This article was inspired by a marketing email I recently received from Wealthsimple. The subject line read: " Coming soon: margin trading ". The email goes on to say "Margin trading can help you boost your buying power by borrowing against your portfolio. Applying for your account is fast, hassle-free, and there are no hidden fees. Best of all, our margin interest rate are as low as prime - 0.5% — lower than what you’d pay at your bank." In fairness to Wealthsimple, the email further explains what margin trading is, how it works, and what some of the risks are to using margin. It really got me thinking more about margin and leverage and especially the surprising findings regarding who can benefit the most from using margin and leverage. What is Margin and Leverage? Margin investing refers to borrowing funds from a brokerage firm to purchase securities, using investments like stocks and bonds already in your account as collateral. This allows you to buy more
OK, does any of this sound familiar to you... You accept that having a budget will help you spend more wisely and help you save more to meet the financial goals you have set for yourself, so you've tried to make and track budget for about two weeks... Maybe you've even used one of those budget tracking apps. You know, the ones that automatically downloads and categorizes your transactions, but you just can't be bothered to double check the data or add the handful of missing/wrongly categorized transactions. Or maybe you haven't ever made a budget. You always mean to, but it just stresses you out every time you think about it. Or the idea just seems like too much work, so you have resigned yourself to never even trying. Well, you're not alone. Less than half of Canadians budget and even fewer Americans do . There's lots of reasons for this from simple tedium/boredom to lack of discipline to more complex reasons and attitudes such as a restrictive mindse