Is it wise to borrow student loan in order to invest in stocks?
I’m a college student and recently started investing in stock with $2000. I remember reading from an article several years ago that it is recommended to borrow student loans in order to invest because of the low interest rate and long grace period (20 years). Therefore over the course of 20 years the investment will grow enough that you can pay off everything and have plenty of money left.
No, because you have to pay interest on the loan and thus your return on investment already diminishes from that. With only $2000 you cannot build a well diversified portfolio and $2000 itself isn’t going to make you very much money and you must also consider the stock markets risk. Investing in the stock market takes a lot of knowledge and time, as a student you should be more focused on school. If you want to earn some extra money I’d suggest possibly taking that $2000 and putting it in a CD(Certificate of Deposit) in which you can’t touch the money for a certain period of time and you earn interest on it. This has almost no risk to it. A cool thing you could do is do a simulated stock portfolio(yahoo offers this), and get some practice with how the stock market works. Good Luck with whatever you decide!
