12-19-2022, 09:48 AM
Opinions on borrowing money to invest in the stock market?
<!-- SC_OFF --><div class="md"><p>I've heard in the past that it's not smart to borrow money or take out a loan and invest it into the Stock Market.</p> <p>In the past I would take out $10,000-$20,000 loans that ran for ~5 years at an interest rate anywhere from 7%-9%.</p> <p>Yes I know that ultimately I shouldn't be doing that. Fortunately I got really lucky and placed them into very good blue chip companies before deciding to just withdraw it all and then just dump everything into an S&P500 index fund.</p> <p>There is another interesting thing about this strategy that I wanted to point out. That even though the interest rates were high at 7%-9%, and the loans were for about 5 years, I would pay them all off within less than a year like anywhere from 6months-8months. So I didn't have to pay much interest on the loan due to paying it off so quickly. My goal was to simply take a large lump sum and quickly put it all into the market. Basically "time in the market" >>> all else. It would have taken me considerably longer to wait to accumulate $20,000 with my bi-weekly pay checks.</p> <p>For future reference I don't plan to do this anymore, but I would like to hear people's thoughts on this?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/toss_it_o_u_t"> /u/toss_it_o_u_t </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/zp6j3r/opinions_on_borrowing_money_to_invest_in_the/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/zp6j3r/opinions_on_borrowing_money_to_invest_in_the/">[comments]</a></span>
<!-- SC_OFF --><div class="md"><p>I've heard in the past that it's not smart to borrow money or take out a loan and invest it into the Stock Market.</p> <p>In the past I would take out $10,000-$20,000 loans that ran for ~5 years at an interest rate anywhere from 7%-9%.</p> <p>Yes I know that ultimately I shouldn't be doing that. Fortunately I got really lucky and placed them into very good blue chip companies before deciding to just withdraw it all and then just dump everything into an S&P500 index fund.</p> <p>There is another interesting thing about this strategy that I wanted to point out. That even though the interest rates were high at 7%-9%, and the loans were for about 5 years, I would pay them all off within less than a year like anywhere from 6months-8months. So I didn't have to pay much interest on the loan due to paying it off so quickly. My goal was to simply take a large lump sum and quickly put it all into the market. Basically "time in the market" >>> all else. It would have taken me considerably longer to wait to accumulate $20,000 with my bi-weekly pay checks.</p> <p>For future reference I don't plan to do this anymore, but I would like to hear people's thoughts on this?</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/toss_it_o_u_t"> /u/toss_it_o_u_t </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/zp6j3r/opinions_on_borrowing_money_to_invest_in_the/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/zp6j3r/opinions_on_borrowing_money_to_invest_in_the/">[comments]</a></span>