I've heard from MDs that investing with your Line of Credit is a good idea/opportunity (e.g. investing in real estate). I've also heard it's irresponsible to invest with your LoC. What's your take?

[alrightythen]

When I ask on **DELETED** or some online forums, I hear using your LoC is irresponsible. But in real life, I've basically only ever heard MDs and other med students saying that the risk/reward when investing is a no-brainer when the interest rate is so low.

My hypothesis is that most people on finance subreddits may not appreciate how a medical students situation differs from the average person who qualifies for a LoC and wants to invest with it (mainly: far less risk of defaulting).

Has anyone here talked to an advisor at the bank they got their LoC from (Scotia for me? If you have, what did they tell you?

Thanks in advance. 

[JohnGrisham]

Bank has their own self interest - they want you to use your LOC as much as possible.

Leveraging LOC to me made sense, very low rate and get into a broad-based ETF market in my TFSA sooner. With the knowledge that I would easily pay it off(LOC) with my residency salary and new attending income.

[alrightythen]

17 minutes ago, JohnGrisham said:

Bank has their own self interest - they want you to use your LOC as much as possible.

Leveraging LOC to me made sense, very low rate and get into a broad-based ETF market in my TFSA sooner. With the knowledge that I would easily pay it off(LOC) with my residency salary and new attending income.

First, LOL I have a John Grisham book (The Summons) sitting right next to me that I'm hoping to read today.

Thanks for your reply, this echoes what I've been hearing. I might shoot you a PM later if that's okay.

[1D7]

Most people won't give you specifics about how to invest because they don't want to be or feel responsible if you lose money. Imagine you told a buddy to invest right before the COVID market crash, they panic sell a couple weeks later, and then blame you for their decision to sell low and buy high. This is the sort of thing you have to read into it yourself.

If you set some ground rules for yourself it is relatively safe (i.e. only invest with what you can afford to lose/payoff, you are making relatively safe investments into things like ETFs/index funds with your TFSA, you are certain you will complete residency/fellowship & finding a job in a timely manner, you have time to keep up with your investments a few times a month, etc.).

[zoxy]

The general public, and especially those on those forums, is very risk averse and uninformed about med student LOCs. For me personally, it's the fear of not matching that keeps me from doing this as a medical student, but having looked at the numbers it does make sense financial sense in the long run. But what I mean from pure financial sense is that you should theoretically make more money than you'd pay in interest, but there are reasons as to why I personally wouldn't do it.

The caveat would be that beyond pure financial gain and loss with investing your LOC, the LOC is something of an insurance policy in my eyes. If something for some reason goes wrong during my long training period, I'll have the flexibility to fall back on it. However, if I invest my LOC and something happens that simultaneously impacts me and causes the market to fluctuate(such as the initial months of COVID),  I would be forced into liquidating a portion of my portfolio at a loss rather than being able to draw from a relatively untouched LOC. So for me personally, the potential gain is not worth the loss of this insurance policy and added stress.

I looked at it this way: a specialist making 300,000 net will have 9 million or so of lifetime earnings, assuming they work for 30 years. 200,000 compounded at 7 percent over 9 years will yield a gain of 167,000. A 3 percent cost of borrowing would manifest in 60,000 of interest. A pre capital-gains tax profit of 100,000 is not worth the added stress when you can look forward to a financially comfortable career.

[alrightythen]

16 minutes ago, zoxy said:

The general public and especially those on those forums are very risk averse and uninformed about med student LOCs. For me persoanlly, it's the fear of not matching that keeps me from doing this as a medical student, but having looked at the numbers and it does makes sense financial sense in the long run. But what I mean from pure financial sense is that you should theoretically make more money than you'd pay in interest, but there are reasons as to why I personally wouldn't do it.

