I'd like someone with viable business knowledge and experience to answer this question please?

Im 17 and I wish to take out a loan from a bank at the lowest interest rate I can get, and then invest this money and in a low to medium risk company with a higher rate of return than the bank loan in order to shrink the size my student will become over the next few years as I am about to start my university studies. Although I am aware of the risks, I am still unsure: is this a reasonable idea? At my age am i playing with fire?

I%26#039;d like someone with viable business knowledge and experience to answer this question please?title loans

The majority of posters are correct. I wouldn%26#039;t do it. First, you%26#039;re 17 years old, no bank is going to make a loan to a minor. If a minor did sign a contract, it%26#039;s a voidable contract at the discrepency of the minor. Not good business.

Second, you should never investment money you can not afford to lose. It should never be borrowed money. If you lose it, you are now in debt and must pay it back. If it%26#039;s money that if lost would hurt you financially, then don%26#039;t do it. It should only be money that if you lost it, it wouldn%26#039;t affect your financial standing.

The poster that said invest in the stock market is telling you to play with fire. First, how much do you know about stock investing? The Harvard School of Business released the data on a study of how many people lose money in the stock market. Know what the percentage is? 90%. That is 9 out of 10 people lose money equities. Not because they%26#039;re bad, but because they don%26#039;t know how to trade. There is a learning curve in trading that can take several years to perfect. Also, the closed end fund that invests in mortgages, before you go and do that, pay attention to what%26#039;s happening in the housing markets. I don%26#039;t think investing in mortgages or mortgage-backed securities is the wisest thing right now. Don%26#039;t take my word for it, just look at what%26#039;s happening to the R.E. market. It%26#039;s not good.

It is indeed possible, that%26#039;s what the carry trade is all about. Up until a short time ago, the interest rates in Japan was 0%. This caused the Yen carry trade to flourish. People would borrow Yen at 0% interest and then invest the money in bonds in a country with a higher rate of return, like in the U.S. were rates were 4% and higher. The problem now is that the BOJ has begun raising their rates. This should impact the carry trade as 1) the closing of the rate gap and 2) the strengthening of exchange rate of the JPY relative to the USD would cause investors in the carry trade to lose money.

Anyway, what you%26#039;re prosposing is very risky. You are borrowing money at a fixed, definite rate and invest it in a product that may or may not give you the kind of returns to service the debt leaving you with a net positive return. See the inherent danger?

I personally think you are playing with fire. Any negative move in your investment vehicle, relative to your loan could be catastrophic.

I%26#039;d like someone with viable business knowledge and experience to answer this question please?

loan

I%26#039;m assuming you are talking about a corporate bond b/c you seem to know the rate of return. If I were making the decision it would depend on the size of the loan and the length of the bond. I wouldn%26#039;t do it. but its up to you. Of course any company can fall from grace rather quickly ( Enron, Delta). So be careful and be aware that if they default on the bond then you owe the entire loan amount plus interests.|||Unfortunately it does not work like this or else everyone including the bank would have done the same. There is a element of risk in every investment and no returns are guaranteed but your bank repayments and interest are to be paid for sure. So if any one is giving you ideas, stay away from it.|||You can borrow money from the bank and make money in the stock market at a higher rate than the cost of the loan(s). There is no argument against it. (That the banks don%26#039;t do it doesn%26#039;t mean it cannot be done. Banks have strict regulations. Period.) The loan rate must be below 10%.

The trick is to get a reasonable spread between the rate on your loans and the return that you can expect from your investment. You must accept medium risk, at the very least. Meanwhile, you can manage that risk with the help of an advisor. Why? Depending on the size or your invesment you can manage your investment and receive an average annual return of 14% or better year after year, paying roughly 1.5% to an advisor.

I will give you a hint for free. There is an investment that is seldom advertised or promoted. It%26#039;s call %26quot;closed-end fund%26quot;. Right now, I have several clients who are either paying off loans or anticipating a loan, and they are getting 12-16% on their investments. One such fund, listed on the NYSE, is called the American Strategic Portfolio. It invests in mortgages. The fund is expected average 15% per year for the next twelve months. We will make adjustments and changes when the performance starts to go down.

You cannot proceed with this strategy with your eyes closed. Yes, it definitely can be done.

Hawk|||If you invest in a low to medium risk company you will get low to medium rate of return and you will lose money.

On the other hand, if you invest in a high risk company you will get a high interest rate of return and you will become a millionaire eventually.

If you bet the wrong way then you will die broke.

Donald Trump does exactly what you are trying to do.

NOTE: He is broke.

I suggest you to finish college and then get an MBA and then you will make at least $100,000.00 USD per year and you will be a millionaire in less than a decade.

You are supposed to invest your own money.|||Your plan won%26#039;t work, since Banks are smarter to not to offer loans at lesser rates than what you will gain from stock market or bond market. The few types of loans are term loans, compensating balance loans etc; which are given to businesses at higher interest rates. Personal loans are given only to professionals with established credit history and there is limit to this depending on your ability to pay back. You don%26#039;t even have a drivers licence or a ss card to prove your identity. Then how can you open an account in the first place. So forget it, if it was so easy then many would have followed your path much earlier.

What you are trying to play is what high ended Finance Professionals do in other markets, playing on the spread differentials. When you go to University and learn if you happen to take some business level courses in Finance you can get a feel for it. For the time being forget it.