With interest rates near all time lows, investors are not only enticed out of cash and bonds into riskier assets like stocks, commodities and crypto, they can also be tempted to borrow money for those investments to magnify returns. Whether using a brokerage margin account (my broker currently charges between 6.575% - 8.325% depending how much you borrow), home equity loan (I have seen 3% - 5% if you have good credit), or personal loan (6% - 36%, depending on your credit), there are many ways that people can borrow money for investing. While the returns can be infinite using borrowed money and also sizable, especially if the asset you invest in goes up dramatically (crypto such as Bitcoin or Etherium, or meme stocks such as
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Avoiding Leverage
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With interest rates near all time lows, investors are not only enticed out of cash and bonds into riskier assets like stocks, commodities and crypto, they can also be tempted to borrow money for those investments to magnify returns. Whether using a brokerage margin account (my broker currently charges between 6.575% - 8.325% depending how much you borrow), home equity loan (I have seen 3% - 5% if you have good credit), or personal loan (6% - 36%, depending on your credit), there are many ways that people can borrow money for investing. While the returns can be infinite using borrowed money and also sizable, especially if the asset you invest in goes up dramatically (crypto such as Bitcoin or Etherium, or meme stocks such as