How to borrow from stocks ( what are margins )
6.7 هزار بار بازدید -
4 سال پیش
-
I learned very early on
I learned very early on in life, that no matter how much you love a company, they are designed to look out for their best interest because everyone is in the business to make money and not lose money.
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1. How Borrowing money from a portfolio works ( basics)
- This is basically a secured loan
- Where your loan is guaranteed by your investments ( so if you cant pay, they sell your investment and take the money )
- Because its secured, the money you borrow is at a lower rate
So In simple terms:
- A margin account allows you to borrow money from your portfolio
- And the risk you take is that if you can't pay it back
- They sell some of your investments to go ahead and cover the cost or meet the maintenance requirement
2. Let's use a real example here
- I always learned best when looking at real examples with real numbers
- It helps make things stick
So here are my M1 finance accounts and they offer margins:
- There are three important things you need to know
- The maximum you're allowed to borrow against your portfolio
- Maintenance on the assets ( range from 25% low en to 75% high end if its more risky asset)
- Margins calls ( if your portfolio goes below 25% you to put in more money, or they start liquidating some assets ) |
Overall: the broker in this case m1 finance is going to make their 2% from you, plus never be at risk of losing their money because they can liquidate.
3. Margins Pros
- No paperwork
- No payment schedule
- 3 clicks to borrow (it's like amazon 2 clicks to buy )
- 2% interest rates
4. Margin cons
- Interest rates can change ( so you can go from paying 2% to double or triple who knows )
- Amplified loses and gains
- They have the right to change the maintenance
- They have the right to immediately sell your investments ( most just give you 1-3 days to cover it)
5. Overall Some people like to play this game
- But I don’t it’s a risky game
- And although you are limited with the money you have today
- Just start with that ( don’t at more complexity to the game )
Einstein says: things should be as simple as they could be but no simpler than that.
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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.
💲1 on 1 Talk + My Budget + Stock Investments💲
Patreon: tommybryson
1. How Borrowing money from a portfolio works ( basics)
- This is basically a secured loan
- Where your loan is guaranteed by your investments ( so if you cant pay, they sell your investment and take the money )
- Because its secured, the money you borrow is at a lower rate
So In simple terms:
- A margin account allows you to borrow money from your portfolio
- And the risk you take is that if you can't pay it back
- They sell some of your investments to go ahead and cover the cost or meet the maintenance requirement
2. Let's use a real example here
- I always learned best when looking at real examples with real numbers
- It helps make things stick
So here are my M1 finance accounts and they offer margins:
- There are three important things you need to know
- The maximum you're allowed to borrow against your portfolio
- Maintenance on the assets ( range from 25% low en to 75% high end if its more risky asset)
- Margins calls ( if your portfolio goes below 25% you to put in more money, or they start liquidating some assets ) |
Overall: the broker in this case m1 finance is going to make their 2% from you, plus never be at risk of losing their money because they can liquidate.
3. Margins Pros
- No paperwork
- No payment schedule
- 3 clicks to borrow (it's like amazon 2 clicks to buy )
- 2% interest rates
4. Margin cons
- Interest rates can change ( so you can go from paying 2% to double or triple who knows )
- Amplified loses and gains
- They have the right to change the maintenance
- They have the right to immediately sell your investments ( most just give you 1-3 days to cover it)
5. Overall Some people like to play this game
- But I don’t it’s a risky game
- And although you are limited with the money you have today
- Just start with that ( don’t at more complexity to the game )
Einstein says: things should be as simple as they could be but no simpler than that.
* PRO TIP*
INFORMATION IS EVERYTHING
👕Merch👕
https://teespring.com/stores/tommybryson
✅2 FREE AUDIOBOOKS✅
https://amzn.to/2Enayo8¬¬¬
💰M1 FINANCE $10💰
Link: https://m1.finance/fQsrul1PZcHM
🎁ACORN FREE $5🎁
Link: https://acorns.com/invite/38EYSU
⚡FREE KINDLE UNLIMITED⚡ (traditional reading)
Link: https://amzn.to/2VGbxt9
👨🏽💻DISCORD PRIVATE GROUP👨🏽💻
Discord: discord
My Camera Gear: https://www.amazon.com/shop/tommybryson
✔ Help Us Reach 300,000 Subscribers: https://goo.gl/0wvm6w
😎All My Social Media😎
Link: https://linktr.ee/tommybryson
*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.
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