Tim Har­ford, author of The Logic of Life and The Under­cover Econ­o­mist, believes that young peo­ple “should be buy­ing more stocks and run­ning up debts to do so”. He sup­ports this con­tro­ver­sial view­point with the following:

The log­i­cal way to fight gen­er­a­tional risk is to bor­row money to make large, reg­u­lar invest­ments in stocks while young, then use a pro­por­tion of later sav­ings to pay back the loan rather than to pile into the stock mar­ket in mid­dle age. That sounds risky, but it is, in fact, exactly what peo­ple do in the hous­ing mar­ket. Know­ing that they will need a place to live all their lives, they tend to buy a small house and grad­u­ally trade up to a big­ger one, pay­ing off their mort­gages only late in life.

Most of us need a retire­ment fund as well as a place to live; there is noth­ing intrin­si­cally risky about reg­u­lar bor­row­ing to get that fund off to an early start.

If you recog­nise the arti­cle, it may be because it also appeared in the Finan­cial Times a few weeks back.