The caveat would be that beyond pure financial gain and loss with investing your LOC, the LOC is something of an insurance policy in my eyes. If something for some reason goes wrong during my long training period, I'll have the flexibility to fall back on it. However, if I invest my LOC and something happens that simultaneously impacts me and causes the market to fluctuate(such as the initial months of COVID),  I will have to liquidate a portion of my portfolio at a loss rather than being able to draw from a relatively untouched LOC. So for me personally, the potential gain is not worth the loss of this insurance policy and added stress.

I looked at it this way: a specialist making 300,000 net will have 9 million or so of lifetime earnings, assuming they work for 30 years. 200,000 compounded at 7 percent over 9 years will yield a gain of 167,000. A 3 percent cost of borrowing would manifest in 60,000 of interest. A pre capital-gains tax profit of 100,000 is not worth the added stress when you can look forward to a financially comfortable career.

Great points, thank you! Might I ask why you chose 9 years as the time horizon for the investment of $200,000?

[1D7]

19 minutes ago, zoxy said:

The general public and especially those on those forums are very risk averse and uninformed about med student LOCs. For me persoanlly, it's the fear of not matching that keeps me from doing this as a medical student, but having looked at the numbers and it does makes sense financial sense in the long run. But what I mean from pure financial sense is that you should theoretically make more money than you'd pay in interest, but there are reasons as to why I personally wouldn't do it.

...

Keep in mind that you have to assume that anyone asking for advice is at best average, and average isn't very good when it comes to investing. That's why online financial advice will tend to be highly risk adverse. Even safe investments can hurt badly if one is prone to emotional decision-making (which most people are when placed under stressful/anxiety-provoking conditions).

[zoxy]

22 minutes ago, alrightythen said:

9 years as the time horizon for the investment of $200,000?

Four years medical school and five years for most specialties so nine until you're an attending. Of course, that's assuming you're not doing FM, or the longer residencies such as NSx, CVSx, Cards, etc or a fellowship.

Personally, I mainly oppose leveraging as a medical student or a resident so that's why I chose the nine year horizon. I probably would consider leveraging if I were an attending and felt very comfortable about my future prospects. I'm just not at that point as a medical student and don't think I'd feel comfortable as a resident either, unless I matched to a specialty with a rock solid job market like Derm or EM. 

[LostLamb]

Looking at this from the attending point of view, I very much wanted to/considered to invest but never got around to it and that is probably a good thing.

A lot of unexpected things happened in residency (good and bad) and I needed access to the cheap-to-borrow money fast. I had enough on my plate as a trainee and doing everything else outside of residency that I enjoy, without having an investment portfolio to manage/monitor. I am glad I didn't have to deal with that on top of everything else when I needed the cash flow.

I think the other piece here is that while you'll always have access to the "cheapest" money to borrow on the medical LOC, you can't predict what the future interest rates are. Sure, it's easy to beat 2.25% interest with a modest and low risk investment vehicle today. You never know when we move up and into the double digit interest rates (unlikely but never say never) and then you are less likely to have a sure thing in hand that will beat that in terms of growth.

I may be behind the 8-ball in terms of investments, and definitely have lost some years for growth, but have a much better feeling of what I make as staff vs what I can afford to lose. I couldn't foresee this as a resident because there are just too many variables between practices even in the same specialty (plus throw in covid to mess with potential earnings).

LL

[blah1234]

I would not recommend it to medical students or residents. There can be unexpected costs that arise and you really don't want that stress during your training. Also, there are students that do not end up having a good outcome during this training path (e.g., illness, unmatched, lack of employment opportunities as a staff, and more). I think without the safe cash flow that you have as an attending it is a unnecessary amount of additional stress if things go wrong for a minimal increase in returns. Although the risk adjusted outcomes I just mentioned above are still overwhelmingly positive, I think the actual experience of the downside would greatly outweigh whatever positive benefit you would get. I've had to work with some students who have faced hurdles in their career and it's quite a stressful time.

