Borrowing to gain



  • Has anyone else looked into a personal loan to invest in the index. There's a few loans out there around 3% per year for up to 20k.
    Has anyone else done this, worth the obvious risks?



  • @Gawa i've seen a few people debate this before. I will tell you what i've told them all. Don't gamble what you can't afford to lose. If you feel you could afford to lose 20% of the loan then could be an option.



  • Madness in my opinion.

    What would happen if the Index went bust???

    What if you had a bad run of luck with your players???



  • Of course there are many risks with it, just wondering what people's thoughts are on the risk v reward.



  • Change of topic but is your user name short for Green and White Army??



  • A very slippery slope. Don't do it.



  • @Comrade yep, an ulster boy





  • @NewUser148487 good idea, less risk, nothing to pay back





  • Not sure what would raise more cash, my kidney or my hairy butt hole.



  • The problem with 'profits' on here is when do users actually realise them? At what point do they become cash in the bank? If you took a loan with a yearly interest rate, would you be prepared to take it all (or a very large chunk) out and pay off the loan before the interest escalates, despite the potential future gains). There's upward and downward trends here so when would you sell, and is that it after a year, or would it be the start of a vicious cycle? Not trying to dismiss the idea, just a few questions that I would be asking myself. Also, if you ever come to a point where you need to explain what the loan is/ was for (for a mortgage application for example), are you confident to say you are using it for FI and then trying to explain what it is.

    As Noir said, investing a fraction may be an option, but think carefully before you make any decision and only what you can afford to lose.



  • Unnecessary pressure could turn into a nightmare. Put your spare money in and build from what you can afford to lose. If you can't win with small, how would you win with big? Most new users are being hit with reality checks and learning curves. If you have a spreadsheet etc, check out your ideas with no money!



  • @Gawa Hi, I have read other people's comments and they don't seem to have the experience of actually having done this. I can tell you myself personally that I have.

    March 25th I took out a bank loan of £8,000, of which I owe £10,000 (£2,000 is interest) back. I have put it all into the Index along with £3,000 of my own money. My portfolio is £18,000 now, from £11,000 deposited. I only owe £7,500 back to the bank at this point now.

    For me it has been worth it. Yes, I realise the interest rate is high on my loan but Halifax was the only bank that would lend for gambling purposes, and that much money.

    I would do it myself and take the risk of a loan, but it is up to you. FI is only going to get bigger and bigger and you are 99% likely to succeed and make profit.

    Good luck.



  • @HappyLarry59855 You told the bank you were borrowing money to gamble?



  • @metropolis Each bank outlines what you can and can't borrow the money for in the loan agreement. If you're going to borrow for gambling you have to be careful which bank you borrow from and read the contract.



  • @Ollie that's a really good idea. Have a practise spread sheet. Think it would be good for FI to have dummy accounts.



  • On the repayment point, because it is a very good one. So difficult to realise the profits and withdraw them at the right times i.e. that golden window of time when a) cash is needed to service the loan and b) the market is in an upward trend.

    Point b) is key really, as the index peaks and troughs in very short term - a PB centric portfolio will likely start to dip on a Monday and start to rise on a Thursday. Even more so if you've had a rotten weekend. Equally if you are invested in non-MB players, your portfolio may have seen a bit of a dip at the end of last weekend and you might have to wait for another 5 days before it begins to rise back to where it was before. Before you even take into account the sporadic withdrawal times (two withdrawals this week took ONE day!! Crazy fast as I have often waited the full 5 days of the 3-5 working days that they advise).

    On a personal note I did take out a £7k loan in March to put together a beastly portfolio (it is on my Twitter somewhere... here it is https://twitter.com/Pierre_FIndex/status/975833269760610307).

    It was a 1 year loan at 3%ish and so repayments were about £600 a month. I just withdrew dividends, averaging about £200 a month and the rest was made up of income that I would otherwise have put in the index anyway. I just jumped the queue and got in there early.

    That made sense me, and my circumstances. I could afford to pay £500 a month off that loan and £7k borrowed, repaid within 12 months, was fairly low risk. I paid off a big chunk when I realised profits before the end of the season (selling the likes of Werner, Muller, SMS etc. before they took a dip) and managed to pay it off quite quickly. My portfolio is now worth a whole lot more and it turned out to be a good decision.

    Would I do it now, with the market as it stands? Less likely for sure as the dividend yields are lower (I had Ronaldo at £7, Salah at £6, Messi at £9, bought Pogba not long after for £5.50ish). I also have my first kid on the way (6 weeks today!! Fuck!) so couldn't really justify having to fund the shortfall each month.

    If you aren't 99% sure it's a good idea, planned for how you will fund it, got a robust strategy for what you'll do with it, prepared to just bloody sit on it as much as you can without overtrading etc. etc. then don't do it.



  • @HappyLarry59855 If you put 11k in in March shouldnt you have put in total 22k?

    https://forums.footballindex.co.uk/post/16498



  • @HappyLarry59855 said in Borrowing to gain:

    @Gawa Hi, I have read other people's comments and they don't seem to have the experience of actually having done this. I can tell you myself personally that I have.

    March 25th I took out a bank loan of £8,000, of which I owe £10,000 (£2,000 is interest) back. I have put it all into the Index along with £3,000 of my own money. My portfolio is £18,000 now, from £11,000 deposited. I only owe £7,500 back to the bank at this point now.

    For me it has been worth it. Yes, I realise the interest rate is high on my loan but Halifax was the only bank that would lend for gambling purposes, and that much money.

    I would do it myself and take the risk of a loan, but it is up to you. FI is only going to get bigger and bigger and you are 99% likely to succeed and make profit.

    Good luck.

    You need to bear in mind that you did it during the probably the biggest boom period in the index's history. Will the next 6 months replicate that ? Probably not unless there is a dividend rise which is out of our hands.

    Personally my advice would be if you are prepared to stretch yourself. Cut down your personal bills and try and save £500 a month and put that instead of borrowing the money. If you can't save the money yourself then you can't afford to lose it.


Log in to reply
 

Looks like your connection to Football Index Forum was lost, please wait while we try to reconnect.