Should You BORROW to INVEST? | How Investment Loan Works? (Leverage Loan)

[@ThomasCChan]

Thanks for watching! Do you like the idea of borrow to invest? Share your thoughts in here!

[@gregboutilier6489]

I don’t usually comment on videos but this video covers 100% of anything you would need to know. EXTREMELY well done! Thank you!

[@ThomasCChan]

Thank you Greg! It means a lot!

[@ThomasCChan]

好消息：已有中文字幕！請打開cc字幕! ⌨ Hi guys! Thank you for your great support! Good news: Chinese subtitle is up (cc)! so more people can benefit from it!

[@princewembo8905]

This was so great. I wish we had it in South Africa but the issue is that our interest rate in borrowing can be up to 12%, even home equity is 7.5%. If you do this you need to find something that gives a % of 15% to break even which is so difficult without risk taking

[@MitchelDSouza]

Hey Thomas.. I promptly checked this video out after our discussion today! I am a big fan of your clear and concise explanations and have featured your channel in all my videos.. Keep up the great work :)

[@ThomasCChan]

Thank you Mitchel! Looking forward for our next chat!

[@austinspencer7354]

Changed my life at 26 years old.

[@karinasu6378]

This is such a useful video!! Thank you so much!

[@ThomasCChan]

Great your found value! Let me know if you have questions, Karina!

[@edisonfreelife]

That's amazing. Great insights. Thank you

[@ThomasCChan]

Hi Edison, thanks for watching!

[@EchadLevShtim]

I am considering this on my Dividend Portfolio because I made a whopping 2k my 1st 5 months on the NYSE/Nasdaq. Well, I also do my own taxes and entered my extensive list of 1099 forms this year and saw a wash sale because Webull free stocks randomly picked 2 positions I dumped, lmao. So the IRS needs 100 bucks from me, hahaha. No tax return for me and next round is going to be closer to 7k this time, but just 2 quarterly away from holding long. Thats when you take a 10k loan when you hit 365 days on your stock. Point being is to make 10k annual Dividends by reinvesting it all in those positions, as to cover the loan.

[@TashaD]

very useful information! thanks for sharing!

[@ThomasCChan]

Hi Tasha! Thanks for the support!

[@khaledammar7783]

What tool do you use for your videos? They look great.

[@ThomasCChan]

Hi Khaled. I used videoscribe. Quite handy

[@AhmedAli-f4f3c]

Hi Thomas, great video but can you lend yourself instead of using HELOC?

[@ThomasCChan]

Yes you can through specific banks. . Like national Bank. Manulife bank etc etc

[@miashappyday6955]

Thank you for this informative video Thomas. I was contemplating whether or not to invest 10k cad from my line of credit with 7.44% interest. I have 20k available money in my line of credit right now. I'm planning to invest 10k of that in Enbridge and in my calculations, I have to pay around 600cad for interest annually and that would be covered by dividends I'll receive from Enbridge. Expecting for gains from the capital 😁. I would appreciate any thought you can share. Thanks in advance

[@ThomasCChan]

Hi Mia! Glad you enjoy the video Couple things. As you mentioned the loc is 7.44% per year. Yes you might get covered by the dividends. And you can enjoy the growth. But couple things 1. The loc is base on prime too. So if prime increase your interest on loc increases too 2. Eventhough elmbridge is a solid dividend stock, if they pay less than 7% then you are losing the cost. 3. And if you do invest the 10k . Then you lost 10k of emergency fund. Therefore I find using the personal loc to invest will put you in a risky position. There are other investment programs that has a much lower interest rate. Feel free to have a chat with us for more detail www.thomascchan.com/thomas

[@miashappyday6955]

Thanks Thomas. Really appreciate your time

[@jeffpallingayan1783]

Can I deduct the interest on my home equity line of credit that I am using for investment in a tfsa all of it is invested in reits

[@ThomasCChan]

Hello you can't because you invest in the tfsa

[@rosemariel.9000]

If you borrow money to buy equity, can interest expense be deducted against your earned income. Does the stock have to be a dividend stock for the deduction. Thanks again

[@ThomasCChan]

Hi Rosemarie, same as below, the investment needs to generate interest / dividend income. Cheers

[@jies.3367]

Hi, do you know if America has such investment products?

[@ThomasCChan]

Hi Jie. This is more like a concept. You can achieve through different products. And I am sure America has been leverage for many years.

[@wendesa5143]

Do you need to use a professional tax preparer? I am using a bookkeeper and not sure I am reaping the rewards, not sure my taxes are being done correctly. Borrowed to invest in marginal account in 🇨🇦

[@JoJo-mw7gt]

Hi Thomas, thanks for your Video! If I borrow money to invest in dividends paid stocks, will it have any interest deduction? Thank you in advance!

