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0 pointsnaveen995y ago0 comments

Taxes are 1 time, mortgage interest is annual. You still have to pay off the principal + interest... at some point you will have to sell shares and pay capital gains anyway... leverage comes with its own risk. That’s why you don’t gamble with borrowed money.

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RestlessMind5y ago· 1 in thread

But you can invest those one-time taxes and generate far more returns than the interest costs. Historical S&P500 returns are 6% per year, where as we are looking at only 1% mortgage rates for a billionaire.

naveen99OP5y ago

Suppose there were no taxes. When would you stop taking on additional leverage with a 1% loan given historical returns of 6% ? I guess kelly criteria puts it around 2.5x. Now suppose you are already there, but now you add back taxes. Do you pay taxes or lever up ?

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