Comments on: Leveraging Your Investments

By: This and That: Dragon Profiles, the Pain in Spain and More… | MoneySense

This and That: Dragon Profiles, the Pain in Spain and More… | MoneySense — Fri, 19 Mar 2010 17:08:19 +0000

[...] Gail Vaz-Oxlade wonders if many investors who are leveraging to invest have Clue One about the risks they are taking. [...]

By: This and That: Dragon Profiles, the Pain in Spain and More… | MoneySense

This and That: Dragon Profiles, the Pain in Spain and More… | MoneySense — Fri, 19 Mar 2010 14:31:34 +0000

[...] Vaz-Oxlade wonders if many investors who are leveraging to invest have Clue One about the risks they are taking. Post a [...]

By: This and That: Dragon Profiles, the Pain in Spain and More… | Canadian Capitalist

Fri, 19 Mar 2010 03:42:28 +0000

[...] Vaz-Oxlade wonders if many investors who are leveraging to invest have Clue One about the risks they are taking. Post a [...]

By: Financial Coach

Financial Coach — Fri, 05 Mar 2010 01:19:27 +0000

@ Stephanie – using leverage to buy anything has both risks and rewards. I’ve personally used my property to purchase real estate and we’ve done really well. The key for us has always been buying really good properties at a discount where we can demand the rent that we need to cover all overhead expenses. Just understand that the numbers will only work for you if you have consistant rental income, some tenants are not that great.

By: Jason

Jason — Thu, 04 Mar 2010 11:49:57 +0000

Lveraging investments and margin calls were what was responsible for the roaring 20s and the great depression of the 30s. everyone got into leveraging and look where it got them.

I won’t use leveraging simply because it opens us to more risk and I think in the end the Tortise won the race. I can continue to have my money trickle into my retirement accounts a bit at a time just to make it all work.

By: StephanieB

StephanieB — Thu, 04 Mar 2010 00:16:42 +0000

Hi Gail,

Tks for this article…I do have friends that have contracted those type of investment debts, so far not many have much to brag about.

HOWEVER, what if we do it for real estate investment. Compared to the stock market its easier to understand and you have more control on real estate investment. Do you think its a good idea if we were to leverage on our home equity to buy another house or apartment building?

By: Sarah

Sarah — Wed, 03 Mar 2010 23:16:46 +0000

We leveraged last year because we thought we were coming into cash that ended up not happening (long story). We took out a $20,000 loan in invested in Apple in our RRSP. We bought at $96 a share and sold at $204, putting that money into a more reliable investment. With what we got back from our taxes we paid out most of the loan, and have nearly paid off the rest over the year.

Our investment is now worth over $44,000, we have $3,000 owing on it, and we have paid appx $900 in interest. So we’re way ahead – but how often are you right about stuff like that? I don’t think I’d risk it again – too scary.

By: *pol

*pol — Wed, 03 Mar 2010 20:30:44 +0000

I never want to risk more than I am willing to lose. Which means I don’t take many risks! Which means of course the gains I set up for are safe and small too.

I just hope slow and steady wins the race for us!!!

By: Amber

Amber — Wed, 03 Mar 2010 19:54:42 +0000

I got burned on a leveraged investment. In the end we were OK, but after doing that I don’t think I would take the risk again, myself. I am just not a big fan of the gamble.

The thing that irked me the most about the whole thing was that the investment adviser who suggested the leveraging scheme still got paid. She collected her $5000 fee even when losing us tens of thousands of dollars, and she didn’t even apologize. I get it, I went in with eyes wide open and I paid the price. But the whole thing reminded me that I can’t trust someone else to have my best interests at heart. She doesn’t lose out on her fee if her advice proves faulty, or the market tanks, or the loan I took out for the investment gets recalled.

By: Tara

Tara — Wed, 03 Mar 2010 19:20:55 +0000

Debt is risk – why on earth would I want to put my house at risk for an investment gamble? Totally insane. I would never consider it.

By: Anne

Anne — Wed, 03 Mar 2010 18:32:20 +0000

No wonder I don’t have any investmenets or haven’t any of what Gail says because I don’t understand it. I am very well educated but no matter how many times it has been explained I still don’t understand. I seem to have an investment/economical mental block. It has never been explained simple enough for me. Everyone expects me to have a basic knowledge which I don’t. What is “leverage”, “margin”, or “smith maneuver”? Because I don’t fully understand investing, or simple financial terms, I keep as far away from anyone trying to get me into any of this. That way I can’t get into trouble. I know this might not be best but until I really understand it I will stick with my savings accounts. I wonder if there is an Investment for Dummies book – I could sure use it or maybe not…..

By: tlily

tlily — Wed, 03 Mar 2010 18:21:48 +0000

Gail, you appear to have a dilemma – you have trained many people so well on the basics of paying off their debt and saving that they are ready to learn about more complicated investment strategies. On the other hand, you probably still have alot of new people coming in to the site (especially since they just started airing your show in the States) and these people still need the basics. That’s an interesting position to be in.

By: Amelia

Amelia — Wed, 03 Mar 2010 17:35:05 +0000

I also would love to hear more about investing. Gail, you do have a gift for making it understandable.

By: Shannon

Shannon — Wed, 03 Mar 2010 17:06:50 +0000

I’m with Kate…I’d love to see more articles about investing…especially for beginners who are just recently saving and starting down that road. Thanks again for another great blog!

By: JMC

JMC — Wed, 03 Mar 2010 16:57:07 +0000

My apologies – it’s greaterfool.ca