I borrowed $35,000 to invest in XEQT using a Wealthsimple Portfolio Line of Credit (PLOC) — and after about one month, here's exactly how it's going. 📈💰 In this video, I share my real experience with borrowing to invest, including my current XEQT return of +1.85%, approximately $92 in accrued interest, and my plan to pay the accrued interest at the beginning of every month. I also break down what my estimated ~$120 monthly interest cost could look like if I keep the full $35,000 borrowed. But this isn't a video about saying that borrowing to invest is a good idea for everyone. Quite the opposite.🙂 I talk about the risks of using leverage, what happens when markets fall while your debt remains, how a Portfolio Line of Credit works, how borrowing limits are calculated, and why having a long time horizon, strong cash flow, and a high tolerance for risk is so important. I also discuss one potential advantage for Canadian investors: the possibility of deducting investment-loan interest for tax purposes when CRA requirements are met. Tax deductibility depends on how the borrowed funds are used and other CRA rules, so always consult a qualified tax professional about your own situation. My $35K PLOC investment is essentially an ongoing experiment that I'll be documenting on Moementum Finance. I'll share the good, the bad, the interest costs, the market downturns, and ultimately whether borrowing to invest was worth the risk. ⚠️ DISCLAIMER: This video is for educational and entertainment purposes only and is based on 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 borrowed amount. Do your own research and consult a qualified professional before making financial decisions. 💬 I'd love to hear from you: Would you ever borrow through a Portfolio Line of Credit or a Margin account to invest in the stock market — or is the risk simply not worth it for you? https://youtu.be/wYpIrbwtJ5k
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82 Comments
Rabid Money Badger @riggs · 11d
Currently doing it through margin account. Wish I had learned about it when I was a lot younger.
CAPS LOCK ON @theanonymousinvestor · 11d
USING BORROWED MONEY TO INVEST JUST DOESN'T FEEL RIGHT FOR ME
Bijan St Juste@splashketchum · 11d
Using my margin to generate passive income... repaying interest with my dividends....remaining profits gets funneled into Growth.
Phil @diversifiedfill · 11d
I have only done it a couple times in my life, only when overnight interest rates were slammed down to 0.25% AND the stock market crashed. Last time was after the covid crash. Borrowed about 120K to plow into the markets on almost entirely preferred shares. That entire 120K was paid off before interest rates started to be hiked up. Took me a couple years to completely discharge the debt, I think.
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