How Margin Loans Work And How I Personally Use Them

0:00 Start
0:25 Withdrawing Cash On Margin
1:45 Margin Loan Interest Rates
3:38 Maintenance Margin
7:20 My Personal Assumption Of Equity Downside
8:40 Why Take Out Margin Loans
11:20 Personal Reasons Why I Use Margin Loans
16:00 Other Reasons To Use Margin Loans

[@ghostmane2643]

This is one of those low view but EXTREMELY high value gold mine videos. Thanks for the info!

[@andrewi147]

Was just thinking about margin loan to buy houses cash and refinance and then you brought it up haha. Got the wheels spinning for sure!

[@coreyoninvesting397]

Many investors do it!

[@doctorale84]

thanks for explaining in a very accessible way!

[@cnacne]

With a cash offer on a home, the seller doesn't need to worry about the buyer qualifying for a loan.

[@reginaldmarselus4742]

Margin loans are not included on a personal credit report

[@coreyoninvesting397]

That is correct. Did I misspeak in the video?

[@eljuancho2]

Thank you very much!

[@KpxUrz5745]

What puzzles me is being charged margin interest when I carried no margin loans overnight, and in fact had a positive cash balance. Can anyone explain this?

[@user-mx8xg5ex6f]

hi how long I can allowed to hold my margin position of stock is there any expiry date of my margin trading

[@gustavodiaz4689]

Good stuff following

[@kukurei]

Do you pay interest back to your account or to the broker?

[@coreyoninvesting397]

The broker charges interest to your account and subtracts the amount from your cash balance.

[@broskibrewer2187]

Is it possible that I can get the same deal from a bank or is this only offered through The brokerage?​@@coreyoninvesting397

[@Acutabove101]

I have a question: How do you pay back your margin loan? Is it just a case of either selling securities or sending money to you IB account? What is the difference between sending money to you account to pay back your margin loan and sending money to your account to buy more securities? Thanks Corey.

[@coreyoninvesting397]

Yes, you just sell securities or deposit cash into your IB account. Either way increases your cash Balance. To your second question, there’s no difference. Cash goes into account. It increases your cash balance (thereby reducing margin loan amount). You can buy more securities and reduce your cash balance by that amount if you want.

[@ceciliaruns72]

Kids do random shit! 😂 Like my daughter forgets to brush her molar and it needs a root canal and crown costing 2k! 😩 I used margin to buy land a couple of years ago and now it’s quadrupled!

[@coreyoninvesting397]

haha yup random shit. Not for me.

[@80sheaven]

I'm using margin only for buying securities until now ,what now with interest rates 6.78%..?

[@coreyoninvesting397]

Ah yea the interest rates have risen drastically since publishing this! I’m still using it it to fund business operations and acquisitions.

[@jonathandowning9733]

Still cheaper then income tax

[@brahmmauer7437]

Those interest rates are not an annualized interest rate.

[@moneyhafimek]

M1 caps my loan amount at 33% of my holdings.

[@coreyoninvesting397]

Yea M1 has that limit.

[@wolfmarks841]

Is not the Maintenance requirement much lower than 50%? (Only the Initial margin requirement is 50%)

[@MattK9548]

Kids can indeed do random shit.

[@987loco]

That was really funny... God bless you and your familly

[@andyhermiz3075]

Your very smart how old are you if you don't mind me asking?

[@coreyoninvesting397]

Thank you. Currently 34, so 32ish when I recorded this video.

[@overratedprogrammer]

So what I don't understand when people mention this is how rich people live, ok I understand they don't want to sell to pay taxes so they borrow the money at a very cheap rate. But eventually they have to sell anyway to pay back the loan, no? They can't just keep borrowing more and more?

[@timz2917]

no they just buy out the loan position into equity, and then get more debt to increase their leverage and the cycle continues

[@hostility4u]

One of the best things to do with margin is use some margin to buy dividend paying stock's or etf's and use some of the dividends to payoff the margin debt

[@overratedprogrammer]

@@timz2917 how do you buy out a loan position? Also what do they buy it with?

[@overratedprogrammer]

@@hostility4u that requires a pretty low interest loan then, but I guess with lots of wealth they can get that

[@felipesuarez6564]

they can (they are rich anyway, so they must have multi million balances). They continue borrowing until they die. Then their inheritors will receive the assets at market price "resetting" the capital gain tax. The inheritors can then sell assets and pay the whole debt if they wish to. No taxes paid in this scheme. This is called buy, borrow, die.

[@JGGarcia-kh8uq]

Etrade interest rate is around 13%, too much

[@Thomas43990]

Most brokerages i know of can be negotiated down and usually its just a question to be asked and sometimes they require your portfolio to be worth so much to qualify for lower rates than posted on their websites