Risk of Investing Through a Loan

[nomad]

One of the common ways to start investing, when you do not have your own investment funds, is through a bank loan. YOu can get a personal loan from banks and use the money to make an investment in various markets. You are basically doing this because you believe your return on investment will be higher than the money you will be paying to the bank as interest on the loan . What if the rate of return is lower than the interest you are paying against your loan?

 

[Springtime]

I never considered borrowing money to make investments. Every investment involves risks. Borrowing money to invest sounds too risky to me. I just invest what I can afford. Even if I make a loss, I do not have to worry about debts.

 

[Bisolami]

I never considered borrowing money to make investments. Every investment involves risks. Borrowing money to invest sounds too risky to me. I just invest what I can afford. Even if I make a loss, I do not have to worry about debts.

I have thought about something like this sometime ago but I realised that it was not a good idea at all and I am glad that I did not even make use of that idea from the start

 

[Hate2Wait]

Its a bad idea and I don't see it as a good option to invest with borrowed funds and what will happen if it does not work and start yielding losses

 

[cherry123]

I don't just like the idea of borrowing money to make any kind of investments. I know that investment comes with it's own risks. Borrowing money to invest is no such a good idea

 

[Bisolami]

Its a bad idea and I don't see it as a good option to invest with borrowed funds and what will happen if it does not work and start yielding losses

It is very important for us to think about what will happen to the loan if it will yield profit or not because it does not make sense to take a loan for investment and the loan will go wrong

 

[cherry123]

Yes the whole idea is a bad one and It can never be a good option to invest with borrowed funds. The problem is that it might not work well

 

[Passiveearner]

Yes the whole idea is a bad one and It can never be a good option to invest with borrowed funds. The problem is that it might not work well

There are many people who destroyed their life after borrowing loans. They had to sell their assets in order to pay the loan back and also pay interest money. This is why borrowing money and paying interest for that is a really bad idea.

 

[cherry123]

You are right this is why it is not good to borrow money you might just be destroying your life in the process after borrowing loans. Using personal funds is better

 

[Bisolami]

There are many people who destroyed their life after borrowing loans. They had to sell their assets in order to pay the loan back and also pay interest money. This is why borrowing money and paying interest for that is a really bad idea.

I cannot even advise someone to take a loan especially when the person does not know how to manage money or does not have something reasonable he wants to take the loan for

 

[eldavis]

One thing i would never do is to risk making an investment with loan. There is no assurance that the business or investment would go the way i want it to.

 

[Bisolami]

One thing i would never do is to risk making an investment with loan. There is no assurance that the business or investment would go the way i want it to.

It does not even sound well to take a loan just because you want to invest. What happened to your savings? It is not even a reasonable thing to do at all. I cannot do it

 

[fcbetting]

If you will start your own business I would approve it but with some advices. But if you have plans buy stocks or crypto as investment from loan money, I would say that is worst idea.

 

[Bisolami]

If you will start your own business I would approve it but with some advices. But if you have plans buy stocks or crypto as investment from loan money, I would say that is worst idea.

I think I love the fact that everyone of us realise that taking a loan for an investment is a bad idea so that people who do not have such idea will not fall into something like that

 

[fcbetting]

If you need money from loan it means you don not have that money. Main rule in all invest business like stocks or crypto is don't invest if you can't afford lose it.

 

[Bisolami]

If you need money from loan it means you don not have that money. Main rule in all invest business like stocks or crypto is don't invest if you can't afford lose it.

I think a lot of people need to be warned about investing in cryptocurrency. This is because cryptocurrency is volatile and it may be risky for you to take a loan to invest in such a business

 

[Suba]

Investments should be with idle money, not money for daily needs, let alone borrowing from banks, even though investing with debt is often done by professional investors, but they do not borrow from banks, they (investors) can take advantage of both downtrend and uptrend moments , especially in high-risk investment instruments.

 

[Bisolami]

Investments should be with idle money, not money for daily needs, let alone borrowing from banks, even though investing with debt is often done by professional investors, but they do not borrow from banks, they (investors) can take advantage of both downtrend and uptrend moments , especially in high-risk investment instruments.

The only money that should be used for investments is the one that you have no plans for. If you have any plans for any money, it is better not to use it to invest.

 

[Suba]

The only money that should be used for investments is the one that you have no plans for. If you have any plans for any money, it is better not to use it to invest.

The investment principles that you describe will be more suitable for me as a layman, but not for expert investors, they can recognize the market is going up or down so they can take profits by borrowing money.

 

[cherry123]

One should be careful when it comes to using loan for anything, it is advisable to take a loan especially when the person want to invest the money or to manage money it