about the only thing I can think of that would be stupider is taking out a home equity loan to fund your trading account
most likely he'll end up with a zero balance in his trading account and a maxed out credit card at 18% which will take years to pay off. Plus, he now has no emergency money which is the only time anybody should borrow on a credit card.
Happened a lot back in the late 90's. Very few of those people lasted long.
On another note, I know a guy who borrowed 35k from credit cards to trade in the mid 90's. He is one of the very few who made money right away. He still trades for a living.
I think it all depends on how good you are. And how crazy you are.
Anyone who can read realizes my recommendation is to not risk the 10k but rather to take down the money and use a small bit at a time to expand on his current winning methodology. If he is going out to shoot the moon and gamble with 10K he is an idiot.
I don't think the man is an idiot.
Anyone who can read realizes my recommendation is to not risk the 10k but rather to take down the money and use a small bit at a time to expand on his current winning methodology. If he is going out to shoot the moon and gamble with 10K he is an idiot.
I don't think the man is an idiot.
ok, the simple answer is, if you can consistently make more money trading than they are charging you to borrow it, then yes, you should borrow as much as possible.Thanks for the comments, guys. Appreciate the input, positive or negative.
Already borrowed $3000. My rule with credit cards is this: I will always maintain a utility ratio of less than 30%. This leaves me with another $9000 available to borrow before I hit the 30%. Lots of room left for emergencies even if I borrow another $9000. However, future borrowing has the interest free option only available until the end of June.
Assuming the additional size does not rattle him and he remains profitable he should certainly reinvest rather than pay down debt with a 1% coupon. As the rate goes up he should reevaluate as some of these offers go from 1% to 24% and more. No profitable trader should turn down 1% money ... ever!!
yeah, that's cool as long as you are profitable, and I hope you are. What happens when you go in the deep drawdown (and we all do)?Its actually 0% money. The cash back on my credit card pays the 1% fee. My Job/business requires me to spend about $5000 per week all refunded in cash by Wednesday of the following week. I am awarded a 1% cash back on the purchases. So, I do the job related purchases, take the cash, deposit it in my trading account and then transfer the balance to the 0% balance transfer card.
So, I keep my savings in reserve, hopefully earning some investment return, while trading the credit card loan free of charge. If I am profitable, all profits go towards paying off the loan.