On Thu, 07 Aug 2008 11:37:46 -0700, Darren New wrote:

> Jim Henderson wrote:
>> On Thu, 07 Aug 2008 09:49:24 -0700, Darren New wrote:
>> 
>>> Jim Henderson wrote:
>>>> I don't want to owe that
>>>> kind of money on an unsecured loan of any kind.  I'd much rather have
>>>> things paid off (that's a really good feeling to have).
>>> That's good.  But better an unsecured loan than a secured loan! :-)
>> 
>> Well, from a credit standpoint, a secured loan like an equity line
>> (where the "security" is the property) makes good sense.
> 
> Sure. I just meant that all else being equal, having the person you owe
> money to being unable to do something about it if you don't pay them
> back is a good thing. :-)
> 
> Of course, it's easier to get a lower rate and more money on a secured
> loan.

Oh, ISWYM.  And yes, good point.

>> I have heard some
>> people use the equity in their homes to make money (by investing it),
>> but that seems a little risky to me.
> 
> Everything that makes you money is risky. It's a matter of whether the
> payment is worth the risk.

True.  I know that some loans do prohibit certain uses of the money, but 
that seems *generally* easy to get around - you don't use the loan money 
for investing, but you use it to pay for what it's allowed for, freeing 
up other money for investment.  I suspect those types of restrictions 
would be very difficult to enforce.

>> But using that money appropriately is the key - using it to enhance the
>> value of the property through improvements seems to be the best route
>> to go.
> 
> It certainly doesn't hurt.  Even better is saving up, *earning*
> interest, *then* putting the roof on, if you can wait.

Of course.  Most people find it difficult to save up the $14K that we had 
to spend (total tear-off and replace).  But most people are very poor 
money managers. :-)

>> types of "secured" credit cards (where you pay money as a security
>> deposit and then your limit is set to what you put down as a deposit).
> 
> The quotes shouldn't be around "secured" but around "credit" there. It
> isn't a credit card if you're not borrowing the money.

True....

Jim

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