Conference nyoss1::market_investing

    
    The "broker's call" loan rate is currently 5.25%, and margin interest
    is easy to justify as a tax deduction -- sounds easier to me.
    
    And, of course, throwing darts could have earned 15%/year over the 
    last few years -- be careful when investing with borrowed money!
    

    
    > The "broker's call" loan rate is currently 5.25%, and margin interest
    > is easy to justify as a tax deduction -- sounds easier to me.
    
    Yes.  But, you have to have some value in your account before they will
    lend you money through your margin account.
    
    re: .0
    
    Make sure that you are aware of any fees they charge you on your cash
    advance.
    
    Dennis
    

    I checked and there are no fee's for cash advance. If anyone is 
    interested I can post the 800 # for the card?

>    Is anybody else playing games like this out there??

In "games", a high element of risk is the default.  I try to avoid gambling
unless the odds are stacked heavily in my favor.  When dealing with borrowed
monies, you start out with the odds in someone else's favor. 

A good friend borrowed $5k to invest in a stock that was showing a consistent,
steady upward growth including recent "split" activities; rumor (and evidence)
was that they were about to split, again.  He was close to the development
plans and schedules of new products and so was able to form an educated opinion
about the future growth prospects.  So he borrowed his $5K - again, against my
advice - and purchased DEC at $199.  Sigh..... fortunately, we remain friends. 

I can think of other strategies at this time that might make more sense.

    The # to the 5.9% visa till May of 1995 is  800-352-9995.

    
    my 2� on this is that borrowing is fine if and only if you've
    carefully designed a portfolio with less than ordinary risk.
    
    e.g. if you have a portfolio with � the risk of an index
    portfolio that gets 3/4 the return, then borrowing money
    makes perfect sense.  That's the way hedge funds are supposed
    to work (though there has been much discussion of late that
    this is not how they have been operating recently).
    
    /jim

    Am I the only one that thinks this is a very bad idea.  Sure, we all
    could have made big bucks doing this at one time or another, but if
    I have done the below table correctly, this is a big risk to make a
    couple of hundred bucks.  Why not just have a yard sale?
    
    Note:  Assumed 28% fed bracket, Mass 12% unearned income bracket, 
    not offset by other losses.  Ignored commissions, loads, or fees, 
    and assumed investments were taxable.

    
Invest	Return	Gain	28%Fed 	12%MA	Cost of	  Net
                        Tax     Tax     Money    Gain

$6,500 	4%	$260 	$73 	$31 	$384 	($228)

$6,500 	6%	$390 	$109 	$47 	$384 	($150)

$6,500 	8%	$520 	$146 	$62 	$384 	($72)

$6,500 	10%	$650 	$182 	$78 	$384 	$7 

$6,500 	12%	$780 	$218 	$94 	$384 	$84 

$6,500 	14%	$910 	$255 	$109 	$384 	$163 

$6,500 	16%	$1,040 	$291 	$125 	$384 	$241 

$6,500 	18%	$1,170 	$328 	$140 	$384 	$319 

    re: .8
    
    Your numbers are off.  Investment interest can be deducted against
    investment income, which improves the tax picture considerably.
    
    Not that I want to suggest that people, in general, borrow money to
    invest with.

    re: .8
    
    I also agree with .9 that "interest expnses" are deductible.  To me
    this is no different than buying stocks on margin.  The real question
    is how comfortable are you about investing with borrowed money?
    
    The answer is simply a matter of risk/reward.  Afterall, the company
    that is lending you money is taking a risk (you will have bad credit if
    you default), we also borrow money to buy a house, that is a risk we
    are taking.  Granted investing in stocks has a higher risk.  On the
    other hand I guess if you are comfortable with the risk you are taking
    then investing with borrowed money is a good idea.
    
    My other $.02 is that 1994 will be a choppy year.  If you are a trader
    and are lucky to be on the right direction (short or long) you have the
    opportunity to make a good sum of money.  Otherwise be very careful and
    don't buy anything without have a "stop loss" strategy.
    
    Good luck,

   Re .0:

   Take two aspirin,
    pull down the blinds,
     crawl into bed, and

      STAY THERE

   until this fever passes.

   /JRH

    Why just play with $6500.  Do it by applying for two to three cards. 
    If you have a confidence level of 15% then play your cards to make a
    decent dollar amount - not just $200-$1000.  
    
    I play with borrowed money all the time - but I do it with bigger
    dollars and return the money within 10-60 days and keep the change - I
    am doing the same thing you are planning to do but rolling it over many
    times a year - it's worth that kind of playing.  
    
    And, yes for someone who does not have the confidence to make the
    HIGHER Returns - It is a bad bad bad idea.  This is not everyones cup
    of tea.  
    
    Again play with WHAT YOU CAN AFFORD TO LOOSE - Invest the MONEY that
    YOU need in the future. 
    
    That's my 2 pennies....
    
    Ken
    

    I agree with .12
    
    I have a signature line of credit of 14K that I can borrow and invest. 
    I can pay it off in 30-60 days without paying very much interest and
    take the profits and put them in my pocket.
    
    I have just started using this approach, I also am using my savings to
    stay in the market and I am doing very well.  
    
    I don't know what the tax consequences are yet, but I do know that I
    could stand to lose money (capital loss) because of having to pay taxes
    each year so I am not to worried about losing money that is gone
    already.
    
    Todd

    OK, did anyone really borrow $6500 at 5.9% last year, payable next
    month, and invest it?  In hindsight, it was a perfect plan :-)
    and you're most likely sitting on a nice return.
    
    If so, what did you invest in and are you thinking of selling now to
    lock in the profits, even though you have a couple of weeks left?
    
    And, did you pay/deduct interest or receive/pay_tax_on dividends and
    capital gains distributions for tax year '94 on this scheme?

	Does this count?  When I re-financed Oct. 1993 I did what they
	call a "cash-out" in that I re-financed for a larger principle
	amount than what was owed on the previous loan.  That money
	is now in the market, and since it's interest on my principle
	residence, I get to deduct the interest.

	I tried to lock in my profit on US Air last week when it peaked
	at 6.5 but it retreated some to 6 so I'm still sitting on it.