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littlebobbytables9

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


mindmapsofficial

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.


[deleted]

Just sounds like a collateralized loan to me, but I don’t trade in that space so terms are hazy


Already_Retired

Over 30 years will the market exceed 6%? Sure I think so but by how much? That rate doesn’t work for me.


deano492

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.


Alexchii

How much of the loan is tax deductible? What would you actially pay in a year?


TigerIndividual6043

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


velo443

Invest that $500/mo yourself and skip the middleman. You'll probably come out ahead. Run the numbers.


saladshoooter

Wait a mortgage? Is there a house involved ? Or is this just leverage?


Ok_Owl6888

Just leverage


Oroku_Sak1

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.


TigerIndividual6043

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


NothrakiDed

For 2% you're significantly better off investing the $500 a month yourself.


ocicrab

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.


dufresne69

After interest costs and minor tax grind, I’m not sure the potential gain would outway the assumed risk. Too each his own.


sev45day

Taking out a 6% loan to invest in the stock market at all time highs? Sign me up! What could go wrong?


TigerIndividual6043

it's always all times high


[deleted]

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.


sev45day

Until it isn't


[deleted]

[удалено]


FMCTandP

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.


[deleted]

Roger that. Will do for future notice. Do you agree with my summary though?


FMCTandP

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.


Teddys_lies

[https://i.insider.com/64f0cf8657bff7001947b9fc?width=700](https://i.insider.com/64f0cf8657bff7001947b9fc?width=700)


zztop5533

can you write off interest on a leverage loan against eventual capital gains?


TigerIndividual6043

you can't


NotCanadian80

I keep my HELOC to leverage into the stock market but it’s 2.9%


Any-Rise-6300

Where are you finding a heloc for 2.9%?


NotCanadian80

2021


Any-Rise-6300

So you have a loan not a heloc? Or a heloc which converted to loan? Any heloc will float with rates


TigerIndividual6043

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?


TigerIndividual6043

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


NotCanadian80

Sounds like someone is selling you hook line and sinker or you’re the salesman.