The security backing a loan has a large impact on the emotional aspects of the loan. If the loan is secured by the same investment it was taken out to purchase, then a loss will be painful, but will not threaten your household. However, reckless speculators use second mortgages to finance options or future strategies. This creates stress on the household. A disastrous speculation will either require many years to pay off the second mortgage or lead to an eventual loss of the house. Even when the speculation is successful, overconfident speculators often fail to pay off the second mortgage and reinvest in another risky scheme.
A loan from credit cards or a personal line of credit can be equally stressful. If the investment does not work out, you must pay off the loan from salary or other assets. Credit card loans used to purchase tech stocks are common today in bankruptcy court. Stealth borrowing is troubling as well. You may believe that borrowing by a stock or bond mutual fund manager or hedge fund manager does not affect you. Whereas a personal line of credit would keep you awake at night, a leveraged bond fund allows you to sleep. This is fine if the fund is successful. However, leveraged funds are highly volatile and can quickly go under. You may be in for a month of nightmares.
