Reinvest HELOC money in stocks?

Question

Anyone take HELOC money and use it to invest in the stock market?

Or is the better option to take the HELOC money and reinvest it into another home?  Looking for "safest" option possible.

Jim Pellerin · Answer

Take your low interest HELOC loan and invest it in high interest secure real estate investments as a joint venture money partner or as a lender secured by a mortgage. Your profit will be the spread.

Seth Nadreau · Answer

NEVER EVER put borrowed money in to stocks.HELOC is a great way to pay down any debt as the interest rates are usually lower than any credit card and/or car payment you may have. From a net worth snapshot.... it's not really "Investing"... it's gambling.I took out a HELOC three months ago. Used it as a down-payment and renovations for an income property. Market rent is $1,600 and my mortgage + HELOC payment is $1,100. I hated tapping in to my personal equity, but I had to leverage it to get a new rental. That's $500 in monthly profit (which I'm actually using to pay off the HELOC principle) and I'm keeping the HELOC open instead of funding an account for reserves. Now I have tenants paying off my HELOC and my mortgage. I'll happily take my 31% profit/debt servicing each month rather than try to make 1% a month on stocks while carrying a large HELOC balance. Remember. Assets should be greater than liabilities... and stocks do much less to reduce your liabilities than an income flow does.

Steve Sun · Answer

Definitely buy another real estate, stock market fluctuates too volatile, taking HELOCs out with a relatively high interest rate, I'd definitely re-invest into another real estate which is much more stable than stocks.

Jim Pellerin · Answer

Not necessarily.  Your contribution could only represent a portion of the total loan. It all depends what the borrower is looking for.

Chris Roche · Answer

@Jim Pellerin Is that assuming with your HELOC you can cover 100% of the loan?

Reinvest HELOC money in stocks?

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