[OldManNearTheSea]

If you can't competently explain rate delta, equity beta, and margin lending without the help of Google then you do not understand the scope of the risks involved. If you understand those concepts and have some experience using them then you know the risks and rewards here well enough to make your own decision. I would caution anyone considering this to read the fine print in their LoCs; I've never read any of these agreements, but I wouldn't be surprised to see prohibitions on using funds for investment purpose. 

[alrightythen]

52 minutes ago, OldManNearTheSea said:

If you can't competently explain rate delta, equity beta, and margin lending without the help of Google then you do not understand the scope of the risks involved. If you understand those concepts and have some experience using them then you know the risks and rewards here well enough to make your own decision. I would caution anyone considering this to read the fine print in their LoCs; I've never read any of these agreements, but I wouldn't be surprised to see prohibitions on using funds for investment purpose. 

I can't explain any of those (except maybe margin lending) but I've been investing in a few diversified ETFs since 2014 (following Canadian Couch Potato method)... why is knowing that necessary?

[OldManNearTheSea]

1 hour ago, alrightythen said:

I can't explain any of those (except maybe margin lending) but I've been investing in a few diversified ETFs since 2014 (following Canadian Couch Potato method)... why is knowing that necessary?

Interest rate delta and equity beta are two broad categories of risk you would be taking by borrowing to invest in the stock market. I.e. what happens to the position if rates change or the stock market declines. That's not even taking into consideration you potential liquidity issues in a market correction if you over extend. 

I'm on this forum as non-trad applying to medical school, but my current career is in finance. I don't want to see you guys get burned. Taking financial advice from doctors is like taking medical advice from me: it could be good, but you should probably check with an experienced professional instead. 

Borrowing to invest can be a sensible strategy, but it is also very possible to get into big trouble if you don't understand the risks upfront. 

[zoxy]

1 hour ago, alrightythen said:

why is knowing that necessary?

It's not. Not unless you start dabbling in derivatives, which you shouldn't unless you're Jane Street or Bridgewater. You don't need to know them to buy Vanguard ETFs if you're not getting more leverage than what the LOC provides.

2 hours ago, OldManNearTheSea said:

 I've never read any of these agreements, but I wouldn't be surprised to see prohibitions on using funds for investment purpose. 

Then you shouldn't speculate. I've read mine and there were no restrictions from what I remember.

[Pakoon]

These are all great points being made here, so do I use my LOC to buy doge coin or not? 

[OldManNearTheSea]

7 hours ago, zoxy said:

It's not. Not unless you start dabbling in derivatives, which you shouldn't unless you're Jane Street or Bridgewater. You don't need to know them to buy Vanguard ETFs if you're not getting more leverage than what the LOC provides.

Then you shouldn't speculate. I've read mine and there were no restrictions from what I remember.

Have you read all the agreements from every financial institution? If not, then I suggest you stop giving blanket financial advice.

Suppose someone tells our friend here that bonds are safer than stocks. Then suppose they borrow on their LoC to buy XHB.TO. Then suppose interest rates rise 1 percentage point. What happens? What happens if rates rise 2 percentage points? These rate moves are currently market expectations over the year and two years respectively, so you really should understand what they would mean for your investments. No derivatives involved here. Just basic "low risk" etfs and LoC borrowing. 

Maybe our friend is more adventurous and decides on ARKK; it's a top rated Morningstar fund after all. What happens if the S&P sells off 14 percent? What if it's 33 percent? These are the average and max drawdowns respectively, so you should understand what that would mean for your investments. What happens if it's a tech led sell off? No derivatives here either. Just etfs and LoC borrowing. 

[JohnGrisham]

15 hours ago, OldManNearTheSea said:

If you can't competently explain rate delta, equity beta, and margin lending without the help of Google then you do not understand the scope of the risks involved. If you understand those concepts and have some experience using them then you know the risks and rewards here well enough to make your own decision. I would caution anyone considering this to read the fine print in their LoCs; I've never read any of these agreements, but I wouldn't be surprised to see prohibitions on using funds for investment purpose. 

