"In the case of other big-ticket items, such as houses, automobiles, or a college education, using credit sometimes makes sense. Borrowing to buy a house normally makes good economic sense, primarily because homeowners no longer have to pay rent. In effect, buying a house is like buying rental property where the buyer acts as his own tenant. Borrowing money to buy rental property is a perfectly legitimate use of credit, provided the rental income exceeds the cost of borrowing. The rent saved by a buyer who borrows is, in effect, phantom income that offsets mortgage payments. And owners who are their own tenants generally have few complaints about their landlords and vice versa. Borrowing money to overpay for a house on the bet that a greater fool will be around to pay even more, which was common practice during the recent housing bubble, is speculation and obviously not recommended,
as I discussed at length in Chapter 6 on the housing bubble." Peter Schiff from his book From His Book Crash Proof: How to Profit From the Coming Economic Collapse
Peter David Schiff, president of Euro-Pacific Capital, is a Connecticut-based brokerage firm have correctly predicted the U.S. stock-market collapse , the home mortgage meltdown and the credit crunch .
Peter Schiff discusses politics, world economies, and investment strategies and is now running for a Senate Seat in his native Connecticut , Peter Schiff is Author of the Best Seller Crash Proof How to Profit From the Coming Economic Collapse
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