Serious question on loan and investment

[Israelgogo]

Is it wise enough for you to use loan as investments, can you take the risk of using loan funds for investments. Even as much as business entails taking risk.

Should you be postive at this or think otherwise

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[Gosgosking]

It depends on the kind of investment,  in cryptocurrency we are advice not to take borrow money for investment because of the risk involved in it, the crypto market is unpredictable and anything can happen.
Collecting loans for business that the rate of running lose is not bad, most business men collect loan in the bank to support their business.

[Iadegbola34]

Taking out loans for the purpose of investing is great if you're investing in a very good businesses and not some volatile market like the Cryptocurrency market. It's never advisable to borrow to invest in crypto as you can lose your capital in a matter of minutes.

[dansus021]

this has already been discussed many times in bitcoin discussion or beginner & help. most of the answer is the same if you taking a loan for crypto is really not a good idea because of its volatility and in this current situation. but if you wanna take loan for your business that already run I think still to be good idea

[kudosinitchi]

If for business purposes, taking a loan for investment is not bad that is part of the business and there is nothing wrong with if you plan to start your business career. But, if the loan is for crypto investment, is not a good choice because of its volatility. The current market is not good though, it is good to buy while its dip, but you should think and consider the bad consequences.

[Masplanc]

If for business purposes, taking a loan for investment is not bad that is part of the business and there is nothing wrong with if you plan to start your business career. But, if the loan is for crypto investment, is not a good choice because of its volatility. The current market is not good though, it is good to buy while its dip, but you should think and consider the bad consequences.

Aside cryptocurrency because of how volatile the market is that makes cryptocurrency to be risky,  even if you want to loan for business outside cryptocurrency you need to consider the risk in it . If it is a business that has no much risk in it, because of the lack of funds of starting business a loan can be taking.

[Queentoshi]

Is it wise enough for you to use loan as investments, can you take the risk of using loan funds for investments. Even as much as business entails taking risk.

Depends on the kind of investment you hope to pursue with the borrowed funds. If its a business form of investment, you should know that some businesses take out loans to either expand or start up new ventures that they are certain will be profitable and an amount they can pay if things don't go as planned. For you who may not be able to pay back should your investment not go as planned, it is a bad choice to borrow money or take a huge loan for the purpose of investment.

[philipma1957]

Is it wise enough for you to use loan as investments, can you take the risk of using loan funds for investments. Even as much as business entails taking risk.

Should you be postive at this or think otherwise

It depends. If I borrow at 3% and invest at 9% its pretty smart.

In Jan 2022 you could get 3% loans in the USA.

In April 2022 you could buy 9% I bonds in the USA.

Also if your house mortgage was 6% and was for 230000 when you refinanced it Jan 2022

For 3% and 250000. you pay off the first mortgage and have 20k for those i bonds.

It would have been stupid not to do it.

deals like this do turn up.

[Cryptoababe]

I will never advice anyone to take loan for a risky business.
Even sure business is Risky to take loan for talkless of Risky business. And even most loan companies will take profit so the best advice I can give is to take loan for a very sure business or better not even going near any loan.
We all know that taking loans can leads to loosing more properties and can make one end up homeless.

[franky1]

if you do not have any spare fiat money to start.
where one-three missed repayments can cause problems. NO dont use loans

if you have the fiat to just pay off a loan in full worse case.. but you just dont want to use your money upfront to buy something big. then sure use a loan.

the original idea for loans, was that when a business had $XX cashflow to buy $XX stock/product to sell for next season, to then profit..$XZ
but then had to buy a large item mid season for $XX. taking that cashflow out of stock supply (to buy the large item) then destroys future profits.. by not being able to buy stock/products ready for next seasons sales

so businesses would take a loan for $XX. to buy the large item. whist still having $XX cashflow to buy stock/products to continue to make $XZ income.
where by the loan amount is then spread out as conveniently small $C repayments that dont affect the cash flow(product purchase for next seasons sells) $XZ
and then the new product also has potential to grow even more profits than the current $XZ
..

however if you have no spare cash to generate new bigger amount of cash to cover the new higher outgoing(repayment).
and the limited income you do get to cover current costs means you cant spare anything
then taking out a loan which then reduces how much income you can spend on the normal stuff you spent before.
is a downward spiral
..
only use a loan if:
1. you can ALWAYS afford to pay it off.. (no "maybe if i change this or do that i might afford")
2. the late payment fee's or interest rate is not going to cause later problems for you in  a snowball affect(use only low interest/low fee rate loans)
3. if you lose any current cashflow/hoarded vale preloan. and the investment using the loan then tanks.. you still have income to pay off the loan without devastating your life

if you are thinking "take the risk because its a sure thing to stand on a cliff and hope the wind doesnt blow you over the edge" where you naively think it can only go on one safe direction.. dont risk it. especially if you have no back up if things go in the wrong direction, because you are already at a cliff edge. hoping not to be blown over

take microstrategy
they have (well more so than this) $190m spare cash to do normal business stuff
they also had $205m of assets(well more so) to use as collateral to insure the loan. as a double protection to know they can safely pay off the loan in any case.

but instead of spending $190m of their own business cashflow. they took a loan for $205m, backed by their existing assets. to then buy $190m of new assets

whereby the repayment interest for the year was $8m. meaning the spare $15m would cover the first years interest in full plus X amount of months of first repayments.

thus no need to touch any of their (preloan) money/assets for a while..

yep
even though their new asset purchase of $190m of coin bought at $30k each. is now priced as $20k each..(valued at $126m total)
MS still has not needed to touch the backed asset collateral, nor its own regular business money on repayments. thus no loss even when the new asset price has dropped 33%. so not needed to even sell any of the new assets, thus no real world loss of the new assets, because there is no need to spend them(you dont lose until you spend at a loss)