Maximise mortgage borrowings when you're young

Mortgage borrowing advice

Borrow as much as possible! You won't see me writing that very often. Let me caveat this...a lot.

I want you to borrow as much as you possible can for your first mortgage limited only by what you can physically afford to pay back. You should only do this if you've got at least a couple of decades until retirement.

You want me to borrow as much as possible - are you mad?

On my blog I have long advocated being very careful when it comes to debt. In a very short summary I have always argued that you should avoid it like the plague. Even with a mortgage I used to argue that if you have to have one (and let's be honest 99% of us will require one) then at least make sure that you try to pay it off as quickly as possible. Over the years I have since refined my understanding of debt and now would encourage large mortgage borrowing under the right circumstances.

Good debt and bad debt

A really quick lesson in wealth: the poor man uses his own money to invest and grow his wealth; the rich man uses other peoples'. Buying a property that will grow in value over time with someone else's money is how to grow wealth quickly.

Case study: Growing wealth with borrowed money 

Let's say that you have £100,000 to buy a house with. There are two scenarios:
Scenario 1: you buy a small property outright. Over the next 30 years the property grows in value tenfold. You now have an asset worth £1,000,000. Well done.
Scenario 2: you but a larger property worth £300,000 by putting down a £100,000 deposit and getting a £200,000 mortgage for the rest. Over the next 30 years the property grows in value tenfold. Additionally ou end up paying £400,000 back to bank in terms of debt borrowed and interest. However, you now own  an asset worth £3,000,000. Minus the £400,000 and you're net assets/ overall benefit is £2,600,000. This is a 260% better outcome than in scenario 1.

Borrow until you can borrow no more

I hope that you can see from the case study above that the sensible thing to do is use other people's money to invest and buy assets. It's dangerous to purchase things on credit that aren't assets such as cars or holiday. However, if by borrowing you are able to purchase a fat appreciating asset and you have the time and the funds in order to afford the repayments over the mortgage term then you should try to borrow as much as possible.

Do you like what you've read? Tell your friends by sharing it with one of the buttons below. Please post this to Facebook or Tweet it to help your friends and family. Feel free to send me an email (, find me on twitter @millionairer0ad or comment. Whether good or bad, I want to hear from you all.

FinTech start-ups and the role of crowdfunding

The FinTech industry has witnessed a huge amount of global investment and growth over the past few years. Between 2010 and 2015 alone, there has been a staggering $49.7 billion, a quarter of which was invested in the first two financial quarters of 2015. This trend of huge investment into FinTech has lead to a massive growth worldwide. This includes millions of FinTech start-ups appearing year on year offering a broad range of financial software solutions.

However, just like any other industry, finding funding in FinTech for a new start up can cause many great concepts to fall at the first hurdle. Attempting to borrow capital in the current economic climate through traditional bank lending, which are subject to stringent regulations and outdated processes can not only take a long time to process, but also it may not be guaranteed.

The latest funding alternative

But as is always the case in business, there are always people looking for alternative ways to raise capital for a new business venture, and a leading trend that is boosting the financial prospects for many new FinTech ventures is crowdfunding.

The whole concept of crowdfunding is to raise small amounts of capital across a large number of investors to generate a collective pot of money that can then be invested into the business. Managed correctly with comprehensive capital market solutions, it can be a very effective way of generating enough capital to launch a new start up and make the money go further too.

With this in mind, it is now playing a huge role in FinTech start-ups who are now appealing to the masses for investment and moving away from the larger banks. These don’t even have to be people with huge capital to burn; as the beauty of crowdfunding is that anyone with even a small amount of capital can make an investment into something they believe could be a success.

In the UK alone, crowdfunding is having a significant impact on the FinTech industry. And in some instances the amount of capital raised can far exceed the initial expectations like it did goHenry, a British FinTech start-up who designed a pre-paid debit card and app aimed at teaching children how to manage their money from a young age. They sought additional funding for their venture through crowdfunding campaign with Crowdcube, with an initial target of £2million that was raised in less than 48 hours - they then went on to secure a record £4million from more than 2000 investors.

Is this a continuing trend?

With such a buzz around crowdfunding and so many success stories within the FinTech industry, this does raise the question of whether this method of raising capital is likely to continue and whether traditional banking institutions are in danger. Certainly with many FinTech companies offering crowdfunding services themselves it would suggest it’s here to stay for the foreseeable.

Naturally, one of the attractions of crowdfunding for start-ups is the ease and quickness that capital can be raised. Although it requires a company to promote their concept to a wider audience, this can be done effectively through crowdfunding companies. Furthermore, crowdfunding campaigns allow start-ups to make a more compelling and emotional connection with investors, particularly if they have a concept that is relevant to the potential investors, designed to enhance customer experiences.

On the flip side, banks still require certain regulations and objectives to be met before they can authorise credit or loans, regardless of whether the individuals believe in the concept’s prospects or not. This could pose a problem for banks, unless they change their business models, if the prosperity of crowdfunding campaigns for FinTech start-ups continues as it is. Banking institutions that historically profited from business loans and credit could miss out on a sizeable chunk of revenue, where they made profits on interest repayments, which could have the potential to affect the bottom line.

Revealed: How Rich People Get Even Richer

You’ve probably heard the expression ‘the rich get richer.' It refers to a common view that no one gets richer apart from those with money. But, how do rich people get so much richer? What are they doing to generate more income? Today, I reveal everything and show you just how they do it:

They Open Businesses

How many rich people do you know that start opening multiple businesses? It’s a popular tactic to turn their fortune into something even more epic. A successful business venture can make you so much money. Just think about all the profits you can make. And, once you have a taste for business, you may want to open more. Before you know it, you own multiple successful franchises and are a millionaire! This is how rich people become even richer throughout their life. There’s no reason you can’t open a business either. Seek out the funding, and get started making your dream a reality. Slowly but surely, your successful business makes more and more money. Your fortune increases, and you’re in the same boat as those rich people you used to envy!

They Invest Their Money

Being rich gives you the obvious benefit of having a lot of money. This gives you the chance to invest large amounts and turn it into even more money! Rich people do this all the time to grow their fortune. And, it’s something you should do too. While they invest mini fortunes, you can invest as much as you can afford. The key is finding safe and secure ways of investing. Things like self-managed super funds are safe and secure ways of investing in property. This is good as property itself is a very safe investment choice. You can take things like an SMSF 30 second quiz to figure out if this investment idea is right for you. If it isn’t, then you always have other options like share trading, investing in gold, etc.

They Never Give Up

I think we’ve all been in a position where we’re envious of a rich person. We see them with all their money, and then hear that they’ve made even more. How do they have all that money? We ask ourselves, as we look on jealously. Well, one of the reasons the rich get richer is because they never give up. They’re not satisfied with sitting on a fortune and retiring early. Where’s the fun in that? A lot of people think rich people are greedy when they keep looking for ways to make money. But, I think it shows commitment, particularly to their future. The more they make, the more their children will have when they pass away. It sets the family up for a good financial future. If you want to be rich and stay rich, you have to work hard for it. Don’t earn a fortune at thirty and then retire and do nothing. Make your life productive and look for new and interesting ideas at all times.
So, if you want to be rich, you should follow the same principles as rich people. Do these three things, and you can start growing your fortune today.


Information on this site is not appropriate for the purposes of making a decision for carrying out a transaction or trade nor does it provide any form of advice (investment, tax or legal) amounting to investment advice, or make any recommendations regarding particular financial instruments, investments, or products.
Always seek advice of a competent financial advisor with any questions you may have regarding a financial matter