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njvicente21 OP t1_iye0vf6 wrote

Reply to comment by maeve_dustaine in 25k Career Starter Loan (2.99% APR) by njvicente21

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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