No. of Recommendations: 3
I’m not innocent when it comes to leverage. I hold mortgages in order to buy more stocks, most recently via 30 year fixed at 2.875%.
Early on when Apple started paying a dividend, it yielded something over 2.25%. I know someone who mortgaged his house using an I/O loan at 2.5% or so and put it all into Apple and used the dividend to cover the interest payments. A few years later, the stock had more than doubled, likely more than tripled, and it turned into a terrific investment. By the time he had to pay off the principal (5 years maybe?), the stock was worth a few multiples of the loan!
