Borrowing is particularly hard if you are attached to your investments. Large borrowing shortens the margin for error. Smaller swings in value can destroy your equity and lead to loss of the asset. The intensity of emotion is high. You must have positive returns quickly and never drop below your equity value. Time shortens. For example, stock margin accounts are marked to market immediately. Your positions can be sold out from under you to cover your debt. Anger, regret, and disappointment are common with large borrowing.
Borrowing can also lead to long-lasting trauma. Some investment positions cannot be closed out easily or quickly. A mortgage will only be foreclosed if you fail to make payments even if the value of the property has dropped enough to eliminate your equity. However, a long period of paying the mortgage on an underwater property is quite painful. And the shame of returning a property to the lender is daunting. A forced foreclosure can also lead to publicity of your failure.
