Friday, January 13, 2012

Why Another Article on Borrowing to Invest?

There have been many articles written on the benefits and risks of borrowing to invest (leveraging). For instance, we’ve all been told that if you put $100,000 into a mutual fund–using $25,000 of your own money and a $75,000 loan–and the fund gains or loses 10 % or $10,000, that would actually be a 40 % gain or loss on your original equity–before loan costs. So why another piece on the topic?

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