Do you (or someone you know) borrows money from the bank to invest?

Discussion in 'Trading' started by crgarcia, Jan 23, 2008.

  1. It's ill advised. Certainly I would never do it, but I want to know if someone borrowed here.

    I knew (fast friends) some very rich guys who borrowed long term, making some easy money with buy and hold.
    Of course during bear markets their accounts go down a bit, but they still withdraw to pay interests.

    I guess they dont use much leverage.
    Also I don't have the easy/cheap credit they have.
  2. A few years ago, John Templeton said that he borrowed money from the Japanese to invest.
  3. dtan1e


    i do that sometimes when the interest rate on offer is low compared to what i can make from the mkt
  4. da-net


    i had given some thought to it, but just don't need it.

    one way of doing it @ zero % interest for about 15 to 18 months would be to borrow money on a current credit card and then transfer the total balance to another card that offers zero % interest for the greatest amount of time
  5. just21


    Portfolio margin let's you invest six times your deposit borrowing from the broker.
  6. Theres usually no grace period on cash, so you'd have to transfer immediately- Plus the maximum you can take is usually some ridiculously low number. Otherwise everyone would be taking out personal loans at 0% interest on their credit cards. What a nightmare.
  7. apply for 0% card,get 20K limit go buy 20 1K gift cards,cash it the next day you have 20K regular credit card debt at 0% for 12 to 18 months and 20K in your pocket to invest.

    At least that is how it was done when I was :D :D :D :D
  8. da-net


    you would have to make monthly payments, but if you could take them from trading profits..well

    as to the ridiculously low amount, that depends on what you call a ridiculously low number, plus it would be more a function of your relationship with your CC issuer and your limits..the ones i deal with would allow me to max out my CCs in a "check withdrawal" that could be deposited in my bank account In fact i get checks from them every couple weeks offering zero % for 1 year, but i destroy them...

    as an example if you had mid 5 figures or low 6 figures available you could write a check withdrawal on, it would probably incur charges of $100 to $150, but that would be negligible imo for someone that wants to do it

    dangerous, yes! but if someone wanted to do it...this could be a way
  9. Go buy a new truck for 50k drive it off the lot and lose 10k the first day. No one bats an eye on that loss.

    Hell yea, I borrowed money to put in the market and would do it again. I'd recommend it to anyone, just have a money management plan.
  10. cszulc


    I do borrow from 0% credit cards (through what are called App-O-Ramas, check out for more info). I have about $70,000 out right now, with about $60,000 of that in a 4.75% INSURED savings account. $10,000 of it is used on margin for futures trading (ag spreads).

    If anyone does put 0% money in the market, have a risk plan for it and be willing to get out when it hits a certain amount. I have a younger friend going through college who had excellent credit, borrowed $35,000~ on 0% for 12 months, lost about $25k of it, and is paying the rest back at interest rates between 12-16%. Do not mess up on them or you will pay huge amounts!
    #10     Jan 23, 2008