Alert:
Canada Post continues to operate, but with expected delays in delivery. Should a strike occur, Members must take steps to ensure that document delivery requirements prescribed under CIRO Rules continue to be met.
Borrowing to invest in Canada, often referred to as leveraging or margin investing, involves using borrowed funds to buy investments with the expectation of creating returns that are greater than the cost of borrowing. Make sure you understand how it works, including the interest rate, how interest is calculated, and any other risks and conditions associated with the arrangement.
The primary risk of taking out a loan to invest is the potential for significant loss. In the worst case, you can be forced to declare personal bankruptcy.
Here are some risks and factors that you should consider before borrowing to invest:
Borrowing money to invest is risky. You should only consider borrowing to invest if:
You should not borrow to invest if:
You should also think about factors such as:
HAS YOUR ADVISOR:
HAVE YOU:
Although it’s tempting to believe an investment will pay back the loan and even cover interest payments, in reality, there is no sure thing.
It’s very important to seek professional financial advice and develop a well-thought-out plan before considering this approach, as it’s not suitable for everyone and can lead to unfavorable financial consequences. If you are using, or intend to invest with borrowed funds, it’s crucial to let your financial advisor know. Whether a bank loan, a line of credit or another type of third-party investment loan, borrowing can affect your overall financial circumstances and your ability to meet your financial goals.
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