[bombcar]

The thing to always remember about debt - is that someone who is much more financially astute than you (the bank) would much rather loan you the money to do whatever it is you're going to do with it than do that thing themselves.

[adwn]

That's not a good argument, because it proves too much [1]. You could use the same reasoning to argue against pretty much any transaction:

* Don't buy bread, because someone who knows much more about bread (the baker) would much rather sell you the bread than eat it themselves.

* Don't buy a car, because someone who's much more familiar with the car's design (the manufacturer) would much rather sell you the car than drive it themselves.

* Don't buy the book, because someone who knows its content (the author) would much rather sell you the book than put it into their own shelf.

Specialization exists in all but the most primitive of economies, so while not every loan is a good idea (obviously), many loans benefit both sides. A bank doesn't make a profit from money just sitting in accounts, that's why they loan it out to someone who can use it to make profit – like a company that wants to buy a new machine to work more efficiently. The bank could buy such a machine as well, but it wouldn't be able to use it in a profitable way.

[1] https://en.wikipedia.org/wiki/Proving_too_much

[bombcar]

It's a rule of thumb and I should have specified that it most particularly applies to borrowing to invest - you should be able to identify the secret sauce that you have (and others do NOT) that allows you to make money where others can't.

A bank won't use a machine to manufacture something, and perhaps you have the skills needed to do so.

But deceiving yourself that you can "borrow cheap, invest it in the stock market, and always come out ahead" - if it was always or even for the most part, why would anyone lend money and not do it themselves?

Because you're missing risk.

[jallen_dot_dev]

> why would anyone lend money and not do it themselves?

Because there are regulations that limit how banks can invest deposits.