Why you shouldn't take out a loan for investment
Everyone is familiar with the phrase “Money makes money,” which means that in order to earn a decent amount of money you need a lot of money.
Therefore, many novice traders believe that the key to success when investing is a large amount of money.
Everything is logically explained simply, any investment has a certain percentage of profit and the more money is invested in it, the larger the amount that the investor will ultimately receive.
Currently, there are a lot of investment projects offering good interest on deposits, and the amount of the promised reward far exceeds the interest on bank loans.
That is, you just need to spend a little time, and you already have passive income without making much effort.
What's really going on?
In 99% of cases, such a scheme leads to a complete loss of money, and after that you will be paying off the loan for a long time.
Option number 1 – Fraudsters
My niece encountered such a scheme and as a result lost about $10,000, or to be more precise, she still owed the bank this amount of money.
On social networks, she came across an advertisement about a very profitable job with earnings from 3,000 to 30,000 dollars a month, and there were no special requirements for the candidate.
You just had to issue a plastic card in your name in one of the online banks to transfer rewards to it, and then take out a loan and transfer it to this card.
The amount in this account allegedly served as collateral for virtual investments. What was attractive was that there was no need to transfer money from a personal account to the account of an investment company.
A caring manager from the investment company's support service helped open a card account and accordingly gained access to all data.
After a $10,000 loan was received and the money was transferred to a new card account, it quickly went into the hands of fraudsters.
When you know the whole scheme in advance, it seems enormously stupid to commit such an act, but a person encountering something like this for the first time often falls into this trap. Moreover, a fraudulent manager is always a nice person who inspires trust.
A candidate for such a “job,” first of all, should be wary of the amount of remuneration that is offered by scammers. At the moment, there are no investment projects that are guaranteed to pay 1000% annual profits.
Option 2 - Real investment, but with high risk
Today, many brokers offer their clients to deposit money into an investment fund or PAMM account , while promising annual profits on risky investment options of up to 50 percent or more per annum.
But it’s not for nothing that these options are called high-risk, and on every broker’s website there is a warning that such investments have an increased risk. That is, by investing in a PAMM account, you may not only not make a profit, but also lose your money.
And if this money turns out to be a loan, then you will lose the bank’s money, which will have to be repaid for more than one year.
Therefore, in conclusion, we can conclude - if you decide to make money from investments, then invest only your money. There are many examples when, because of loans, people lost not only money, but property.
To increase investment volumes, it is better to use leverage than a bank loan, so you will not owe anyone in case of an unsuccessful transaction.
Verified brokers for trading with leverage - https://time-forex.com/spisok-brokerov insurance of client deposits against bankruptcy.