Is borrowing money a good investment?

Borrowing to invest means you can deploy large amounts of capital either all at once or over a period of time. The interest, for those investing in publicly-traded securities, may also be tax deductible. One risk is an investment made from borrowed money may drop in value, which could be less of a concern if it’s a long-term move.

Should you borrow to invest?

Borrowing to invest can increase your returns by allowing you to purchase more than your current cash balances allow. However, it can also amplify losses, which can ultimately result in negative consequences to your financial situation and credit. Investors can take out a loan from a lender or borrow on margin from your broker.

Is borrowing to invest a good investment strategy?

FP Answers: Borrowing to invest is a financial strategy that presents opportunities, but also pitfalls. It would be prudent to review your overall financial planning before choosing to implement a leveraged investment strategy since it can add a significant amount of risk to a financial plan and is not appropriate for all investors.