Happened a lot back in the late 90's. Very few of those people lasted long. On another note, I know a guy who borrowed 35k from credit cards to trade in the mid 90's. He is one of the very few who made money right away. He still trades for a living. I think it all depends on how good you are. And how crazy you are.
Thanks for the comments, guys. Appreciate the input, positive or negative. Already borrowed $3000. My rule with credit cards is this: I will always maintain a utility ratio of less than 30%. This leaves me with another $9000 available to borrow before I hit the 30%. Lots of room left for emergencies even if I borrow another $9000. However, future borrowing has the interest free option only available until the end of June.
I've been trading in a small way for a few years with a mini account of only about $2000. Scalping the profits off, Ive been funding my daughter's education savings plan, accumulating almost $9,000. I'm obviously not willing to trade the $9000. That's for my baby. It is invested for the long term, about 16 years from now when she goes to university. I'm not a big risk taker. I just grind away at it, but it's time to add a bit more to this project of mine.
Anyone who can read realizes my recommendation is to not risk the 10k but rather to take down the money and use a small bit at a time to expand on his current winning methodology. If he is going out to shoot the moon and gamble with 10K he is an idiot. I don't think the man is an idiot.
Thanks. Yes, I'm not an idiot though I'm sure there are a few ET members who think I am. You are quite right shooting for the moon with the full $10,000 would be insane. I will not do this. My strategy assumes periodic blow outs. Therefore the trading account only contains a fraction of my available funds. A question for some of you who are against borrowing ( theoretical numbers) $10,000 of credit card debt + $10,000 of cash for a total of $20,000 of available funds, OR $10,000 cash and no debt? You are better not to trade your savings. Trade credit card debt and leave your savings intact. Why do you this is true?
ok, the simple answer is, if you can consistently make more money trading than they are charging you to borrow it, then yes, you should borrow as much as possible. I would really like it a lot more if you asked if you should use your trading profits to pay off your loans or reinvest it.
Assuming the additional size does not rattle him and he remains profitable he should certainly reinvest rather than pay down debt with a 1% coupon. As the rate goes up he should reevaluate as some of these offers go from 1% to 24% and more. No profitable trader should turn down 1% money ... ever!!
Its actually 0% money. The cash back on my credit card pays the 1% fee. My Job/business requires me to spend about $5000 per week all refunded in cash by Wednesday of the following week. I am awarded a 1% cash back on the purchases. So, I do the job related purchases, take the cash, deposit it in my trading account and then transfer the balance to the 0% balance transfer card. So, I keep my savings in reserve, hopefully earning some investment return, while trading the credit card loan free of charge. If I am profitable, all profits go towards paying off the loan. If only credit card offers like this were more plentiful. You could rotate these loans indefinitely, adding a few percentage points to an investment return in an account designed for long term investments. With discipline, risk is minimal. I understand this looks like scheming, but my disciplined credit card usage has already increased my business income by about 13% through the cash backs.
Funny that Jesse Livermore always repaid his debt as soon as he could. He was in large part consistently profitable. Perhaps he understood more than anyone else about debt when he shot his brains out - the game is over when you are in debt. He understood the nature of the game, while most would regard gambling against the banks as a business, as an investment.
yeah, that's cool as long as you are profitable, and I hope you are. What happens when you go in the deep drawdown (and we all do)?