Invest with borrowed money or don’t do it? The discussion has been raging for years and with every financial climate there are always supporters and opponents why you should or should not do that. False reasons are often invoked by both camps.
Now let’s see why in this period of extremely low interest rates you may or may not see it as an option to earn some extra money. But on the other hand, which bank would have enough faith in you to fund that stock market game of yours.
Proponents of investing
Often the proponents of investing with borrowed money are the parties who can earn something from you if you decide to do so. Low interest rates, low commissions, golden mountains are quickly promised.
Certainly now that the interest rate is so low and there is even a danger that you will have to pay to keep money in your savings account, many people have the option of investing. Whether this is done with saved money or borrowed money is actually less important than when you look at developments rationally.
Many companies are doing poorly and many are in financial trouble. Of course there are several solutions for investing, it does not necessarily have to be shares in a company.
Opponents are there too
The opponents will always argue that you are going to play a dangerous game, because it is by no means certain that the money that you are going to invest in anything will yield a return.
Especially in the short term, returns remain important if you do this with borrowed money, if you do this with savings, then you are not accountable to anyone and you can still serve a possible bad period. When investing with borrowed money, you have less room for this because the loan has to be repaid.
Invest in gold
Anyone who is at home in the gold market, or who is interested in it, of course knows Willem Middelkoop. He has specialized in the gold market and knows how to tell a lot about it. If you want to invest in gold then you better plan for the long term and better not for the short term. There is a chance that the gold price will fall for a longer period of time.
The advantage of investing in gold is that it always holds value and never goes bankrupt. Especially in these times of major turmoil at European banks (including Deutsche Bank and Italian banks) it is not unwise to convert part of your money into gold. It is even better to have physical gold at home so that you can always do your shopping in times of need.
Invest with borrowed money or not
Whether you should do it or not depends on your situation, if you think you have a chance with a modest amount you could consider it. However, it remains a perilous undertaking because nobody can look into the future, if you lose money then you will still have to repay the borrowed money.