Common sense and instinct are often quite right, but there are exceptions that are so unintuitive that they are difficult to comprehend. The world of science has offered us many examples, such as quantum mechanics, but the instinct also says that it is foolish to borrow money to invest. Is it true? The short answer is no, but a better answer is that it depends.

If you value financial security above all else, borrowing is not recommended, but if you are aware of your finances and experience of stock trading, it is a completely legitimate strategy that many use. Jan Bolmeson from Rich Together says like this:

• One badly loan is a loan that makes you poorer
• One bra loan is a loan that makes you richer

In fact, mortgaging has been one of the main methods of financial success for many years. Value investors, venture capitalists and buyers in the Stockholm housing market have all used the same method to become rich; highly leveraged investments in assets with low volatility – that is, how much they move in relation to the market.

Here are five quick tips you should follow if you are considering borrowing for an investment:

1. Borrow moderately
2. Timing is everything
3. Compare the effective interest rate
4. Invest stably
5. Invest smart

Moderation: Of course, you should never borrow more than you can afford to repay. It goes without saying, but take a different perspective. See it as an exchange instead of a loan - what do you have to offer in exchange for the loan? See it as your security. This can be, for example, the income from your employment, your valuables or your home. The higher the margin between

Timing: Interest rates and other costs move all the time. The stock market and the economy in general affect all possible factors that in turn can affect your loans and investments. Follow the trends and borrow when it pays the most - at least with larger loans.

Compare: Regardless of how the stock market stands and if the rooster is crazy, interest rates will always differ between different lenders. This is why you need to compare the effective interest rate (the total cost of the interest, plus any fees and other costs).

Stability: You will learn to have fewer sweaty nights in bed if you do not borrow money for unsecured investments. Save or earn money for more risky purchases and put your borrowed money on safer alternatives.

Smart: It may be tempting to take the risk and throw yourself into the investment world, but it is much smarter to build up their security and experience before making major financial decisions.

What do I do if I'm already in debt??

It does not have to be a major problem, as long as you manage to increase the margin so that the revenue is higher than the fees. The first step is to redeem or collect loans and credits to a single debt. Not only does this mean you pay fewer bills and bills each month, but also that you pay lower interest rates and fewer fees. If you have a payment remark or do not have the security required for a regular bank loan, you can choose one private loans which can be obtained without security.

Margin is power

It's all about managing the margin between revenue and expenditure. Does it really matter that you are in debt if the plus column is larger than the minus column?? Here we have four possible scenarios:

1. You are in debt and use the borrowed money to invest
2. You are debt free and use your own money to invest
3. You are debt free, but invest nothing
4. You are in debt and use your own money to pay off the debt

Which situation is best? Assuming you take care of everything properly, they are listed in order, from best to worst position. The fourth situation is obviously the worst, because the minus column is the largest and the plus column is small.

The third is second worst despite the lack of a minus column, because the plus column is as small as in the fourth. The second is second best, because the plus column increases and a minus column is missing. However, the first is best, as long as the plus column is larger than the minus column.

This is because the margin is largest there. Scenario 1 and 2 have theoretically the same capital, but through mortgaged investments, revenues can exceed expenses. As long as it is possible to get a greater return on investment than the interest rate on the loan, it is completely stupid not borrow money.