from credit card companies? I received approximately five or six. Credit is cheap, until you have to pay it off.