Young investors take personal debts, to invest in stocks. After the "shutdown due to the pandemic," investors invested in stocks..
Actually, capital inflows in the first half 2020 of the year is a record. Certainly, Considering, that discretionary incomes have not grown much since the pandemic, the money came from successive rounds of "incentive" payments and, which is not surprising, at the expense of leverage.
As shown, margin debt is close to the highest level in history, a "free cash" – to the lowest.
Certainly, the problem with margin debt is that, that you can only borrow ~ 50% of the invoice value (depending on the base collateral).
According to a Magnify Money survey, from 40% investors, who have borrowed funds for investment, Representatives of Generation Z topped the list.
Here are the survey results
Many consumers have taken on debts to invest in, and the leaders of generation Z.
- 40% investors said, that borrowed for investment.
- This includes 80% Representatives of Generation Z
- 60% millennials
- 28% representatives of generation X and 9% baby boomer investors.
Investments on credit money – additional risk for the investorInvestments in credit money – additional risk for the investor
Personal loans were the most popular choice for those., who borrowed for investment. Borrowing from friends or family followed..
38% those, who got into debt for investment, took a personal rent, and 23% borrowed from friends or family. When it comes to taking debt to invest in, many of them went big.
Of those, who borrowed for investment, almost half (46%) Took 5000 dollars and more.
Is it worth investing, when you have debt?
Americans were divided almost in half. 49% said yes, because it is important to create money for the future, and 51% said no, because people have to pay their debts, before you invest.
Of those, who used to borrow for investment, 61% would do it again, and 33% would consider it.
