Borrowing money to invest can help you grow your money, but it can also lead to losses. Here are the top three dangers:
- You can lose a lot of money. If some or all of your investments are lost, you still have to pay back what you borrowed.
- It costs more to invest. You don’t get to keep everything you make, because you have interest to pay on the loan.
- You may have some surprise costs. With some loans, the interest rate can change at any time. It may cost you a lot more than you thought to pay back what you borrowed.
Remember: The dangers of borrowing to invest are real.
Make sure you are ready to cover any losses with other savings.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.