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Getting loan and investing - smart or stupid?

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Money Talk > Credit & Loans

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soybean
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Re: Getting loan and investing - smart or stupid?  Reply with quote  

quote:
Originally posted by Day Trader
What do you think about getting a loan from the bank in order to invest in a GROWTH related Mutual Fund with potentially above average returns?
I'm inclined to think you may need to lie to the bank about the purpose of such a loan, and that would be fraud.
Post Thu Jun 30, 2011 12:30 am
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misaelwade
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I think that getting loan and investment is an good idea. Some people who can't invest a huge money get benefit from loan.
Post Tue Jul 05, 2011 3:51 am
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soybean
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quote:
Originally posted by misaelwade
I think that getting loan and investment is an good idea. Some people who can't invest a huge money get benefit from loan.
This is a very risky proposition. The market is usually volatile in nature. Learning to invest well in amidst the volatility takes a major commitment of time and the ability to, indeed, learn it well enough to play the game without incurring significant losses. For a small investor, the time needed to learn about investing and closely watch the market is probably not time well spent. The smarter choice would be to focus on job and career to maximize your potential in your main field of work.

Keep in mind that, if using borrowed money to invest, you already have a burden to overcome; you need to earn more in the market than the interest you're paying on the borrowed money. If the typical inexperienced investor thinks they're smart enough accomplish this, they're probably deluding themselves.
Post Tue Jul 05, 2011 2:50 pm
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Zubin
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Nowadays so many companies are offering loan offers but it is better to follow some points at the time of choosing these offers like compare the financial institutions because terms and condition are different of every bank get brochures and Flyers for comparison purposes. Compare all the offers, and choose the company that offers combination of options that best matches your financial needs and your requirements.
Post Fri Jul 22, 2011 6:33 am
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jonymony
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Take loan is also important that the investor is aware of the terms of the loan secured by mutual funds. The lender may require that the loan will be repaid at any time. If the borrower has no cash available, the borrower must sell mutual funds, possibly at a loss to provide money to reduce debt.
Post Tue Jul 26, 2011 10:40 am
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kate032
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What is your plan for when the stock market tanks and you have a loan payment to make?

I've seen more people get in trouble by doing what you suggest. You should concentrate on earning the money first, then investing what you earn.
Post Fri Jul 29, 2011 5:26 am
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flipmoney2011
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Wish I could get a loan  Reply with quote  

Yea, that's a great idea. But, I think its illegal.
Post Fri Nov 18, 2011 5:08 pm
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oldguy
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quote:
Yea, that's a great idea. But, I think its illegal.


Expand - do you consider it illegal to borrow money to invest in stocks?
Post Fri Nov 18, 2011 5:49 pm
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flipmoney2011
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I think that it was outlawed because of the great depression. They used to let people borrow money to invest. But when the stocks went bad everyone lost their ass and they made borrowing to invest in stocks illegal. I could be wrong though.
Post Fri Nov 18, 2011 6:15 pm
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