HELOC As Investment Tool

In Let Your Mortgage Make You Rich! we spend half the pages explaining how to use a home equity line of credit (HELOC) to your advantage in paying off your mortgage sooner. Essentially, it is a technique for multi-purposing your money, i.e., using the same dollars repeatedly for different things.

After you have your mortgage paid off or at least under control so that you can see the end, you'll definitely want to broaden your investments. In fact, if you have extra money, and are able to set aside today the money your clever payments save you on tomorrow's interest, go ahead and diversify right now. In other words, the same money cycling technique that can accelerate your mortgage payoff can also accelerate your investments.

A HELOC's value extends to many areas beyond college finances, making them a standard part of prudent financial planning, says Gary Schatsky, a financial planner in New York, "I have established HELOCs for all of my clients as a cheaper form of borrowing and as a cushion for emergency funds. A HELOC is preferable, as it is a tax-advantaged buying opportunity," he says.
 –from Kathleen Connell in the Christian Science Monitor

Another friend talks about using your HELOC to fund your Roth IRA.

Always, you want to make sure your return on investment warrants not only the cost but also the risk of whatever investment strategy your pursue.