What the F**k is Margin?

What the F**k is Margin?

Author: ListenMoneyMatters.com | Andrew Fiebert and Matt Giovanisci March 4, 2015 Duration: 39:47
We mentioned margin and a previous episode and only touched on it.  A lot of you wrote in with questions so we’re doing a whole show to explain what it is.  Simply put, margin is borrowing against your investments without selling your investments.  You can pull money out of your brokerage account on margin by setting a toggle on the account.  You’ll pay interest and if you don’t pay back the loan, the brokerage firm takes your investment.  It’s like borrowing money against your house.  If you don’t repay it, the bank takes the house.  There isn’t a monthly payment, the interest gets added to the total margin you have out. The trick is to grow your investments faster than the rate of the interest.  Playing with margin can be really good or really bad.  Margin is the reason people like Warren Buffett gets huge returns and the rest of us don’t.  You can use margin to do whatever you want, go to Vegas, buy a house, or invest in more stocks. We are doing this episode for informational purposes.  Margin is a risky thing and not something novices should be fooling with.  So why not use your low risk investment to margin?  You can expect about 7% returns, the interest on margin would be so close to or above that, it wouldn’t be worth it.  A margin call happens when the value of your account falls to value calculated by the broker’s formula.  You would then be required to either deposit more money into the account or sell off some assets.  Again, LMM is not recommending this strategy.  Just putting it out there for everyone to understand.  Show Notes  Shipyard Black IPA: A rich, malty beer. Betterment:  The easy way to invest. Learn more about your ad choices. Visit megaphone.fm/adchoices

Ever feel like personal finance advice comes from another planet, spoken in a language you don't understand? Listen Money Matters is the antidote. Hosts Andrew Fiebert and Matt Giovanisci ditch the jargon and the judgment, offering real talk about money that's actually useful. Their conversations are grounded, often funny, and built on the idea that managing your finances shouldn't feel like a lecture from the wealthy elite. You'll hear practical strategies for budgeting, investing, getting out of debt, and building a life where money works for you, not the other way around. This podcast cuts through the noise with actionable steps, whether you're looking to optimize an already solid portfolio or are just figuring out where your paycheck goes each month. The tone is refreshingly direct and relatable, making even complex topics feel approachable. It's the kind of discussion you'd have with a savvy friend who's done the research and isn't afraid to be blunt about what works. Tune in for a no-BS take on financial freedom that empowers you to make smarter decisions with confidence.
Author: Language: English Episodes: 100

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