/biz/ - Business & Finance

Do you think it'll pay dividends above 6.5% once franked?

Not fucking likely. This isn't even margin lending this is dead set retarded

>>639086
Too late, already got the loan. Though some will be used to pay off credit card debt.

>>639093

Stop.

Stop doing this to your personal economy.

Paying a loan with a loan is the beginning of an endless spiral of debt.

Stop.

>>639096
The interest rate was crazy low. S&P should be up 10 percent by year end.

>>639093
>>639083
So you got a loan with 6.5 apr and some of it is going to paying off credit cards. You got credit to pay off credit.

In reality then how much of the loan is unspent money? This will show you what your need to beat in growth to pay off the loan.

Math is (APR*Total Loan)/(Unspent Loan)=Actual APR

6.5% is already pretty hard to beat the market with. But if you spent more than 45% of the loan, you are going to be entering the /biz/ favorite "Can I beat the market average?"

The answer is yes, but you need to actively manage your money. No index fund is going to grow probably at the rate you need it to.

>>639102
3k to pay off credit card debt and 5k to go in index funds.

>>639083
no. you're dumb as hell. this is like what people did in the 1920s and 1990s which resulted in the 2 biggest stock bubbles popping. you do realize you're already in the hole right? if the return for the year is anything less than 6.5% then you auto lose. if s&p returns 16.5% you could make 10%, if it goes down 5%, you lose 11.5%. your risk/reward is way fucking off.

>>639093
....you already had the loan...paying off the debt may/may not be a good idea depending on circumstances but the index fund is an awful idea.

>>639110
But then it is only a paper loss. I'm not going to sell the index funds.

Also the monthly payment is $350 a month, which I have no trouble paying.

>>639106
6.5*8000/5000=10.4

That means you need the fund to beat 10.4% or you will lose money this year.
Even if the index fund grows by 10.4% there are loading fees and other factors that may drop you below that hard stop limit of 10.4%. Also you are getting in a month late so that is a month less of growth for this year.

I would say spend this weekend learning how to actively manage your portfolio for growth and try to grow by .7% a month by doing some active trades, maybe options.

And never use credit to pay for credit again.

>>639114
I agree, though the s&p is flat for January.

If I went active, then I would buy ExxonMobil, though I decided against that last night. Too much effort.

>>639113
bro, this is a textbook case of how to lose money. please don't do it.

>>639121
If I could get a million dollars of these loans, then I could retire right now!

A year from now I'll have a 800 credit score and the haters gonna hate.

>>639124
have a nice one. :)

>>639124
Good luck man. Sounds like you already had your mind made before posting about it.

>>639149
Yeah, I know that is common for most people. Guess I wanted someone else to bring up something I didn't think of.

Using the personal loan to pay of credit card debt was probably a good idea since the personal loan with almost absolute certainty, has a lower interest rate. I'd rather be paying 6.5% than 15%+ on a credit card.

Since OP seems to have already gotten the loan and probably stuck it in the S&P, he should probably do a covered call or collar to mitigate risk.

>>639160
Why is good to get a loan to pay off debt, but bad to get one to invest?

Also no I don't play options.

>>639162
>Why is good to get a loan to pay off debt
It's not always good. It's only good if you're getting a better interest rate, lower monthly payments, more flexible terms, or something like that out of it. Generally speaking, lower interest rates are the only reason why the average person should consider consolidating a loan like that.

> but bad to get one to invest?
You're taking on additional risk when you invest. There is literally no guarantee that you will make enough off of the investment to cover the interest expense. If you don't, you're losing money. It would only make sense if the interest rate is easy to beat such as professional traders borrowing at ~0.5%-1.5%.

>Also no I don't play options.
Enjoy your fully open risk then.

>>639171
Man I love this shit. Wish I could play around all day with the market, but my stable 9 to 5 beckons.

Similar boat OP. I just got approved for a 15k loc for 4.84%. I have 0 debt so I'm not planning on using it. I may however take like $500 out, do nothing with it pay the interest and then repay it to increase my credit rating.
I was thinking about putting it in an index fund as they've historically done really well as the one I'd put my money in is up 12% in like 3 months but I have a lot of cash sitting around because I don't like the market right now so if I wouldn't put my cash in I sure as hell wouldn't use my loc.

>>639177
Why not put a third in the market? With that rate you can make money in anything. But ExxonMobil.

