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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40 Comments
Rabid Money Badger @riggs · 6h
Currently doing it through margin account. Wish I had learned about it when I was a lot younger.
Phil @diversifiedfill · 5h
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.
CAPS LOCK ON @theanonymousinvestor · 5h
USING BORROWED MONEY TO INVEST JUST DOESN'T FEEL RIGHT FOR ME
Rez @rezola · 2h
I've been doing this since 2023 using a mix of everything (except CC etfs) although its not tax deductible. Cashed out some gains this year to make an RRSP contribution which helped offset both my income and capital gains. That said I see the growing popularity of leverage as a potential warning sign of bubble forming so I think it's something that should be approached cautiously.
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