I think you overestimate what the average investor understands.

This is talking about the general populace that is invested in the market - i would venture to say the majority wouldn't know and understand those terms, and are doing just fine in broad-based index funds (but often more so mutual funds with higher fees from Big Banks).

The point in my mind, for a medical student or resident is to learn as much about finances/investing as possible before coming staff - and sometimes you learn better when you have skin in the game. For a medical student, maybe its investing 5k into a broad-based ETF(VGRO/VEQT) in your TFSA and reading as much as possible and learning as much as possible. For a medical resident, maybe its putting 15-20k into your TFSA and continuing to do the same. 

For a physician, if you are otherwise financially stable without major obligations, to leverage 50k from your low-interest LOC to fill up your TFSA with a broad-based low fee index fund - its a no brainer in my mind.  As a medical student, i would say its more tricky, unless you are reasonably well off by the way of supportive family etc, who could jump in and pay your debts off should you go unmatched or something happens. As a resident, again, without major debts/obligations, and now a steady income stream, it is something worthwhile considering.

As for the agreements - I have infact read the policies for the 2 major banks I have been with, and the 3rd bank my spouse is with. Zero issue with using a physician LOC as you please - to assume they would care in the first place the nature of your use is odd, considering that helps their bottom line the more debt you take on.     Even if the fine print did say you shouldn't etc (it doesn't), the average banker actively encourages it for things like down-payment investments and other investments, so the people who would likely enforce any rules are already at a conflict of interest and would be unlikely to do anything. This is all of course for the average physician, of course if you are deep in dept, have high risk profiles, into some fraudulent things, or are otherwise catching the eyes of an underwriter, that is a different can of worms.

I'd never recommend taking your LOC and investing into non-registered stock picks, thats for sure, as  medical student/resident. But for the average resident, sure i'd likely recommend throwing a small amount into a broad-based ETF to fill up your TFSA, as long as 1) you don't have a huge amount of debt (remember, most medical students are upper middle class, and have lots of support = less debt) that could become a liability in the event of illness and 2) therefore have a lot of buffer room in your LOC for unexpected costs. With a 350k LOC some banks are giving, using <50k to put into your TFSA to experience, and learn about investing through research/education while you're in a lower risk zone of sums is an invaluable learning opportunity. And you won't suddenly have more time as a attending staff to learn about this stuff, but you'll have much more income and more at risk to be preyed upon if you have poor financial understanding.  

DIsclaimer: this is not financial advice, i am not a financial advisor, an economist, a lawyer, or anything other than a MD interested in finance and undergraduate finance education EDIT: Also had significant debt leaving medical school and through residency, due to lack of family support. So my statements about the "average medical student" are based on that of publicly available data on medical student demographics, and reinforced based on observations of my previous classmates and co-residents. 
 

[LostLamb]

To be honest, I have a lot more time as an attending to learn what I want. I just don't choose to spend it on finances...maybe i ought to. I choose to "contract it out" instead;, like I have with my taxes, billings, transcription, etc.

I choose, instead, to watch more tiktok and netflix--in my field, this is kind of like work since I stay up-to-date on what my patients are talking about  

[shikimate]

You could join the FB group physician financial independence and see what people on there offers

It really depends on your comfort level. No amount of money is worth it if it'll keep you up at night worrying about it.

On the other hand, you could just take out a small amount of get your feet wet and do something very safe.

If your LOC from big bank charge 2.5% interest. You could buy the stock of that big bank and they pay a dividend >3%. Plus any interest accrued is tax deductible, unless your investment is in a registered account (TFSA, RRSP etc). The big banks of Canada have not stopped paying dividend in >100 years.

 

Disclaimer "The above comment is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained above constitutes a solicitation, recommendation, endorsement, or offer by myself or any third party service provider to buy or sell any securities or other financial instruments . It is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the above constitutes professional and/or financial advice."

