One perspective on the current used boat market

Ok...reverse the question....if your boat (or your house for that matter) was paid for, would you take out a loan against the boat (or house) to use the loan proceeds to invest?
 
That is a logical extension of this line of thought. If you are *confident* that you can get a higher investment return than a loan will cost. . .yes you SHOULD pull all the equity you can out of your house.

Of course. . .you have to be prepared for what happens in bad years like 2002 or 2008. You could end up in real bad shape.

I personally don't like those type of risks. When I bought my SeaRay in 2006, I opted against the home equity loan. (and I also opted for a 9 year old boat rather than something shiney, big, and new)
 
comsnark said:
That is a logical extension of this line of thought. If you are *confident* that you can get a higher investment return than a loan will cost. . .yes you SHOULD pull all the equity you can out of your house.

Of course. . .you have to be prepared for what happens in bad years like 2002 or 2008. You could end up in real bad shape.

I personally don't like those type of risks. When I bought my SeaRay in 2006, I opted against the home equity loan. (and I also opted for a 9 year old boat rather than something shiney, big, and new)
Click to expand...

I'm with you! Borrowing money to invest is a little too scary for me. I would rather not owe money if I don't have to.

I especially don't want to commit to a loan on something that I will still be paying for long after I don't own it anymore, or will be worth less than I owe on it a few years down the road.

My 20 year old Sea Ray takes me to all the places I want to go right now and it's paid for. I might even seize the opportunity to move up a bit if the right deal comes along.

Lots of deeply discounted used boats for sale around here these days. A lot of guys took home equity loans on top of their mortgages when times were good to buy big boats and expensive cars. The problem with that logic is that some of them found themselves upside down in their houses when the real estate market took a dip, they can't give away the big expensive SUV they bought a few years ago because of gas prices, and they can only get about 50 or 60 cents on the dollar if they try to sell the boat they still owe a fortune on.

The smartest thing for people in that position to do right now is to sit tight and keep up with the payments until things get better a year or two down the road.
 
comsnark said:
That is a logical extension of this line of thought. If you are *confident* that you can get a higher investment return than a loan will cost. . .yes you SHOULD pull all the equity you can out of your house.

Of course. . .you have to be prepared for what happens in bad years like 2002 or 2008. You could end up in real bad shape.

I personally don't like those type of risks. When I bought my SeaRay in 2006, I opted against the home equity loan. (and I also opted for a 9 year old boat rather than something shiney, big, and new)
Click to expand...

I totally agree...that is why I asked the question. There is just too much risk. But it is kind of weird how how you look at it when asking the question like I did. When you look at borrowing against something that is paid for(ie. house or boat) you factor in the risk.
 
Bottom Line said:
Ok...reverse the question....if your boat (or your house for that matter) was paid for, would you take out a loan against the boat (or house) to use the loan proceeds to invest?
Click to expand...
My rule has always been that my home is off limits. A second home or any other asset is there to be used however I choose.
 
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