[@ThomasCChan]

Yup that's one strategy 😃

[@honglim5536]

Great insights! Tq for sharing!

[@ThomasCChan]

Thanks for watching Hong! :)

[@neilwhite7116]

Great video. But I disagree on one item near the end of the video. I have a PLC (LOC) yes it fluctuates but I have used the entire amount every 4 months because I use this money in a Private Lending situation. Granted my LOC is at 5.55% my PL is returning me 12%. I collect the interest only per month and at the end the person or company I lend the money to gives me back my capital. 50% of the time the borrower also gives me a bonus amount of cash as a thank you. Meaning I will most likely go back to them to conduct more business. What are your thoughts on that?

[@user-vs1bh7dd8h]

Very informative! Got a question about the interest deducibility. The dividends generated from the investment, say if I use them to fund my retirement income stream (food, clothing etc), are the borrowing interest still deductible? Thanks!

[@ThomasCChan]

Hi C The dividend refers to the dividend generate by the stock companies. How you use it to fund your retirment is not revlant to the tax deductible 😊

[@user-vs1bh7dd8h]

@@ThomasCChan Awesome! Thanks Thomas. 😀

[@rosemariel.9000]

Hi Thomas. I have a non registered Margin account. If I borrow on margin to invest in stock, are the interest tax deductible if I do not sell my stocks. I do have earned income and already maximize my rrsp and tfsa. Thanks.

[@ThomasCChan]

Hi Rosemarie, it depends if your stock portfolio has dividend and interest income involved. if yes, then it's tax deductible. feel free go google line 22100 carrying charge

[@A-GoldenBar]

What about using the tsfa for investment loan?

[@ThomasCChan]

That will be a tfsa loan. Which is a principle plus interest loan Or you can use HELOC to invest in the tfsa. But you cannot deduct the interest

[@ashenafiamelehateye8808]

good job

[@ThomasCChan]

Thanks! (Sorry for the late reply!)

[@PapiLoveCrypto]

If btc drops below 20k i will be using this method god willing. Layer in and keep it in stable coins to gain interest higher than the interest charged while i wait for the best buying opportunity. Been thinking about this and the loan payments are 50% less than i have dedicated to invest so would be better to catch a great price immediately. Big scary move

[@gauravgav12]

Which financial institutions offer this borrow to investment program? I bank with simplii do thy have this program?

[@ThomasCChan]

There are handful of them. National bank Manulife bank etc etc If you are interested feel free to connect with us and we can explain the plans in detail to see if this really benefits or not? www.thomascchan.com/thomas

[@dheerajchidambaranathan]

The $1600 that Mary saved should only be added once to either the 4% or 6% or 10% and not to all of them since that's a one time credit for tax purposes right?

[@jennychoi8885]

Thaj you for the video

[@ThomasCChan]

Let me know if you have questions!😃

[@jennychoi8885]

@@ThomasCChan I actually do have a question. I do have 3 property and I have heloc that I can use. We both have pretty good income jobs, rental income. Three mortage are less than house value. So I decide to invest $100k to buy etf and stocks for the retirement. plan, at least more than 10yrs later. My friend worry about to use heloc to invest but through my research it will work. And also your vide gave me confidence. It is good idea? I don’t have any debt other than mortgages

[@ThomasCChan]

@@jennychoi8885 congrats with your solid financial plans. 1. Right now the cost of borrowing for heloc is around 2% meaning as long as your investment retuen is more than that. Then you are good 2. Plus you have a few properties at hand. So 100k will not affect your borrowing power in the future The semi down side is. In order to use the tax deductible part. Then the etf needs to yield a certain interest and fixed income. For details feel free to connect with the link above😃

[@jennychoi8885]

@@ThomasCChan Thank you for your reply. It means a lot to me:))

[@ThomasCChan]

@@jennychoi8885 good luck!

[@whoshotya117]

My head was bobbling around like a new born baby throughtout this video

[@ThomasCChan]

😂 is that a good thing?

[@whoshotya117]

@@ThomasCChan It was a joke to say that I was overwhelmed with numbers and wasnt understanding it. Im bad at math 😣

[@ThomasCChan]

@@whoshotya117 haha in a nut shell as long the return is better than the cost of borrowing, then leverage is a good idea

[@barneygaumer5024]

who offers investment loans for long term fixed income investments?

[@TshegofatsoTebogo-y8g]

I want loan to invest

[@dianzidan8754]

you need to adjust the content

[@ThomasCChan]

Hi Dian. Any suggestion?