Oddbean

What do you mean by “gear” their investments?! As a side note; I believe mortgages are highway robbery. 1st lien / position HELOC is a way better (equitable) way to pay for a house. Plus it’s simple interest and therefore paid off in about 1/3 the time of a traditional mortgage. But anyways..:can you explain what you mean by “gear their investments”?

They're borrowing longer (mortgage), to protect themselves against consumer-price inflation, and investing shorter in a real asset (stocks), to protect themselves against monetary inflation. People do the same with Bitcoin.

Thanks for the clarification. Borrowing to invest certainly falls into the Complicated and Intricate areas of #investing https://image.nostr.build/a95ff9757d434751ef216dea5a5126842efed1d2c533332772fda8f61c74d2fe.jpg

Re: HELOC what Rand said is mostly correct. However having the house fully paid is a not a requirement. Michael Lush literally wrote a book about it Replace Your Mortgage: How to Pay Off Your Home in 5-7 Years on Your Current Income https://a.co/d/3AneN7g https://archive.replaceyourmortgage.com/ nostr:note1cuqatg03yxz7tss28x2qzkgygnr0l47gw0y4qjv856r353836gvs5w8wxg

Traditional mortgages in Norway do not work the same way as in the US or UK. We don’t compound the interest on a mortgage. In that regard, there is less difference between a normal mortgage and a HELOC (“flexible credit”) in Norway. Norway: Interest is calculated on the principal during each payment period without being added to interest from previous periods. This means that you don’t pay interest on interest, unlike with compounded interest. USA/England: Interest accrues over time and can “compound,” creating a snowball effect because you pay interest on previously accumulated interest. This means that mortgages in Norway can be more favorable in terms of interest over time, as you only pay interest on the remaining principal, not on previously accrued interest.