20 year old portfolio (do I have too much margin?)
I have around 115k invested with my own money and have a 45k loan @ 4.45% interest. I don’t do options or day trading with said loan I do swing trades which has I’ve had 23 successfully ones and 2 wrong ones which hit my stop loss of -500$. Is it okay to keep such high margin? I make good money around 100k a year which is 65% of my wage (apprenticeship) so I could just add money in, in case of an emergency.
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6 Comments
Brandon @investor_red · 2dEdited
I'm assuming that you have such a high margin due to linking your TFSA to your margin account. If this is the case, you need to be very careful using 45k of margin because it you hit a margin call, WEALTHSIMLPE will request cash immediately and if you cant afford it, good bye to your investments in both your margin and tfsa as they will be sold *****without***** your permission to cover the debt because you've already consented when you linked the account. WEALTHSIMPLE could also freeze your margin account until you fund it meaning you cant buy or sell stocks or day trade. Recommendation, don't use anymore margin, use the dividends to bring margin down. Avoid day trading. Other than that, good luck! Your account needs to generate $166.88 Dollars in dividends a month to cover the 4.45% interest rate. it will cost you $2002.50 yearly at that 45K loan. After that, reinvest the rest of the dividends. That will run you issues with contribution rooms with the TFSA among other issues.
Kevin W@kwang1993 · 3d
time is your enemy. but who knows maybe you'll get rich quick!
Beevis @beevis · 4d
Thanks for sharing Logan! Here's my feedback: 1. ⚠️ Reassess how much you borrow to invest 2. 🛟 Strengthen your emergency cushion outside the portfolio 3. 📊 Make your tech and single-stock risk a conscious choice Including my full thoughts below, shoot me a message if you wanna chat about it!
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