# Personal Worth = Available Credit? **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [September 23, 2007, 12:52pm UTC](https://boards.straightdope.com/t/personal-worth-available-credit/420188 "2007-09-23T12:52:39Z")\ **Posts on this page:** 5\ **Page:** 3
**Author:** ![Throatwarbler\_Mangrove](https://avatars.discourse-cdn.com/v4/letter/t/8c91f0/32.png) [@Throatwarbler\_Mangrove](https://boards.straightdope.com/u/Throatwarbler_Mangrove)\ **Post date:** [September 25, 2007, 1:08pm UTC](https://boards.straightdope.com/t/personal-worth-available-credit/420188/41 "2007-09-25T13:08:39Z")
> [@](#): > > You said corporations leverage their debt to their eyeballs, so people should, too. Unless we’re talking about Enron or Tyco or various other bad apples, AFAIK, corporations generally don’t use debt to pour large amounts of money on items that don’t improve the bottom line. If you’d like to explain how spend thrift consumer spending is a good financial strategy, go for it. You seem to be confusing “leverage” and “spendthrift consumer spending”. I certainly never made such an equivocation. If you want to keep beating that strawman, go ahead. > [@](#): > > And as far as real estate, I agree that the markets would probably be a better investment if you could make some sort of shelter out of mutual funds to provide you with warmth, comfort, and protection from the elements. What you are referring to is the notion that real estate investments are a “hedge” against inflation, in the sense that housing costs make up a large part of the CPI. This is easily worked into the equation - the cost of housing isn’t some unknown intangible, but irrelevant, because in purely financial terms, it IS throwing money down a hole. > [@](#): > > Now you aren’t talking about borrowing, you are talking about fraud - that can get you in even deeper. Both civil and criminal charges, liens against your property, even potentially jail time depending on how much fraud you engage in. I am talking about a friendly loan with my friend **Shagnasty**. What evidence do you have that I am attempting fraud?Is there not some kind of board rule against this kind of slander? ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [September 25, 2007, 4:53pm UTC](https://boards.straightdope.com/t/personal-worth-available-credit/420188/42 "2007-09-25T16:53:02Z")
[QUOTE=Ravenman] And as far as real estate, I agree that the markets would probably be a better investment if you could make some sort of shelter out of mutual funds to provide you with warmth, comfort, and protection from the elements. So far as I understand, the rule of thumb is that, all things considered, buying a house is a great move, because it is a better investment than renting, more pleasant than being a hobo, and more polite than crashing with friends for one’s entire life. [/QUOTE] This is a common mistake/fallacy when comparing renting and buying. No one is suggesting that you compare $x in mortgage to $x in mutual funds and not account for what it costs to live somewhere. But when you compare $x in mortgage to $y in rent and $x-y in mutual funds. In many cases (especially right now with housing prices sky high), renting is a better move. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [September 26, 2007, 12:09am UTC](https://boards.straightdope.com/t/personal-worth-available-credit/420188/43 "2007-09-26T00:09:50Z")
[QUOTE=Throatwarbler Mangrove] I am talking about a friendly loan with my friend **Shagnasty**. What evidence do you have that I am attempting fraud?Is there not some kind of board rule against this kind of slander? [/QUOTE] Well, in that case I’d be happy to loan you money. Please just post your bank account information and I’ll transfer it to your account today. ---
**Author:** ![Batsinma\_Belfry](https://avatars.discourse-cdn.com/v4/letter/b/ea5d25/32.png) [@Batsinma\_Belfry](https://boards.straightdope.com/u/Batsinma_Belfry)\ **Post date:** [September 26, 2007, 7:03pm UTC](https://boards.straightdope.com/t/personal-worth-available-credit/420188/44 "2007-09-26T19:03:14Z")
It’s people like this that caused the new restrictions in the bankruptcy laws. Max out your credit cards, get an unexpected expense, file bankruptcy. Rinse and repeat. I’m sorry to say, I know people who are living this way. Except on a much lower income. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [September 26, 2007, 9:32pm UTC](https://boards.straightdope.com/t/personal-worth-available-credit/420188/45 "2007-09-26T21:32:47Z")
Your friend is an idiot. Even if you want to live a heavily leveraged lifestyle, who the hell does it at 18% APR? If you assume about %25 salary taken out in taxes, they are still paying for a $175,000 a year lifestyle on $150,000. At some point they ARE going to run out of money and credit. [QUOTE=Throatwarbler Mangrove] In the long run, buying real estate is generally “throwing money down a hole”, since in the long run, real estate only appreciates at the rate of inflation, and historical returns on equity markets far, far outstrip returns on real estate, but I’m not going to castigate anyone buying a house for being a spend rift. Most people don’t live for the sole purpose of dying with the most money. [/QUOTE] I don’t know. You know the old saying - buy land because they ain’t making any more of it. Plus you can borrow against the equity in your house. [Previous page](https://boards.straightdope.com/t/personal-worth-available-credit/420188.md?page=2)