Should You Borrow To Invest More?

The short answer is no. I am not an economist, but I have always believed that having little or no debt as an individual (or as a country for that matter) is certainly more desirable than drowning in payments. While there is a period in everyone’s life where debt is necessary, the ultimate goal for most investors is to eventually become debt free.

Apparently not everyone agrees. Much to my surprise I found Ken Fisher, CEO of Fisher Investments, heavily promoting the use of debt as a good thing in his article titled “Learning to love debt.”

While it makes for interesting reading, there isn’t much I can agree with, especially since he makes no distinction between debt for investment (growth of business) and consumer debt (reckless spending). Some of his comments about the economic benefits when a heroin addict borrows money might even make your hair stand up.

I far more enjoyed the article analysis/rebuttal by Michael Shedlock, who writes on global economic trends. His points are succinct and well thought out. He even went through the trouble of calling Fisher Investments to find out how Ken uses debt and leverage himself. Turns out he doesn’t use it at all!

Huh?

Apparently, Ken doesn’t eat what he cooks. There goes the credibility. Oh well…

Original article here.