Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
For the month of March, our members made $US2,790 per contract ($US27,280) selling puts and calls on SPDR S&P 500 (Symbol SPY). That is nearly 4% per week. These returns are unusually high and will not last. If you are not doing that and if it interests you, sign up for our level two program and let us get going.
Most Monday Morning Millionaire Program members are American and Canadian dentists, veterinarians and optometrists. Over the last 20 years, the program has outperformed over 95% of portfolios, including professionally managed ones. (I have a standing $100,000 bet payable by the loser to the winner’s favourite charity, claiming that it will continue to outperform. My bet is public information. No one has taken me up on it.)
Almost all of us have had to borrow money for our education. Those of us who run or ran their own practices, usually have had to borrow for equipment and leasehold improvements.
We borrowed to invest. For most of us, borrowing resulted in significant economic benefits.
We continue to borrow almost every day — to buy a car or to buy a home, mainly.
Should we borrow to build an investment portfolio? Investment bankers love it when we do. They make more money all the time. That is why they issue margin accounts. Investors make money only some of the time. Often, this is another example of the conflict of interest between Wall Street and Main Street.
But not always.
Borrowing money today to invest in the future is a strategy that has a history of being effective when markets are as depressed as they now are and are available at bargain prices.
From our book Monday Morning Millionaire, page 51:
“Now, here is a variation on the above theme used by some successful investors.