I'd like to ask the Reddit investing community if it's a feasible business idea to create an LLC; borrow money from a financial institution or third party; and then invest those funds in dividend paying stocks and bonds through the LLC. If doable, how would I go about achieving this? What is the process of lending to an LLC, etc...? And yes, I'm already aware of the inherent risks involved- borrowed money in the stock market. However, I'm considering this as a business, not just gambling money at random stocks/funds, penny stocks, etc. I favor long term purchases of financial instruments (buy and hold if you'd want to call it that), money management rules and evaluating risks as any other normal business would do.
Yes, I'm aware that the income I get from dividends alone will be less than the interest rate of the loan. However, in the long run (next 25 years or so), I believe I will come out ahead due to appreciation of the equities and dividend compounding. As I said, I'm not looking to trade- I'm looking to buy and hold for the next 20+ years. Otherwise, in the short run, I'm roughly looking at 3% dividend yield (I'm excluding equity appreciation since it is an unknown in the future) and anywhere from 7%-13% APR on a personal loan ($45k) from LightStream.
What do you guys think of this?
Submitted October 12, 2017 at 07:54PM by dmrdc http://ift.tt/2ziYpfF
