There aren’t many hard and fast rules when it comes to investing. Here’s one:
DON’T BORROW MONEY TO INVEST!
There are a few stories this week that show the dangers of this.
“Masayoshi Son is now personally on the hook for about $4.7 billion on side deals he set up at SoftBank Group Corp. to boost his compensation, after mounting losses in the company’s tech portfolio wiped out the value of his interest in the second Vision Fund.”
From The Information:
“New filings in crypto exchange FTX’s bankruptcy case revealed that Alameda Research loaned co-founder Sam Bankman-Fried $3.3 billion.”
In contrast with SBF, Masayoshi Son is still above water, and his dealings with Softbank and its entities, have been properly disclosed. But both wanted to invest money they didn’t have on hand.
Getting rich slowly can, in the moment, seem boring. You can make a lot of mistakes as an investor as long as you are not leveraged. Borrowing money to accelerate your timeline is a risk that most people simply can’t handle.
Just saw this on the theme of borrowing to invest. Oh boy…
“Go mortgage your house and buy Bitcoin” – Michael Saylor March 2021 pic.twitter.com/Aw9wPCiYd1
— StockMKTNewz – Evan (@StockMKTNewz) November 14, 2022