I bet you didn't think you could borrow money at 6% and only earn 6% and still make money did you? The reason this works is not magic its just mathematics. The money you borrowed you paid simple interest on and the money you invested earned compound interest. That is why you come out so far ahead.

Now imagine you could write off the interest on that loan as a tax deduction. (And in most cases you can) How much did the loan actually cost you if you could write it off? Even less right? But even if you can not write it off it still works out pretty good for most folks. Also you might want to keep this in mind. What if you could earn more than a meager 6% on your money? How much better off could you be?

The point is the above example mathematically proves that there are much better things you could do with your money than just leave it sitting idle in your home. And more importantly the only thing we have discussed so far is the mathematics of investing your home equity but in reality there are many other issues to consider. Such as, is your home equity really safe or could it lose value over night? Can you access your home equity when you really need it? And so on.

If you have equity trapped in the bricks and mortar of your home perhaps you should reconsider how you invest the largest asset you have. Can you really afford to let your money sit idle or should ALL of your money be working for you? My advice is to talk to a trained professional about how to use all of your assets (even your idle ones) to your best advantage.

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