From dhenwood at panix.com Thu Jan 27 09:06:50 2000
Sure people borrow to buy consumer durables, but they may
end up paying for it many times over.
Also true with houses: your 7.5% 30 year $100,000 mortgage costs you about $250k over the life of the loan. The question is: is it worth it? Saying "you paid too much" to someone who can't "afford" to pay cash is like Jesus telling you not to sin.
What does it cost to not have it?
At least you have the TV or the car, though. If you borrow
to buy a high-flying stock, you've got to get above-normal
returns just to pay the interest. And if it no longer flies
to high, you've got a big debt and nothing to show for it
except regret.
... and then:
Borrowing to go to school can give you a better life in
many ways, but wouldn't it be more civilized if tuition
were 0 and people didn't graduate with $60k in debt?
Why the double standard? For people whose educational "gamble" doesn't pay off ("Would you like a bookmark with that?") [let's be generous and put that figure at, oh, "most"], isn't borrowing to go to college not unlike racking up your Visa bill to take a 3 month trip to Europe visiting all the great cathedrals and museums, or spending a month at a spa in the desert? Good for the soul, good for the mind, lousy for the checkbook.
So?
Anyway, your direct correlation between margin debt and bubblicious stocks is unfounded.
/jordan