Is it wise for me to use leverage to purchase dividend paying stocks?
Is this the time, between now and say summer, for the average investor to
borrow money to purchase buy and hold stocks? A basket of normally expensive blue
chip type stocks that have high dividend yields and are thought to be value
priced in this current market?.
These stocks are expensive to buy for investors like me who invest using a
portion of our paycheque. We are forced to purchase index funds/mutual
funds until our wealth is high enough that we can justify paying brokerage
and trading fees for ETF’s or individual stocks. Perhaps now is a time to
consider borrowing money to purchase long-term buy and hold dividend
yielding stocks because the dividend yields and potential share price
increase will erase the cost of the transaction fees.
Here are my thoughts:
-Yes dividends are not considered safe until they are PAID but once paid for
me they are taxed at 25% of my normal income tax rate (Cash interest is
taxed at the full rate for example)..
-Assuming (in Canada) the interest owing on borrowed money used to fund
equities purchases is tax deductable.
-Or else I can borrow money to contribute to a Retirement tax shelter (RRSP)
and instead of claiming interest as a tax deduction, I would get a automatic
reduction of income taxes owing. In my case it’ll be 34% of the amount I
contribute to the retirement shelter.
-As a personal creed I never borrow money unless I have an equal amount
available to pay off that debt.
Now this may not be a course of action for myself but what about others? Is
leverage recommended for the little long term investor?
Homeland Security Capital Corporation Announces Closing on the Purchase of Assets to Comprise a New Line of Business …
Homeland Security Capital Corporation Announces Closing on the Purchase of Assets to Comprise a New Line of Business …
Homeland Security Capital Corporation (OTCBB: HOMS) , an international provider of specialized technology-based radiological, nuclear, environmental, …
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Categories: Asset Protection Strategies Tags: Announces, Assets, Business, Capital, closing, Comprise, Corporation, Homeland, Line, Purchase, Security
Real Estate Viral Video Using grants and credits to purchase a new home
In this installment Return Real Estate’s Geoff Dearing teaches you how to receive government grants and credits to purchase a new home.
Microsoft Just Pulled Another “Microsoft” with its Purchase of Skype
Microsoft Just Pulled Another “Microsoft” with its Purchase of Skype
When I wake up in the morning and check news for the companies I own, I worry. I don’t worry that my companies missed their quarterly guidance by a few pennies – running a business is an art, and things don’t usually work out in a precise, linear fashion. The companies that have a “deliver the quarter” culture often just play their financial statements as a musical instrument. No, I am not …
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Categories: Buying Wholesale Real Estate Tags: another, just, microsoft, Pulled, Purchase, Skype, “Microsoft”
Grant will help purchase Five Ridge Prairie acres
Grant will help purchase Five Ridge Prairie acres
A Neotropical Migratory Bird Conservation Act grant will help pay for a 156-acre addition to the Five Ridge Prairie State Preserve. Plymouth County Conservation was awarded $97,000 to help purchase the roughly $400,000 addition, said Dennis Sohl, county conservation director.
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