Using Margin account as short term loan

stphnstevey

Realise majority are against borrowing to invest

However others use mortgage or Credit Card loans successfully to stooze in high interest bank accounts. Also some take larger risks and invest this money

I didn't want to debate whether this is a good idea or not, as most that do this have already made up their mind. If you don't agree, fine, don't do it and leave everyone to make up their own mind

However, looking at margin accounts, old news I know, but could this be a consideration?

https://financefeeds.com/borrow-money-from-interactive-brokers-at-tiny-interest-whilst-you-trade-for-profit-exclusive-interview-from-greenwich-on-the-companys-new-solution/

So borrow at 1.5%, buy dividend stock at 1.5% yield which pays for margin loan, take any increase in share value as profit?

Chino

I find your post confusing.

You start by saying:

stphnstevey wrote: »

I didn't want to debate whether this is a good idea or not, as most that do this have already made up their mind. If you don't agree, fine, don't do it and leave everyone to make up their own mind

But, having started by saying that you don't want to hear people's opinions about this scheme, a couple of lines later that's exactly what you ask for:

stphnstevey wrote: »

However, looking at margin accounts, old news I know, but could this be a consideration

So do you want people's opinions about this scheme or not? If not, what are you asking for?

For what's it's worth, I think you should dive in and come back in a year's time to let us know how it went for you.

P.S. You might want to bookmark this URL: https://forums.moneysavingexpert.com/forumdisplay.php?f=76

stphnstevey

Chino wrote: »

I find your post confusing.

You start by saying:

But, having started by saying that you don't want to hear people's opinions about this scheme, a couple of lines later that's exactly what you ask for:

So do you want people's opinions about this scheme or not? If not, what are you asking for?

For what's it's worth, I think you should dive in and come back in a year's time to let us know how it went for you.

P.S. You might want to bookmark this URL: https://forums.moneysavingexpert.com/forumdisplay.php?f=76

Don't want to debate whether borrowing to invest is a good idea, but if you were too borrow to invest, this seems like a fairly good way

DrSyn

"There's no such thing as a free lunch"

What happens if the company
(a) cannot pay any dividend?
(b) value falls to half what you bought it for?
(c) fails all together?

You can be certain the people that came up with this idea will have made sure that if anyone is going to get burnt it will not be them!

londoninvestor

It looks like IB only offers margin loans to residents of the US, Canada and Hong Kong:
https://www.interactivebrokers.com/en/index.php?f=24176

(scroll down to the "Margin Requirements" here).

Not sure which providers do it in the UK. I would think private banks do, but they probably want you to do it in large size.

stphnstevey

londoninvestor wrote: »

It looks like IB only offers margin loans to residents of the US, Canada and Hong Kong:
https://www.interactivebrokers.com/en/index.php?f=24176

(scroll down to the "Margin Requirements" here).

Not sure which providers do it in the UK. I would think private banks do, but they probably want you to do it in large size.

Appears on UK website version and also on GBP currency
https://www.interactivebrokers.co.uk/en/index.php?f=1595

Also I think DeGiro offer about 1.5% on euro margin loans