[M2inOR]

Margin loans to finance investments is a strategy I used in the past, but beware of "black swan" events.

When you are highly leveraged, events like the 9-11-2001, 2007-8 recession, and March 2020 pandemic lockdown start will strike you quite hard.

I was leveraged in the late 90s, and was hit hard by 9-11. I unwound everything, and avoided margin ever since. Fully recovered since then, and did not sell since, surviving the other events mentioned above by staying fully invested.

A friend, unfortunately, did not and despite my warnings, was heavily leveraged with margin loans but had no downside protection (options). March 2020 almost wiped him completely out, but he lost millions.

He used margin loans for living expenses. He did not want taxable income, and this was his way of building wealth. March 2020 led to daily margin calls. I'd did not help that his investments were also leveraged ETFs - one being an ETF that was a 3x DOW ETF - if DOW went up or down 100 points, it was as if his ETF went up or down 300 points.

If all this is Greek to you, and you don't understand using options to protect your investments, you probably stay far away from margin loans to leverage your purchase power, or pay for your lifestyle.

My only adventure these days are to take advantage of low or 0% interest rates, and keeping funds invested that payme a higher interest rate. Arbitrage...