Borrowing for investment purposes can make sense in some cases. The use of debt in investing is often referred to as leverage. It frequently makes sense to invest in your education, using student loans, or to borrow to start a business or buy a home. It is important to ensure that the payments on the debt are manageable while the investment increases in value. Also consider whether the cost of the debt exceeds the expected return on the investment. In some instances, portions of the debt payments may be deductible as an itemized deduction on income taxes.
However, few investments are sure things. Lucrative investment strategies advertised in infomercials and online should be carefully researched. Anything promising to make someone rich in a short time for little effort is usually too good to be true.
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