Straight Talk from Al Jacobs

 

 

HOW NOT TO INVEST

 

A newspaper ad caught my attention: “Are You House Rich and Cash Poor?” The seminar they held made it clear. As the lecturer explained, “your personal residence has all that money locked up just sitting there, virtually unemployed.” They recommend the homeowner incur a mortgage loan through their featured “Mortgage Consultant” and permit their “Wealth Strategist” to invest that money for you.

 

Let me offer a second opinion. Home equity isn’t unproductive.  My residence, delightfully free and clear of mortgage, has a monthly rental value. I’d need to generate a good bit of income if I had to rent my own house. Who sez I’m getting nothing by having it paid-off?

 

But it’s more than just a matter of money. I reject the concept. It’s not smart to take out a loan on your home, which must be paid, to invest in something that might not generate enough to make the payments. And in this case you’ll not even be in control. Your fate will be in the hands of a Mortgage Consultant and a Wealth Strategist you don’t even know.

 

As crazy as this may seem, many persons select their investments with no more thought than by response to mass solicitation advertising like this one. This is not a winning formula. Instead, the route to financial independence requires that you simply avoid these sorts of schemes, that you know exactly what you’re doing, and that you at least oversee, if not directly control, the details of your investments.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com