Seth Godin Personal Finance Advice
For those of you familiar with the name Seth Godin, you likely associate him with thought leadership on marketing and branding as demonstrated through the many books he's penned over the years.
However, I'd like to call your attention to some recent financial advice that he mentioned on his personal blog -- quite a departure from his usual subject matter.
In his post "Urgent Personal Financial Advice" he recommends:
Only borrow money to pay for things that increase in value
He elaborates with:
It's a short list: your business, your house and your education, mostly. Stocks if you're smarter than me. That's pretty much it.
I agree with Mr. Godin 100% except for his point about stocks. I can't speak to whether you or anyone else is smarter than Seth Godin, but very rarely, if ever, would it make sense to borrow money to invest in stocks.
I've heard several persuasive arguments for the strategy over the years, but I just don't think it makes sense to leverage yourself like that. Sure, your gains could be magnified, but so can your losses.
And I'm not just talking about borrowing on margin.
I've encountered many people over my years as a financial advisor that have money invested in the market, but they also carry a balance on a credit card with outrageous interest rates. I've never seen the logic in that.
Anyway, thanks to Seth Godin for some simple, straightforward advice that makes sense.