How much do u pay yourself?
Question: Try margin buying in todays market and I suspect you’ll be disappointed. And, I can not fathom where margin buying would be safer than borrowing money on one’s home. So believe margin borrowing is safer than borrowing against one’s home (in most cases). How? Why
Answer: Given the context – a person who chooses not to keep a cash/cash-equivalent emergency fund, who then proceeds to have an emergency — absolutely, I think margin borrowing is better than using home equity. Margin borrowing implies that the person has assets in a brokerage account which could be liquidated easily anyway, but he chooses to leave those assets as they are (for any of a variety of reasons, though the most likely is avoidance of potentially huge cap-gains taxes).
The downside risk of a short-term margin loan is that the equities tank, a margin call goes through, his stocks are liquidated and that’s the end of the story.
The downside risk of borrowing against his house is he loses his house.
Related Posts
Filed under: Home Equity Loan
Leave a Comment
XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
TrackBack URL | RSS feed for comments on this post.