 

[OldManNearTheSea]

4 minutes ago, JohnGrisham said:

I think you overestimate what the average investor understands.

This is talking about the general populace that is invested in the market - i would venture to say the majority wouldn't know and understand those terms, and are doing just fine in broad-based index funds (but often more so mutual funds with higher fees from Big Banks).

The point in my mind, for a medical student or resident is to learn as much about finances/investing as possible before coming staff - and sometimes you learn better when you have skin in the game. For a medical student, maybe its investing 5k into a broad-based ETF(VGRO/VEQT) in your TFSA and reading as much as possible and learning as much as possible. For a medical resident, maybe its putting 15-20k into your TFSA and continuing to do the same. 

For a physician, if you are otherwise financially stable without major obligations, to leverage 50k from your low-interest LOC to fill up your TFSA with a broad-based low fee index fund - its a no brainer in my mind.  As a medical student, i would say its more tricky, unless you are reasonably well off by the way of supportive family etc, who could jump in and pay your debts off should you go unmatched or something happens. As a resident, again, without major debts/obligations, and now a steady income stream, it is something worthwhile considering.

As for the agreements - I have infact read the policies for the 2 major banks I have been with, and the 3rd bank my spouse is with. Zero issue with using a physician LOC as you please - to assume they would care in the first place the nature of your use is odd, considering that helps their bottom line the more debt you take on.     Even if the fine print did say you shouldn't etc (it doesn't), the average banker actively encourages it for things like down-payment investments and other investments, so the people who would likely enforce any rules are already at a conflict of interest and would be unlikely to do anything. This is all of course for the average physician, of course if you are deep in dept, have high risk profiles, into some fraudulent things, or are otherwise catching the eyes of an underwriter, that is a different can of worms.

I'd never recommend taking your LOC and investing into non-registered stock picks, thats for sure, as  medical student/resident. But for the average resident, sure i'd likely recommend throwing a small amount into a broad-based ETF to fill up your TFSA, as long as 1) you don't have a huge amount of debt (remember, most medical students are upper middle class, and have lots of support = less debt) that could become a liability in the event of illness and 2) therefore have a lot of buffer room in your LOC for unexpected costs. With a 350k LOC some banks are giving, using <50k to put into your TFSA to experience, and learn about investing through research/education while you're in a lower risk zone of sums is an invaluable learning opportunity. And you won't suddenly have more time as a attending staff to learn about this stuff, but you'll have much more income and more at risk to be preyed upon if you have poor financial understanding.  

DIsclaimer: this is not financial advice, i am not a financial advisor, an economist, a lawyer, or anything other than a MD interested in finance and undergraduate finance education
 

Thanks for the thoughtful response. I am an economist, a former professional investor, and a current risk manager at a large bank. Likewise nothing I post on this forum is financial advice. I think your point about there being intrinsic value to the financial education aspect of this kind of activity is astute. I didn't consider that in my previous replies. 

I don't think I overestimate the average investor. I worry that the average investor is easily exploited by people in my industry and potentially mislead by popular culture attitudes towards certain investment decisions.  There is an impolite, but very common, term for high income earners like doctors and dentists in my industry: Dumb Money. It is very common for smart people in any field to think they can easily become competent in unrelated fields. Much like my Google searches don't substitute for a medical degree a doctor's Google search is not a substitute for graduate training in economics and years of industry experience. Leveraged investing is inherently more dangerous than unleveraged investing. My favorite distillation of this warning comes from Warren Buffett:

Quote

My partner Charlie says there are only three ways a smart person can go broke: liquor, ladies and leverage. Now the truth is — the first two he just added because they started with L — it’s leverage.

 

If all we're talking about is a med student dropping $5000 to buy some VGRO in a TFSA, then I would likely accept it as a reasonable expenditure for educational purposes if nothing else. I don't know if government student loan and grant calculations are done based on gross or net assets so there may be some implications there, but those are are complicated and at small enough dollar amounts it shouldn't be a huge issue. If we're talking about that same med student investing large dollar amounts and/or buying more speculative assets then I start having significant concerns.

