Courtney Myers Blog | Four Ways to Invest, Even When Funds are Low | Talkmarkets

Four Ways to Invest, Even When Funds are Low

Date: Tuesday, August 28, 2018 7:30 PM EDT

Persons who are savvy with personal finance understand that to ensure long-term stability, enjoy their retirement years and grow their current income, it is wise to invest. As such, many become interested in the stock market either on the advice of their financial advisor, or by doing their own personal research into the topic. However, the reality is that though the economy is slowly rebounding, there are many still living paycheck to paycheck. How, then, can one find any surplus funds to begin a foray into marketplace investing?

The most direct route is to borrow money, which can be tricky and deserves its own conversation. For the most part, as long as the funds you borrow (known as leverage) are less than the returns you’re generating, you should be on the upswing. However, it can be all too easy to fall prey to borrowing schemes that leave you upside down on your loan and unable to pay it back. As such, if you’re considering taking out a loan, borrowing from friends or taking an alternate route to get the money to fund your initial investment, it’s important to know what you’re getting into. Here are four ways to borrow and invest successfully.

1. Start with a personal loan.

If you’re going to borrow to invest, one of the most direct and legitimate ways to do so is to take out a personal loan or even a line of credit from your banking institution. This way, you’ll have everything in writing, develop strict payback terms that will be more difficult to deviate away from, and will be more tightly bound to the terms of your loan than if you borrowed from a friend.

Keep in mind, however, that this can also be one of your most expensive options. The main reason is that a personal loan often carries with it high interest rates and other fees that can compound the initial cost. Specifically how much you’ll pay will depend on the amount of the loan you’re taking out, what loan type you get, whether or not you’re putting up any collateral, and your personal credit score.

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