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.
This means that you just need to spend a little time, and you will already have passive income without putting in much effort.
What's really going on?
In 99% of cases, this scheme leads to a complete loss of money, and after that, you will spend a long time paying off the loan.
Option number 1 – Scammers
My niece encountered this scheme and as a result lost about $10,000, or to be more precise, she ended up owing the bank this amount of money.
She came across an advertisement on social media for a very lucrative job with earnings ranging from $3,000 to $30,000 per month, and no special requirements were put forward for the candidate.
All you had to do was register a plastic card in your name at one of the online banks to transfer your rewards to it, and then take out a loan and transfer it to this card.
The funds in this account supposedly served as collateral for virtual investments. The appealing feature was that there was no need to transfer funds from a personal account to the investment company's account.
A caring manager from the investment company's support service helped me open a card account and, accordingly, gained access to all my data.
After a $10,000 loan was received and the money was transferred to a new card account, it quickly ended up in the hands of scammers.
When you know the whole scheme in advance, it seems incredibly stupid to do such a thing, but someone encountering something like this for the first time often falls into this trap. Especially since a fraudulent manager is always a nice person and inspires trust.
A candidate for such a "job" should be wary of the compensation amounts offered by scammers. Currently, there are no investment projects that guarantee 1000% annual returns.
Option 2 - Real investment, but with high risk
Today, many brokers offer their clients the opportunity to deposit money into investment funds or PAMM accounts , promising annual returns of up to 50 percent or more per annum on risky investment options.
But it's not for nothing that these options are called high-risk, and every broker's website displays a warning that such investments are high-risk. This means that by investing in a PAMM account, you not only risk not making a profit, but also losing 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.
So, in conclusion, if you decide to make money from investments, invest only your own money. There are many examples of people losing not only money but also property due to loans.
To increase your investment volume, it's better to use leverage rather than a bank loan, so you won't be left in debt if your trade fails.
Trusted brokers for leveraged trading - https://time-forex.com/spisok-brokerov - client deposit insurance against bankruptcy.
