HBP Posted January 24, 2011 Report Share Posted January 24, 2011 Leveraging with a low interest loan isn't a bad idea if you know what you're doing. Link to comment Share on other sites More sharing options...
future_doc Posted January 24, 2011 Report Share Posted January 24, 2011 Yah, but even the experts don't know what they are doing. So why take an unnecessary risk that you really cannot afford - and with no "assets" behind you? Effectively making investments on margin, from loans, is a dangerous business that is soo unnecessary for a student especially. Link to comment Share on other sites More sharing options...
hking03 Posted January 24, 2011 Report Share Posted January 24, 2011 Leveraging with a low interest loan isn't a bad idea if you know what you're doing. This is all hypothetical, as I'm still at least a few months away from knowing for sure... I may take some of the LOC money and invest it with a Real Estate Investment Corporation that I have watched grow over the last few years- the average expected annual return is 6%, but hasn't dropped below 8%... Link to comment Share on other sites More sharing options...
notjk Posted January 28, 2011 Report Share Posted January 28, 2011 This is all hypothetical, as I'm still at least a few months away from knowing for sure... I may take some of the LOC money and invest it with a Real Estate Investment Corporation that I have watched grow over the last few years- the average expected annual return is 6%, but hasn't dropped below 8%... I am assuming your talking about a REIT stock, you should really check into the stock's actually rela estate and cash flow, because there are companies that buy properties but does not have positive cash flow for a quarter or two, but somehow manage to pay their dividends--- risky as futuredoc said it, especially if you have no collateral. Not to mention you will be taxed way more compared to an high paying dividend stock ( such as ZHY.TO) http://www.theglobeandmail.com/globe-investor/markets/markets-blog/dividends-beat-reit-payouts-when-it-comes-to-tax/article1874023/ ---> good explanation Link to comment Share on other sites More sharing options...
future_doc Posted January 28, 2011 Report Share Posted January 28, 2011 The best investment at this stage is NO investment. Link to comment Share on other sites More sharing options...
rmorelan Posted January 28, 2011 Report Share Posted January 28, 2011 The best investment at this stage is NO investment. except for medical school education perhaps Link to comment Share on other sites More sharing options...
AndrewB Posted January 28, 2011 Report Share Posted January 28, 2011 The best investment at this stage is NO investment. Just because you know nothing about it doesn't make it a bad idea. Link to comment Share on other sites More sharing options...
future_doc Posted January 28, 2011 Report Share Posted January 28, 2011 Good one AndrewB , your father would be proud of you again if he were to become aware of your insightful and helpful contribution. Thankfully, it skips generations. Link to comment Share on other sites More sharing options...
AndrewB Posted January 28, 2011 Report Share Posted January 28, 2011 Good one AndrewB , your father would be proud of you again if he were to become aware of your insightful and helpful contribution. Thankfully, it skips generations. Uhhh what? I shouldn't even dignify that with a response, but whatever. Stop commenting on every freaking post on this board when you don't know anything about the topic. It's polluting the quality and reliability of the information on this site. Regarding using an LOC to invest - people invest on a margin everyday. IMHO, trading with your LOC as capital is a great option for people who understand the risks. You're in control of the cash, unlike in a margin trading situation. Link to comment Share on other sites More sharing options...
The Ace of Spades Posted January 29, 2011 Report Share Posted January 29, 2011 While I agree that using a LOC to invest can be risky if you know nothing about the market, with a little know-how you stand to gain a lot of $$$. Link to comment Share on other sites More sharing options...
cheech10 Posted January 30, 2011 Report Share Posted January 30, 2011 I agree that using an LOC to invest, especially one at prime, is a great option if the risks are reasonable. The problem is the risks are too high for most med students: 1 - your time horizon is short; you will need much of the LOC for tuition, etc. in the next 4 years, and in the short term most investments have too much volatility and the potential of negative return is significant. Or, you could choose non-volatile investments (money market funds, some bond funds) but the potential gains are minimal over the interest you will pay. 2 - the potential downside is large; not just losing the money in the LOC, but also losing your ability to pay for medical school. If you burn through one LOC for investing, there is no way another bank will loan you a new LOC. Now, if you don't need the LOC to pay for school, then your risk tolerance is much greater, as is your time horizon. In that case, the LOC is an effective tool to minimize your interest costs for investing. Also don't forget the interest on the funds used for investing is tax deductible (just leave a clear paper trail for CRA). Link to comment Share on other sites More sharing options...
Mourning Cloak Posted January 30, 2011 Report Share Posted January 30, 2011 If you burn through one LOC for investing, there is no way another bank will loan you a new LOC. There's also the small fact that in general the banks will set out in the agreement that you sign what you can and can't use the LOC for (for the one I signed, it was all there in the fine print). And margin investing (any investing, actually) certainly was on the naughty list. Link to comment Share on other sites More sharing options...
itimebomb2 Posted February 2, 2011 Report Share Posted February 2, 2011 While I agree that using a LOC to invest can be risky if you know nothing about the market, with a little know-how you stand to gain a lot of $$$. Pfft. Tell that to the investment bankers who do this professionally... they'd all call you an idiot for risking a secure future in medicine for a few thousand bucks. Bottom line - Greed is the beginning of endless miseries. Don't waste your time and effort betting on stocks when you should be investing in your medical career. Med school is tough enough that if you're spending a significant amount of time investing, you're certainly losing out on your education. If you don't care about any of that, at least be wise enough not to bet any money that you know you'll NEED to finish med school. Link to comment Share on other sites More sharing options...
