On this Financially Focused clip, banker Mark Anderson helps you to decide if you should borrow money to buy stocks. Often times investors may choose to borrow money to buy stocks. This act of using margin to make investments is called Leverage. The use of leverage allows you to access a larger amount of money to make investment decisions. By being able to take larger positions in your portfolio it may allow you to make an even larger dollar return on your investment. Equally with leverage may also lose a large proportion of your assets as you would need to repay the borrowed money used to buy the stocks. Because you continue to have interest payments on the borrowed funds to pay you should ensure that you are able to sustain the repayment of the loan interest for a protracted period as you may need to hold a stock position for a prolonged time while waiting for the stocks to recover into profitability.
So in making the in the investment decision, it makes sense to borrow to buy stocks only if you have sufficient certainty that the stock will make you a return over and above the interest rate needed to pay on the loan. If you believe the stock might be too risky then maybe leverage might not be for you. So be wise in making those decisions and run the numbers.
Check out our workbooks to help you to multiply your money. Visit our shop here. https://financiallyfocusedmedia.com/shop/
Join our VIP Membership!!
Get information once reserved for high net worth clients
While working in the financial sector, I realized that some clients got favorable treatment and others did not. It was about having someone available to call you and say do this and do that. Or move your money here or ask for this opportunity. I realized that if I had that kind of mentorship, it could make a real difference to my life. Never would I have guessed that having a child with special needs would propel my need for financial mentorship so quickly. As I learned, I shared with my clients. And now I open this training for you.
