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Borrow $$$ to Invest in Stocks?

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Fry: "What are we going to do?"
The Professor: "I know! Let's play the lottery."
Amy: "No, let's buy internet stock!"
Zoidberg: "On margin! Zoidy wanna buy on margin!"
Fry: "I know what's going on here. You've all become idiots."
 
Originally posted by: HeroOfPellinor
Wait. Are you the guy making $60K with web hosting, Ebay, and web design and going to school and working a regular job?
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No...
Just graduated university, steady job...

Unless i missed the joke? 😛
 
One other thing, if you haven't done it already, is to start up a nestegg/rainy day fund in a highly liquid account. This would be a money market fund or a standard savings account.

Basically you want to start building up somewhere between 3-6 months of *true* living expenses in a place you can easily withdrawl from in the event that things turn for the worse.

Stocks don't count. You aren't guaranteed a sell (thin stock/illiquid stock) and you aren't guaranteed that the funds will be there (devaluation of the equity).

Protect yourself first, then think about going higher risk.
 
Originally posted by: vi_edit
One other thing, if you haven't done it already, is to start up a nestegg/rainy day fund in a highly liquid account. This would be a money market fund or a standard savings account.

Basically you want to start building up somewhere between 3-6 months of *true* living expenses in a place you can easily withdrawl from in the event that things turn for the worse.

Stocks don't count. You aren't guaranteed a sell (thin stock/illiquid stock) and you aren't guaranteed that the funds will be there (devaluation of the equity).

Protect yourself first, then think about going higher risk.
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words of wisdom! or perhaps experience? 😛
 
words of wisdom! or perhaps experience?
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Maybe a bit of both....

I moved to a different state and went nearly 3 months making about 1/4 of my previous income without having to lower my standard of living because of my "rainy day" fund.

I've since found employment at a higher income and am rebuilding that fund back up incase things go south for whatever reason.
 
The interest on your line of credit is deductable if you invest it in Canadian companies?
 
if you can make a diversified portfolio, the heck take advantage.

The TSX has been extremely strong since '03.
 
Only use margin if you know what you're doing. It doesn't sound like you do, so just stay away from that for now.

Have you started investing for retirement yet? The earlier you start the better. You also need a "rainy day fund" in case your income is reduced for any significant amount of time.
 
Originally posted by: everman
Only use margin if you know what you're doing. It doesn't sound like you do, so just stay away from that for now.

Have you started investing for retirement yet? The earlier you start the better. You also need a "rainy day fund" in case your income is reduced for any significant amount of time.
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Ya, def know what your doing, or at least get help from a financial advisor... tho I don't see how you could go wrong with an index fund.
 
Whether or not your loan interest is deductable, your business plan doesn't make sense.

Unless you can invest in interest only tools, and the interest is greater than what your lender gives you, you are taking a risk on the principal.

Your principal risk, if you are investing in stocks, is dependent on knowledge, experience and ability to time your purchases.

But since you probably have little knowledge and no experience, you're no better off an investor than anyone else, ie no better an idiot than most anyone else.

Don't invest money in individual stocks you can't afford to lose, and never invest or trade with 100% borrowed money unless there is no chance of being wrong...investing on margin is risky enough.

So if you make so much money and its not a big deal to risk it, then start saving, and the market will be around when you've built your investment fund. Not to mention it doesn't sound like you've been making that money very long, increasing the overall risk of your approach.

 
question: since interest on loans made for an investment is a writeoff, how much capital gains taxes do you pay on your profit, since you will have to outperform both of these to be net profitable.
 
buying on margin is a bad idea b/c you can easily owe way more than you can repay with your assets due to the variability of stocks. Inflation + interest on your loan will obviously not oughtweigh your return on conservative financial investments so it makes no sense either way IMO. Leave buying on margin + shelling short to the hedge funds.
 
Originally posted by: Ausm
Originally posted by: vi_edit
It's called a margin account.
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AKA Stupid unless you have quality inside Info and then you can do time like Martha did 🙂

Ausm
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I'm not actually suggesting it. It was more of a joke than anything else. Sorry if I didn't clarify. But even then, it's probably safer than a lot of cash accounts. At least with margin, you can't take a loan against non-marginable securities (penny stock, OTC & bulletin board stock). You just closed the door on a lot of thin an volitile stocks right there that you *could* buy in a cash account.

If my other posts haven't cleared things up, I think it's a really really bad idea to do something like this. I could see taking out a low(or no) interest loan to consolidate other higher interest loans (car, credit cards, student loans, ect) and paying off those interest charging accounts, but I think it is unwise to take a loan and dump it into stocks.

 
Just because the interest is tax deductible doesn't mean you're going to get all the interest back 😕

Me thinks you need to read up on how to do taxes.
 
i HAVE done this. its called a margin account.


and seriously unless you are god with stocks, this is a very BAD idea.
 
Originally posted by: ajpa123
Mortgage the farm and put it all into NNVC and HISC and get rich !

j/k 😛
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hahaha, I bought nnvc and hisc because I had like 1K in cash left in my money market accout I wanted to play with and nnvc is actually up 30¢
 
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