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maeve_dustaine t1_iye02tm wrote

Why would you take out a loan when you don't have anything specific in mind for it? If you were planning to start a business, sure maybe. But you plan to do what, 'invest'? Not a good idea there's no guarantee you'll outperform that interest rate.

Just focus on getting a full time job and saving up your own money while you have the luxury of low monthly expenses.

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njvicente21 OP t1_iye0vf6 wrote

If I took the loan, plan would be to put roughly 30-40% in my high yield savings account with 4% APY. Other 60-70% I would invest in undervalued, positive cash flowing companies.

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CoyotesAreGreen t1_iye176m wrote

> Other 60-70% I would invest in undervalued, positive cash flowing companies.

Gambling. You're taking a loan and paying interest to gamble the money.

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TyrconnellFL t1_iye9j11 wrote

The first part works unless interest rates drop and the savings rate is no longer equal to the loan. Five years is long enough for anything to happen. But if you have a loan that lets you prepay without penalty, that’s okay. You could make a little interest until you can’t and then be done.

Buying stock with it is high risk. What if your investments tank? Can you still pay back the loan? That’s leveraged investing, which is highest risk. Unless you can afford to lose more than 100%, it’s a bad idea.

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