I borrowed $42,000 to invest in XEQT using a Wealthsimple Portfolio Line of Credit (PLOC) — and after about two and a half months, here's exactly how it's going. 📈💰 In this video, I share an update on my ongoing experiment with borrowing to invest, including my current XEQT portfolio value of $42,362, approximately $362 in total returns from price appreciation and dividends, and roughly $300 in accrued interest so far. After accounting for the interest I've paid, am I actually ahead? Well, sort of! I explain how I went from borrowing $35,000 to $42,000, how much more I could potentially borrow based on my linked investment accounts, and why I'm being cautious about taking on additional debt. I'll break down my monthly interest costs, how XEQT's dividends contribute to the overall return, and how I plan to manage this portfolio going forward. Another important part of this strategy is the potential tax benefit for Canadian investors. When borrowed money is used to invest in eligible income-producing investments, the interest may be tax-deductible if CRA requirements are met. Based on my family's tax situation, I estimate that the potential tax benefit could offset some of the borrowing costs. I'll explain how this factors into my calculations, while keeping in mind that tax treatment depends on individual circumstances. I also discuss why I chose a Wealthsimple Portfolio Line of Credit instead of a margin account, the built-in borrowing limits that help me manage risk, and what could happen if the stock market takes a significant downturn while the debt remains outstanding. This $42,000 XEQT investment is an ongoing experiment that I'll continue documenting here on Moementum Finance. I'll share the returns, dividends, interest costs, potential tax benefits, market downturns, and ultimately whether borrowing to invest was worth the risk over the long term, for me. 💬 For those of you who have borrowed to invest, what is your main holding (stock or ETF) purchased with your borrowed money? Let me know in the comments! ⚠️ DISCLAIMER: This video is for educational and entertainment purposes only and reflects my personal experience. It is not financial, investment, tax, or legal advice. Borrowing to invest involves significant risk, including the possibility of losing money while still owing the full amount borrowed. Investment returns are not guaranteed, and interest deductibility depends on CRA requirements and individual circumstances. Do your own research and consult qualified professionals before making financial decisions. https://youtu.be/kbCg0PAwSIE
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9 Comments
Sumedh Kanao
@kanaosum · 20h
Great video @moementumfinance ! Love how you explain your cost of borrowing, returns and are very transparent.
Mitchell Muir@mitchell2025 · 7h
It’s awesome to see you doing well with this strategy and I like the idea of using margin for a “growth fund” lol my question to you is (I’m sure you answered this already lol) what is your strategy when it comes time to use your portfolio for expenses? Will you sell small portions of it when it comes time or use the distribution? Thank you for posting @moementumfinance and @karyungtom what term do you like to use when describing CAGE instead of calling it growth? I promise I’ll use that term on the next comment I make when describing XEQT 😂👍
Matt Gray
@matt.41 · 20h
Nothing flashy, slow and steady to that long term benefit. The interview with Ari was great. Saw it yesterday, a must see for anyone.
Gaurav Patel
@gau710 · 5h
Would a Wealthsimple line of credit qualify for tax benefits? I assumed only investment loans, such as a Manulife investment loan, might apply. Could you clarify the distinction between these two options?
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