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Money and Finances
Reply to "Cash out refi to invest in stock market?"
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[quote=Anonymous]OP, my corporate finance professor in my MBA program would say you've invented a magic money machine. Imagine that -- borrow money at 3%, invest it and make returns at 10%, and you'll be rich! Why stop at $100k? Why not borrow $1 million? The reason of course is risk. The market is no sure thing. If you invested in the S&P 500 as recently as Jan 2018, you'd be down 6.2% by the end of 2018. So you'd have not only that loss, but you'd be stuck paying back the loan of money you borrowed to invest. Even worse in 2008 -- the S*P lost 38.4% that year. Think it's a one-year thing? The S&P lost 10%, 13%, 23% in years 2000-2002. [/quote]
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