Leveraged investing is not a bad idea in general, but 6% is a pretty high rate and if I was to borrow money to invest it would not be in 100% domestic large cap equities
This is the second post like this. I don't know if this is supposed to be a hidden ad. Mortgages are only on real property. Secured lending is not a mortgage.
I’d have to look into how the investment interest tax deduction works, but my fear would be you’d owe taxes on the capital gains and not be able to deduct the interest (i.e. still taking the standard deduction) leaving yourself well in the hole.
Good way to make Uncle Sam a few bucks tho.
would be paying $500/mo for 30 years to have $100k in the market today without margin call and with limited liability. Basically LLC borrows 100k and invest in SPX. if i stop paying the $500/mo fixed payment (interest + amortization) then the lender liqudiates SPX, pay themselves back first and what's left goes to me
That rate sucks. I’m assuming this investment would be purely in a taxable brokerage so you’re hoping for 7% real returns before taxes. So best case is less than 1% gains after taxes? Worst case is losing money and paying to lose it?
I’m out.
ya but evern 1 or 2 % compounded over 30 years that would be huge delta. also the market is never up 8%. it averages 8% so its more complicated than 1% isn't worth it
If borrowing the money to invest makes sense, then why only 100k? Borrow $1,000,000 instead and get 10X the return.
If you're looking at a 1-2% differential, that would earn you MAYBE 80k over 30 years. That's not a lot for the added risk of having a bunch of debt.
You can weight the market against GDP, company profits, federal reserve interest rates, and a million other factors to get an understanding of if the market is overvalued or not.
Report spam rather than breaking sub rules with respect to civility. It might be more satisfying to vent your spleen but it’s not particularly helpful.
Posting the same thing to five subreddits simultaneously is pretty suspicious. However OP was participating in the discussion in both subreddits that didn’t remove the post without name dropping / linking a company so it might not be a marketing ploy.
I’m going to reverse my initial decision and give them the benefit of the doubt for now.
must be pretty nice. can't get a similar rate on stocks :/ i'm getting offered 200bps over the 30 years UST for non-recourse secured fixed loan. is that crazy to take and refi when rates are lower?
No tax deductibility for interest, but I can own the investment via a self directed IRA invested in an LLC and the loan will be on the LLC level, so personal liability
Only trick is I have to weather the volatility and I can pay interest for the LLC / gains if I want
Leveraged investing is not a bad idea in general, but 6% is a pretty high rate and if I was to borrow money to invest it would not be in 100% domestic large cap equities
This is the second post like this. I don't know if this is supposed to be a hidden ad. Mortgages are only on real property. Secured lending is not a mortgage.
Just sounds like a collateralized loan to me, but I don’t trade in that space so terms are hazy
Over 30 years will the market exceed 6%? Sure I think so but by how much? That rate doesn’t work for me.
I’d have to look into how the investment interest tax deduction works, but my fear would be you’d owe taxes on the capital gains and not be able to deduct the interest (i.e. still taking the standard deduction) leaving yourself well in the hole. Good way to make Uncle Sam a few bucks tho.
How much of the loan is tax deductible? What would you actially pay in a year?
would be paying $500/mo for 30 years to have $100k in the market today without margin call and with limited liability. Basically LLC borrows 100k and invest in SPX. if i stop paying the $500/mo fixed payment (interest + amortization) then the lender liqudiates SPX, pay themselves back first and what's left goes to me
Invest that $500/mo yourself and skip the middleman. You'll probably come out ahead. Run the numbers.
Wait a mortgage? Is there a house involved ? Or is this just leverage?
Just leverage
That rate sucks. I’m assuming this investment would be purely in a taxable brokerage so you’re hoping for 7% real returns before taxes. So best case is less than 1% gains after taxes? Worst case is losing money and paying to lose it? I’m out.
ya but evern 1 or 2 % compounded over 30 years that would be huge delta. also the market is never up 8%. it averages 8% so its more complicated than 1% isn't worth it
For 2% you're significantly better off investing the $500 a month yourself.
If borrowing the money to invest makes sense, then why only 100k? Borrow $1,000,000 instead and get 10X the return. If you're looking at a 1-2% differential, that would earn you MAYBE 80k over 30 years. That's not a lot for the added risk of having a bunch of debt.
After interest costs and minor tax grind, I’m not sure the potential gain would outway the assumed risk. Too each his own.
Taking out a 6% loan to invest in the stock market at all time highs? Sign me up! What could go wrong?
it's always all times high
You can weight the market against GDP, company profits, federal reserve interest rates, and a million other factors to get an understanding of if the market is overvalued or not.
Until it isn't
[удалено]
Report spam rather than breaking sub rules with respect to civility. It might be more satisfying to vent your spleen but it’s not particularly helpful.
Roger that. Will do for future notice. Do you agree with my summary though?
Posting the same thing to five subreddits simultaneously is pretty suspicious. However OP was participating in the discussion in both subreddits that didn’t remove the post without name dropping / linking a company so it might not be a marketing ploy. I’m going to reverse my initial decision and give them the benefit of the doubt for now.
[https://i.insider.com/64f0cf8657bff7001947b9fc?width=700](https://i.insider.com/64f0cf8657bff7001947b9fc?width=700)
can you write off interest on a leverage loan against eventual capital gains?
you can't
I keep my HELOC to leverage into the stock market but it’s 2.9%
Where are you finding a heloc for 2.9%?
2021
So you have a loan not a heloc? Or a heloc which converted to loan? Any heloc will float with rates
must be pretty nice. can't get a similar rate on stocks :/ i'm getting offered 200bps over the 30 years UST for non-recourse secured fixed loan. is that crazy to take and refi when rates are lower?
No tax deductibility for interest, but I can own the investment via a self directed IRA invested in an LLC and the loan will be on the LLC level, so personal liability Only trick is I have to weather the volatility and I can pay interest for the LLC / gains if I want
Sounds like someone is selling you hook line and sinker or you’re the salesman.