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Comment by tlb | Hacker News Reader

There's no such thing as "more than you can invest". Investment in public stocks scales very well -- $100B is no problem.

Directly owning real estate, on the other hand, doesn't scale that well. You need to hire property managers, and deal with municipal tax and assessments for each property. If you own several properties, you have to deal with hurricanes and earthquakes and fires and local zoning officials more often than you'd like.

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Owning raw realestate requres management, like any other business. but there are REIT. I'd much, much rather have 5 million in a vanguard REIT than Seattle/SF realestate...

Taking loan on a reit isa different issue, however.

It would be similar if they allowed people to use their ownership of stocks and index funds to use as leverage to borrow funds to buy more stocks. They could borrow based on the risk ratings of stocks, and everyone knows it's a fact that index funds are the safest investment out there so the risk on that should be close to 0 and allow the biggest leverage. I'm going to stop right there, I'm starting to frighten myself.

Index funds usually halved in value during the financial crisis. They still have exposure to whole-market crises, even if single sector or company crises don't touch them much.

I was being sarcastic there. Everyone also knew for a fact that property is a very safe investment and things backed by property is a very safe investment.

Before the stock market took a knock over the past two years, people were talking the same way about index funds as they were talking about property. The same thing with bitcoin really.

I have a bit less faith in real estate than you do. My impression is that, from a regulatory point of view, real estate is regarded as a safe investment because that results in cheap mortgages, and cheap mortgages are popular among voters.

It's not that real estate is safe per se.

Index funds usually recover to before-crisis levels in about 5 years, so they're not terribly risky in that sense.

The Bitcoin believers were always lunatics. That people will believe in stupid shit is nothing new.

This is being done

http://www.finra.org/investors/dangerous-game-using-your-por...

People do that. Plus far more people do it 'indirectly' through options.

So people who are working under this public stock company will buy more house. Stock is not a physical investment, but indirectly converted to such.

That's... extremely indirect. When you buy a public stock, there is no flow of money from you to the company. That's stock they already sold to someone else, a long time ago.

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