Pros & Cons of Getting a Loan to Invest for Dividends

In this video I explain the pros & cons of getting a loan to invest in dividend stocks.

Timestamps:
0:00 Intro
2:25 My TLDR on the topic
3:24 Example loan & div portfolio
4:49 Con/Risk
5:08 Living on a portfolio simulator tool
6:10 Con/Risk
6:26 Con/Risk
6:32 Con/Risk
6:38 Con/Risk
7:01 Pro
7:12 Con/Risk
7:18 Pro
7:32 Con/Risk
7:39 Con/Risk
7:46 Con/Risk
8:02 Con/Risk
8:08 Con/Risk
8:58 Con/Risk
9:08 Con/Risk
9:18 Con/Risk
9:26 Pro
9:39 Con/Risk
9:48 Con/Risk
9:52 Con/Risk
9:56 Summary
10:11 Should you invest in stocks if you already have debt?
10:36 Quora blurb & thoughts
12:35 Taxes and investing, loans
14:50 Mortgage loans & more
15:19 Best Case/Worst Case & your mindset
16:13 Dave Ramsey debt thoughts
16:47 Outtro
17:04 Shoutouts
17:08 FASTgraphs affiliate link & coupon code (in video description)
17:18 Seeking Alpha affiliate link
17:23 Other pitches/fin

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Disclaimer: I am not a financial adviser. These videos are for entertainment, inspiration, and educational purposes only. Investing of any kind involves risk. I am only sharing my opinion with no guarantee of gains or losses on investments. Please consult an appropriate adviser and do your own research before making any decisions on anything. I am not responsible or liable for any actions you take. The data shared may be inaccurate.

Copyright © 2024 GenExDividendInvestor. All rights reserved.

#Dividends #PassiveIncome #DividendGrowthInvesting

[GenExDividendInvestor]

In this video I explain the pros & cons of getting a loan to invest in dividend stocks.






Timestamps:
0:00 Intro
2:25 My TLDR on the topic
3:24 Example loan & div portfolio
4:49 Con/Risk
5:08 Living on a portfolio simulator tool
6:10 Con/Risk
6:26 Con/Risk
6:32 Con/Risk
6:38 Con/Risk
7:01 Pro
7:12 Con/Risk
7:18 Pro
7:32 Con/Risk
7:39 Con/Risk
7:46 Con/Risk
8:02 Con/Risk
8:08 Con/Risk
8:58 Con/Risk
9:08 Con/Risk
9:18 Con/Risk
9:26 Pro
9:39 Con/Risk
9:48 Con/Risk
9:52 Con/Risk
9:56 Summary
10:11 Should you invest in stocks if you already have debt?
10:36 Quora blurb & thoughts
12:35 Taxes and investing, loans
14:50 Mortgage loans & more
15:19 Best Case/Worst Case & your mindset
16:13 Dave Ramsey debt thoughts
16:47 Outtro
17:04 Shoutouts
17:08 FASTgraphs affiliate link & coupon code (in video description)
17:18 Seeking Alpha affiliate link
17:23 Other pitches/fin



Please LIKE, COMMENT and SUBSCRIBE to support this channel - it helps me immensely! Also, please SHARE this video with your friends :) Thanks, I really appreciate it!

[ListerBliss]

Yes, def need video on taxes that also covers qualified/non-qualified, “ordinary” etc and taxes on interest from HYSA/money market accounts vs taxes on dividend income. Thank you. And yes, this video from you surprised me at first!

[GinJ]

It depends on what interest rate you can get. I did this a couple of years ago when interest rates were low and got a loan for 3%. Fixed interest rate and 10 years duration. I mixed dividend / income ETF with a high yield stocks such as BDCs and REITs. So far it worked wonderfully. I wouldn't do this with current interest rates. The same bank offers the same loan for 8% nowadays.

[BrettBayer-gjuo]

I would also enjoy a video on taxes, especially on the following: EPD with distributions where the only taxes would be when you sold the units, JEPQ being mostly ordinary income, the good and bad on return of capital, how some option income can be classified as return of capital like how BOXX uses options, etc. Thanks!

[delbomb]

Love the way traditional dividend communities and high yield dividend communities are aggressively different on this subject. Just 1 yes in this comment section so far, and in that community it's weird if you don't. I pay attention to many strategies to avoid living in an echo chamber.

[durellquincy]

The idea of taking out debt to invest is a scary concept to me. Like you perfectly illustrated, essentially every variable needs to go your way or you get yourself into trouble. Great video!

Also PLEASE do an in-depth video on taxes!

[arthurmilonas]

I enjoyed another video of yours. I watch all your videos when they come out they inspired me to keep and saving money and investing money in stock. Looking forward for your next video.

[josephawad]

I would love a video with practical advice for dealing with dividends/reinvested dividends in a taxable brokerage account. It's a bit late for me to fully pivot into a retirement account for tax-advantaged reasons, but I've really leaned into dividends and DRIPS since being introduced to your channel. I absolutely love dividend investing but am concerned about the huge tax bill that's looming, especially if there's an inevitable market sell-off. Yikes. Great video, as

[Sylvan_dB]

Yes, and yes. Margin frequently (but never deeply). Twice borrowing from my 401(k) to invest in stock outside the 401(k). Another time is a harder call... In 2008 I maxed out a HELOC when I lost my job and put it in the bank "just in case." Later (after I was working and didn't need that much cash on hand) I invested it in stocks. About 8 years later the HELOC "interest only" period was ending and I would need to make fully amortized payments, so I used margin to access cash and pay off the HELOC in full.

My "portfolio margin" available is usually at least 50%. I've never gone more than 25% and usually well under 10%. That means a 50% market drop is unlikely to result in a margin call.

[DavidJames-yuvt]

Thank you for sharing. Yes, a video about taxes would be very helpful

[nicolaskesington]

thanks for the video and info, i am 57 years old and i am investing in high yield etf, i
am using borrowed money in the form of HELOC ( home equity line of credit), i use the dividend that i receive to repay the loan

[billyjohnson]

I would never ever take margin or borrow for stocks. The only thing I’d borrow for is investing in real estate.

[davisdj]

Great topic, much too risky for me. A video going down the tax rabbit hole would be fantastic, probably several .

[mjss]

@9:48

A personal loan won't be tax deductible interest but using margin, the interest is deductible.

[Beeautifullifefarm]

I have a HELOC locked in at 3%, every few odd weeks I take out 5k . I get paid bi-weekly and pay the 5k off at average time of 4-6 weeks . I then repeat the process, while I can invest smaller amounts every time I get paid, I prefer to purchase 100 shares at once if I can in order to benefit more from the dividends.

[yohjijames]

Don’t forget the companies also carry debt on their balance sheet so you can be multiplying the effect. For me, a very small amount would be ok, about 25% of your (conservative) portfolio.

[makeitcold]

If you don’t have patience to set aside whatever you can afford to build up an investment position then you won’t have the patience to hold when everyone is selling at a loss during a bear market.

[moresugartradercc]

Good timing on this subject i see a lot of discussion on this recently

[KennyZ]

At one point I owned JEPI, borrowed at a low rate, invested that in more JEPI to pay off the loan. Kinda silly, but I was doing 4-7% arbitrage before taxes.

[TheGeordiePig]

Interesting video and from someone who seems to be in a very strong financial position I can’t work out where it’s ever a good reason to take on a loan to invest in dividends? Crazy! Loans are a no go when it’s not necessary!