Once someone is matched into residency and has every reasonable expectation of eventually becoming a well paid staff physician, then leveraging up to max out a TFSA starts to make more sense in my opinion. I would still need to know more details about that person's available liquidity and medium term life plan, but definitely worth a conversation and doing some math.  

At the staff physician level I think this conversation actually becomes more complicated again. Last I checked, Interactive Brokers margin loans are cheaper than prime-25bps and that interest can be tax deducible. If someone were going to use leverage then a margin loan against securities in a taxable cash account may be more appealing than a professional LoC. This all depends on  things like personal vs corporate structure and if tax advantaged accounts have already been maxed out. This is beyond my own expertise, so I'd need to consult with a proper accountant at this level. I doubt there is an easily generalized best answer here. 

I'll take your word for it on the lack of covenants in the LoC on use. I find it somewhat surprising because, generally speaking, almost every contract banks offer is significantly more restrictive of your rights at our discretion than you might expect based on the normal service level. I agree that the bankers you interact with will be all for you drawing on you line. You will never meet anyone from the risk department. I assure you we cut lines and fire clients when the situation calls for it. In this instance it seems like we have less ability to do that. I spent much of the last year fighting with our product people about a very similar product to these LoCs that is offered to our corporate clients. Perhaps I should go sniffing around how we're managing risk on our professional and student LoCs... 

I think we largely agree on what a responsible approach would look like. Perhaps I should think about doing something for student/resident financial education if I end up being accepted. Could be an interesting project and sounds like there is a need.

[indefatigable]

I do agree that experience with investing can be valuable.  Instead of starting by investing x number of (leveraged) dollars though, a portfolio tracker could be a valuable way to get a feel for investing including hopefully transaction costs without any real risks.  For example, almost a lifetime ago, I took a business course which included a 'market competition' where "money" was invested and performance tracked over time.  I remember doing really well, but then in an attempt to reach the "top" made a bunch of derivatives plays which backfired.. lol.  Still -it was a great learning experience.  And I was then very comfortable with investing some savings obtained from a different career during a transitional period before being accepted to and starting medical school (by which point I had to liquidate all those savings).  Perhaps finding people with similar interests could increase the realism of any "stimulated portfolio".     

I do agree though that I'd hesitate investing a LOC especially as a med student given many unknowns (which I personally experienced).  If, during residency, one had a great deal of unused credit (e.g. 40-50%+) and had some comfort in investing then investing, like for a TFSA,  could be a possibility, as long as one were realistic about the likely return and able to accept any losses.  I do think interest rates will start rising again which will definitely change the game, as was pointed out above.  

[zoxy]

11 hours ago, OldManNearTheSea said:

Have you read all the agreements from every financial institution? If not, then I suggest you stop giving blanket financial advice.

I'd wager than over 95 percent of Med students have Scotia or RBC so there's no need to check "every financial institution". I've read both and neither restricted investment as I specifically looked for it.

And no one is leveraging themselves to buy long term sub-prime Canadian bonds or to get more leverage. They want to setup a TFSA with equity ETFs. There's no need to for an MS in financial mathematics from Chicago Booth or Wharton for doing that. You're making an argument to a straw man. And even if the S&P falls 33 percent, it's not like the bank will ask for more capital. This is leverage via a personal LOC, not leverage via a trading account, a margin call will not take place. You eat the loss and move on. You don't need to know financial math for that.

[OldManNearTheSea]

25 minutes ago, zoxy said:

I'd wager than over 95 percent of Med students have Scotia or RBC so there's no need to check "every financial institution". I've read both and neither restricted investment as I specifically looked for it.

