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04-09-2010, 03:15 PM
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#1 | | I answer every Emotion with an emoticon
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| Is it a good idea to ask for a line of credit even if you don't need to money?
Is it a good idea? I mean harder to ask the bank for money when you need it than ask when you don't need it.
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04-09-2010, 03:39 PM
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#2 | | Revscene.net has a homepage?!
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it is always good to have a line of credit that is available
especially if you have good credit or establishing credit and low interest rate at the time
even though you don't use it, it can be an emergency fund just in case
currently i borrowed 10K to fund my tfsa buying stocks etc
but i do have 10k in the bank but i rather borrow bank money cuz i'm just paying $1 day in interest and my return is unlimited cuz i'm leveraging
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04-09-2010, 03:57 PM
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#3 | | I answer every Emotion with an emoticon
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Originally Posted by hirevtuner  it is always good to have a line of credit that is available
especially if you have good credit or establishing credit and low interest rate at the time
even though you don't use it, it can be an emergency fund just in case
currently i borrowed 10K to fund my tfsa buying stocks etc
but i do have 10k in the bank but i rather borrow bank money cuz i'm just paying $1 day in interest and my return is unlimited cuz i'm leveraging | Yea, that's what I was thinkig too. Interest rate will go up anytime soon and it seems like a good idea to get it now than later
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04-09-2010, 06:23 PM
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#4 | | Revscene.net has a homepage?!
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i'm not giving specific advice or what not, i would look into a dividend paying stock for cash flow...i guess to help payment on interest charges, in essence, it is like getting free money after commissions, and other fees
rmb, tfsa when I actually cash out, i don't pay taxes...just do yout due dilligence
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04-09-2010, 09:04 PM
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#5 | | Wunder? Wonder?? Wander???
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You can only contribute $5k/year to a TFSA. Any income/interest earned on contributions > $5k/year are fully taxable.
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04-09-2010, 09:38 PM
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#6 | | Rs has made me the man i am today!
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| Quote:
Originally Posted by hirevtuner it is always good to have a line of credit that is available
especially if you have good credit or establishing credit and low interest rate at the time
even though you don't use it, it can be an emergency fund just in case
currently i borrowed 10K to fund my tfsa buying stocks etc
but i do have 10k in the bank but i rather borrow bank money cuz i'm just paying $1 day in interest and my return is unlimited cuz i'm leveraging | Question for you: why do you care about your return %?
If we both have a gain of $1000 in 2009, but I used $1000 of capital and you used $100, aren't we still the same in the end? Except you have to bare interest charges?
However, I do understand your point...with my $1000 capital, I could have gained $10,000.
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04-10-2010, 10:10 AM
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#7 | | OMGWTFBBQ is a common word I say everyday
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^interest on money used for investment is tax deductable
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04-10-2010, 01:32 PM
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#8 | | MiX iT Up!
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| Quote:
Originally Posted by hirevtuner it is always good to have a line of credit that is available
especially if you have good credit or establishing credit and low interest rate at the time
even though you don't use it, it can be an emergency fund just in case
currently i borrowed 10K to fund my tfsa buying stocks etc
but i do have 10k in the bank but i rather borrow bank money cuz i'm just paying $1 day in interest and my return is unlimited cuz i'm leveraging |
black or red.  keep that in mind to whoever goes with this advise.
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Make the effort and take the risk..
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04-10-2010, 07:26 PM
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#9 | | Revscene.net has a homepage?!
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Originally Posted by waddy41 Question for you: why do you care about your return %?
If we both have a gain of $1000 in 2009, but I used $1000 of capital and you used $100, aren't we still the same in the end? Except you have to bare interest charges?
However, I do understand your point...with my $1000 capital, I could have gained $10,000. | well, i'm just saying that I used bank's money to work hard for me (free money) assuming that you know what you are doing
it just means that I have extra $900 freed up to use for what I please, while you have $1000 stuck in something
but again, it is merely an opinion, not advice
always like extra info so we can all learn from it
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04-10-2010, 09:14 PM
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#10 | | Everyone wants a piece of R S...
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LOC or even better HELOC is useful in the event you wish to finance anything (car,boat)
way better % rate.
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04-12-2010, 04:13 PM
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#11 | | I answer every Emotion with an emoticon
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My finance prof told us to ask for a line of credit and invest in bonds. Say if u can have a line of credit for 3% interest but the bond pays 5%, u'll make money with money u don't have. Of coz the pre-requisite is that u can find a LOC that has a lower interest than the return of the bond. Is that sound advice?
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04-12-2010, 10:41 PM
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#12 | | MiX iT Up!
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^ and as soon the feds increase interest rates, bond yeild will drop and u will be fucked.
sounds like sound advice to me.
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Sometimes we tend to be in despair when the person we love leaves us, but the truth is, it's not our loss, but theirs, for they left the only person who couldn't give up on them.
Make the effort and take the risk..
"Do what you feel in your heart to be right- for you'll be criticized anyway. You'll be damned if you do, and damned if you don't." - Eleanor Roosevelt | |
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04-13-2010, 03:49 PM
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#13 | | I answer every Emotion with an emoticon
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Originally Posted by tiger_handheld ^ and as soon the feds increase interest rates, bond yeild will drop and u will be fucked.
sounds like sound advice to me. | That is if u sell the bond. If u hold till maturity, u'll still get the coupon rate.
That leads to another question, is the rate on LOC fixed or variable? Or does it vary case by case
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04-13-2010, 03:56 PM
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#14 | | Revscene.net has a homepage?!
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for me, getting LOC from Ing is prime rate plus X% so when prime rate goes up/down then it changes
i think my rate is under 4% but will go up soon cuz of rates going up
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04-13-2010, 04:12 PM
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#15 | | I answer every Emotion with an emoticon
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| Quote:
Originally Posted by hirevtuner for me, getting LOC from Ing is prime rate plus X% so when prime rate goes up/down then it changes
i think my rate is under 4% but will go up soon cuz of rates going up | hmmm, in that case if I do wut my prof said, i'd be in a hole when rates go up. It's only good if rates have a downward trend. Good to know
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04-13-2010, 08:59 PM
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#16 | | Everyone wants a piece of R S...
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Originally Posted by q0192837465 That is if u sell the bond. If u hold till maturity, u'll still get the coupon rate.
That leads to another question, is the rate on LOC fixed or variable? Or does it vary case by case | rates on LOC can be fixed depends on your standing with the bank, my parents have a fixed LOC.
as for your bond argument... Bonds have a long maturity date.. are you prepared to wait that long? Also I'm assuming you are young, so I don't think you have enough LOC to enjoy the %
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04-14-2010, 03:17 PM
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#17 | | I answer every Emotion with an emoticon
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Originally Posted by no_clue rates on LOC can be fixed depends on your standing with the bank, my parents have a fixed LOC.
as for your bond argument... Bonds have a long maturity date.. are you prepared to wait that long? Also I'm assuming you are young, so I don't think you have enough LOC to enjoy the % | Yea, actually, the case my prof used was i think from 6 months ago when a bank, BMO i believe, offered a 6% bond. What he said he did was to borrow from his LOC and bought those bond. His LOC prolly had pretty low interest back then so he's enjoying a pretty good return from money he didnt have. He argued that even though the net return may be just 2-3%, it's 2-3% that u otherwise would not have.
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