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In the same vein, Interactive Brokers will give you 3.26% on a margin loan if you have over 100k in your account. At rates like that you're better off capitaliz
by User23 7y ago
In the same vein, Interactive Brokers will give you 3.26% on a margin loan if you have over 100k in your account. At rates like that you're better off capitalizing the interest and letting the securities you bought on margin appreciate. Obviously don't do this if you don't know what you're doing, but it's actually perfectly safe with a proper options hedging strategy that ensures you don't get a margin call.
To be clear this isn't financial advice, just an observation about what many people are doing due to the low rate environment.
- cobookman 7y agoIt’ll be interesting if rates ever do rise. Right now you might as well buy a house just cause. At 3% interest. It’s basically free money. Especially if you view inflation at 2%. Plus rental income and property appreciation. Why not?
- charlesdm 7y agoBecause it can go down in value. Plus purchase and annual taxes. But yes, mostly correct. I don't really see rates rising in a long time.