And no one is leveraging themselves to buy long term sub-prime Canadian bonds or to get more leverage. They want to setup a TFSA with equity ETFs. There's no need to for an MS in financial mathematics from Chicago Booth or Wharton for doing that. You're making an argument to a straw man. And even if the S&P falls 33 percent, it's not like the bank will ask for more capital. This is leverage via a personal LOC, not leverage via a trading account, a margin call will not take place. You eat the loss and move on. You don't need to know financial math for that.

I cautioned people to read their own credit agreements. You stated your agreement didn't prohibit it and then extrapolate it is fine for everyone. Correct or not, that is irresponsible advice on your part to speak with a certainty you do not have.

Now you claim you know how everyone will invest with borrowed money too. Again, this is irresponsible. How exactly do you know the readers of your comments will invest responsibly or that they can afford to eat such a loss? While this kind of leverage lacks a direct margin call you are still tying up liquidity. Are you going to cover them for the costs of an unexpected pregnancy or disability if they need cash and come up short?

I think it's clear from my comments that I am neither strictly opposed to or in favour leveraged investing. I am cautioning people to understand the risks they are taking before they take them and to not take risks they don't understand. 

 

[zoxy]

1 hour ago, OldManNearTheSea said:

Now you claim you know how everyone will invest with borrowed money too. How exactly do you know the readers of your comments will invest responsibly or that they can afford to eat such a loss?

Because I literally said it's OK if you dump it in Vanguard ETFs and you shouldn't dabble in financial products unless you're on Wall Street.

1 hour ago, OldManNearTheSea said:

then extrapolate it is fine for everyone.

You extrapolated that. In my first comment I said you shouldn't use your LOC for investments as a student or resident as it will reduce flexibility and training is long and unpredictable.

1 hour ago, OldManNearTheSea said:

Are you going to cover them for the costs of an unexpected pregnancy or disability if they need cash and come up short?

Again, in my first comment I literally said you shouldn't do it due to unforeseen events during and after training. You don't need to understand Beta and Delta to understand you might run out of credit if you dump it into investments and the market goes south and you need to liquidate.

1 hour ago, OldManNearTheSea said:

I am cautioning people to understand the risks they are taking before they take them and to not take risks they don't understand. 

No, you said:

21 hours ago, OldManNearTheSea said:

If you can't competently explain rate delta, equity beta, and margin lending without the help of Google then you do not understand the scope of the risks involved.

Again, these have to do with derivatives and no one here is advocating for that. Implying that people who don't understand derivatives modelling (and they're models, not gospel) don't understand the risk of leveraging an LOC to invest is what I disagree with. Literally the dude you quoted, Charlie Munger: “Beta and modern portfolio theory and the like — none of it makes any sense to me. We’re trying to buy businesses with sustainable competitive advantages at a low, or even a fair, price.” You don't need financial math to make reasonable investment decisions and cost benefit analyses.

1 hour ago, OldManNearTheSea said:

I cautioned people to read their own credit agreements. Correct or not, that is irresponsible advice on your part to speak with a certainty you do not have.

These are standardized products. I don't get a special one from Scotia or RBC and neither does another colleague. We all have the same product so I don't see how I'm speaking with a "certainty" that I don't have.

[JohnGrisham]

5 hours ago, OldManNearTheSea said:

There is an impolite, but very common, term for high income earners like doctors and dentists in my industry: Dumb Money. It is very common for smart people in any field to think they can easily become competent in unrelated fields.

Definitely the case! 

I like to think though, that with financial education being readily available, increase in easy to understand and "less fancy" investing products and more younger physicians being interested in finance...this is getting better. Hopefully in another decade, long will be the days of people handing money over to their parents older financial advisors taking huge MER cuts etc.  For most people, the main piece isn't even the intricacies of financial products and types of investing: its the tried and true spend less and save more. Most high income earners succumb to lifestyle creep really easily. And while life is short, and you have to live, you don't always *need* to spend on frivolous over the top expenditures that don't always provide a commensurate enjoyment value.  When you have more disposable income, these types of decisions creep up much more commonly.