itimebomb2 Posted February 2, 2011 Report Share Posted February 2, 2011 Furthermore, investing might sound smart today when prime is at 3%, but when it jets up to 5, 6 or 7% (which is extremely likely if not gauranteed in the next few years), you'll be hard pressed to come out even, let alone on top. Link to comment Share on other sites More sharing options...
apache Posted February 6, 2011 Report Share Posted February 6, 2011 you're right, investing a terribly bad idea if you don't know what you're doing, but if you do, it can be fantastically profitable. imo, one reason medicine is a great career isn't because it provides a good salary to live on, but because it provides a great salary to invest with: you have to work smart, and let your money work for you. if you're slick with technical analysis and work the forex, or focus in on a specific sector in the market (i focus hardcore on small-mid cap basic mining, especially uranium, since the spot price (day to day trading, which smaller miners do (big guys like cameco do the long term contracts) is finally going through the roof on a demand rather than supply basis), you can make fat cash. in fact if you have a good trading platform you can make a killing scalping citibank (lots of professional traders right in ny do this). the stock trades 150 million - 500 million shares a day (the most liquid stock on the nyse, by far, in fact when the gov sold it's shares it traded around 3 billion shares, half the volume of the whole nyse!!), trades at about 5 dollars (meaning that smallest incremental moves (a penny) are 0.2 percent profit, or 400 dollars if you're investing 200 k a pop, which is a quick trade possible only with this kind of liquidity. repeat this 10 times a day, you'll win 8, lose 2 = 2400 dollars a day, believe it or not, there's people who essentially make money out of nothing doing this, i can't wait for citi to get back over 5 dollars so i can start doing this again (online trading reviews high dollar value trades on equities under 5 dollars making the process to slow to scalp cash on). what you basically do is wait for the stock to stabilize at a certain point for 10 minutes or so 4.83, 4.84, 4.83, etc. then you buy at 4.83 and put a sell in for 4.84... i know you're thinking, what if there is bad news and the stock drops 10 cents, well that's why you have a stop loss at 4.82 or 4.81, once the stock hits this point your shares will go on the market, and with a stock as liquid as citi, they're gone in an instant. if you repeat this process over and over you'll make lots of money. in fact, if you want to know a little secret, the reason online trading institutions offer 8 dollar trades is because they do the same thing on a much larger computerized scale: if you offer to buy 10000 shares of yahoo for 16.30, they'll sell you shares they bought at 16.29 and make 100 dollars off of the 10 dollars you paid them... the only difference is that millions and millions of shares are crossing thru these online trading companies... meaning that they make enormous amounts of money off the trade you pay them for... but if you're clever enough, you can do the same thing. don't feel like taking big risks, then put your money in a gigantic large cap like exxon, pepsico, wal mart, or microsoft, and take home your dividend and a fairly stable stock price that may even make you 10 percent or so in a year. you can also play the small caps and make 10 percent in a day (urre, uex, uec etc. this friday, i noticed urre had been underperforming recently as it was tremendously overbaught, run up, and people sold off for profits, making it a value compared to it's peers... anyhoo, i snagged 25 k shares, for 2.80, sold on friday for 3.33 for a nice 13 k profit over the course of less than a week), but that's not for the faint of heart, or people who don't know what they're doing (i.e. you're not willing to devote a couple hours a day following a specific sub-sector that consists of roughly 10 stocks). anyhoo, sorry to rant, it's just that there's a world of opportunity out there if people are willing to look, and it bothers me when people sell themselves short by not at least considering other possibilities, maybe because i use to think investing was stupid until some friends got me into it, anyhoo, chow, gotta hit the slopes tomorrow . Uhhh what? I shouldn't even dignify that with a response, but whatever. Stop commenting on every freaking post on this board when you don't know anything about the topic. It's polluting the quality and reliability of the information on this site. Regarding using an LOC to invest - people invest on a margin everyday. IMHO, trading with your LOC as capital is a great option for people who understand the risks. You're in control of the cash, unlike in a margin trading situation. Link to comment Share on other sites More sharing options...
apache Posted February 6, 2011 Report Share Posted February 6, 2011 i beg to differ, i know a lot of people that are on class council, run student groups, do intramurals, or stupid research that won't really contribute to anything except looking good on the cv. i could argue that takes time away from their medical studies... but they enjoy it, so why should i criticize them?? it looks good on their carms apps if they want competitive specialties or w/e. if someone want's to do fm or psych or something and doesn't care about padding their cv with non medically related activities, what's the difference if they spend the time working on investing instead of the class ski trip? diff strokes for diff folks, some people like security, some people like risk, medicine can make you well off, investing (not betting, that's mostly your netflixs, amazons, baidus, lululemons and other momentum stocks that trade on huge p/e ratio's and are praying for huge continued growth because it's already valued into the stock (baidu tumbled 10 percent after they announced slower anticipated growth for 2011, but after their most recent earnings report, they've moved 23 percent since that slow growth announcement, only a month and a bit ago... that's pure gambling imo) can make you filthy rich. i agree though that you shouldn't risk any money you can't afford to lose, especially if you have no idea what you're doing, otherwise you'll wake up one day and be scratching your eyes because your left over loc will go from 170 k to 70 k and you'll be **** out of luck... but i guess there's always gov student loans and a 3 month locum up in the nwt when your done if that happens. Pfft. Tell that to the investment bankers who do this professionally... they'd all call you an idiot for risking a secure future in medicine for a few thousand bucks. Bottom line - Greed is the beginning of endless miseries. Don't waste your time and effort betting on stocks when you should be investing in your medical career. Med school is tough enough that if you're spending a significant amount of time investing, you're certainly losing out on your education. If you don't care about any of that, at least be wise enough not to bet any money that you know you'll NEED to finish med school. Link to comment Share on other sites More sharing options...
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