Hi All,
I have been diving deep into finance the last 12-18 months and starting to get to grips with how money, debt and the financial system really works in 2021. One of the conclusions I have reached is that banks, hedge funds, businesses, entrepreneurs, anyone with money really, are taking use of the ridiculously low interest rates to max out their borrowings and invest in real assets. Could be real estate, stocks, knowledge, people, bitcoin, any asset that will continue to grow and increase in value over time. This is the world we live in, right, how capitalism has evolved, with the key difference of the present being we have unbelievable cheap access to debt due to central banks manipulating interest rates.
If we apply this logic to our own personal lives, why are we not doing the same? Of course people do this through mortgages without really being aware of it, but why can't apply this logic to other areas of our personal balance sheets. We take out a long term loan at let's say 3% interest (seems to be the cheapest I can see available for regular Joe) and invest that in what is going to grow your net worth in the future.
I'm well aware this is risky stuff (harming credit score, global liquidation event bankrupting you) and I'm not even close to doing it, just trying to get some feedback from smart people here. I know this is a relatively prudent community which is why I wanted to get some opinions here, rather than wallstreetbets or something like that. If you have something to say on the subject, please share. Thanks in advance!
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