>>639181
I have $3,400 sitting idle because I'm waiting for a pullback on a few index funds. I missed the last cycle drop so I'm holding off till the next one. Right now I'm diversifying some of my risk away with broad index funds but obviously don't want to jump in near the top, I want to wait till it drops significantly before I add in.

>>639185
Yeah I understand. Everyone keeps saying we haven't had a 10 percent drop in three years for the s&p. But my feelings are the oil is close to a low and once it recovers the weakest sector energy will be good. So what is bad?

>>639194
No
>>639083 is

>>639193
Just a whole bunch of macro issues. We've had a few really good opportunities in the past few months. It was extremely volatile and had a few good times to establish a long underlying position. Firstly when the whole embargo on Russia happened, then there were a few issues with Asian markets not producing as much as people expected which correlates everyone pretty well as Asia is the most significant source of a lot of products and services for the world, then the oil thing caused a lot of funds to have to deleverage their oil holdings causing them to sell off a lot of funds which lead to a decrease for a while. Really the US economy is surprisingly one of the only ones that is remotely doing well. Also a lot of big companies have been missing earnings.
Just a whole bunch of stuff adding together isn't make me too optimistic for the market. I invest for the long term but like I said before I don't want to get in on the ride up, I'd rather keep adding after a drop on the way down.

how much was the interest in your credit card debt?

>>639116
I was going to buy ExxonMobil, then I realised you were OP and bad with money. So I didn't. Well done Loany McLoan, good job abusing money.

>>639226
16.99 $3k
12.99 $2k

>>639245
That's crazy money

>>639245
Damn that's good. Most credit cards here are 19.99% minimum. Where do you live?

>>639250
Pittsburgh

I've considered doing something like this.
>Interest rate arbitrage.
There are no guarantees that the S&P is even positive by year end. Make sure you can repay loan even if you lose it all.

>>639288
I agree and yeah I can repay the loan no problem. I mean pay the payments.

>>639096
If the loan holds things like balance transfer 0% fee and interest waiver for 6-12 months then its perfect

If there was than it is the best way to escape debt, assuming you pay it off before the waiver runs out.

>>639083
you forgot capital gains taxes
unless you don't pay taxes

>>639100
Your loan will be 6.5%
You 'predict' the market will return you 10%
>I'm going to ignore the fact that any return at all is not guaranteed
Say you get 10%... now you pay tax on that... your 10% earned is now at about 7%?
>Well done, your stupid loan earned you 0.5% interest, assuming it got you an unlikely 10% return

>If I could get a personal loan for 6.5% is it worth doing to put in an s&p 500 index fund?
No, that's full retard.

>>639083

S&P lol pleb. Buy Bitcoin with it you dolt. In fact, use the loan as a downpayment for another much bigger loan and take a huge position in Buttcoins.

There is no extradition treaty in the Philippines, which might be a good escape route if shit blows up in your face. Just change your name to Guillermo Sanchez and burn all your I.D/sever any family ties.

>>639083
You are a fucking retard. My company offers me 60% on an employee share scheme on top of capital and I still wouldn't touch a personal loan to purchase it.

Fucking hell, you spastic. Do the maths.

>>639376
That's a 30 percent tax rate. I don't make that much money. Still even at 0.5 percent it would be worth it.

>>639537
>what is risk?

>>639543
>what is reward?

>>639100
>>639096
Sorry OP, you're not going to make it.

Pic related, that's your future the way you're going

Yes,. You should try and earn 3% month. Slow but sure, write covered calls on anti-ZIRP vehicles $TED $GE_F $ZQ_F $TYO $TMV

Pay it forwards, is my trailing stop(s) too tight with $DWTI short. Eight rolls of the dice, a birdie in the hand.

So did she end up stripping or no?

>>639083
Getting a loan to put into stocks what the fuck

>>642490
Actually, this practice is widespread, but among institutions that can justify very low interest rates. Individuals should not pursue this strategy.

>>639086
>>639096
>>639102
>>639110
>>639114
>>639121

>>639083

Just get over to lending club and start loaning it out to A loans.

Try to pick people with 5 years at the same job, 36 months or more (or never) on their default, and only pick credit card consolidation loans, never medical bills or home repair.

You'll need to pick up some B and C loans to actually make money, but it's do-able.

>>643730
That's where the personal loan is from... lol

Also thinking of doing a balance transfer for an extra 2k.

Loan was approved for 8k.