That’s a bad plan unless you’re fine with a decent risk of foreclosure—the market can (and in the past, has) go down and stay down for 10+ years. If that happens, you now have lost much of your equity in your house and have payments to make. If that coincides with losing your job (which is of course correlated with the market) then you’re at high risk of being foreclosed on.
If you really want to have higher returns with higher risk, another strategy is to buy stocks on margin. You can’t have the extreme multiples of the 1920′s, but you can still get much higher returns. The tradeoff is the potential to also lose it all.
Of course, you might think that that risk is worthwhile for the extra returns, but they definitely are not for me.
Easily worth it for me. Margin is probably a better deal and should be taken advantage of first. But the idea of being so attached to a particular house that you’d give up a chance to be significantly wealthier just to avoid the risk of foreclosure sounds nuts to me.
The market may go down for 10 years but you’re not gonna stay unemployed for 10 years. If you lose your job in a developed country for reasons that are correlated with the market (i.e. not quitting or misconduct) you get unemployment, which is more than enough to live on.