2007-01-05 09:33:18 · 10 answers · asked by daizy 1 in Business & Finance ➔ Investing
It is possible but highly unlikely.
First you would struggle to find any organisation willing to lend you £4 million for investment purposes.
Second you would need to borrow at an interest rate lower than the interest rate you could invest at. ( Remember you would be paying tax on interest earned)
So as the mythbusters would say - its plausible but not practical.
2007-01-05 09:50:23 · answer #1 · answered by angie 5 · 1⤊ 0⤋
No. Also no. And again No. Unless...
The interest you pay will always exceed the interest you make, unless the interest you make comes from a higher risk investment. If the higher risk investment doesn't come good, you can't even pay back a pound, let alone make any money.
The way to do it is to borrow the million to start a cool business and make a lot of cash out of that. The business borrows the million, not you. But chances are that million will come with hooks, so don't get too excited.
2007-01-05 09:39:20 · answer #2 · answered by wild_eep 6 · 2⤊ 1⤋
Yes if you can get someone to loan you the money. I do it on a small scale.
I borrowed £10 k in February at 6.9% to buy some Tesco shares and they are now up 38.7 %. ( £13,876 ) I am not servicing the loan from the shares though. I am doing that from the profits of a previous venture.
2007-01-05 21:33:55 · answer #3 · answered by Daddybear 7 · 0⤊ 0⤋
depends on the interest rate charged for the loan and the return you expect for from the money minus any taxes. People do it all the time. Purchasing real estate is an example of a loan that could may off in this manner if the rent you charged was sufficient
2007-01-05 09:44:33 · answer #4 · answered by jehicksIII 1 · 0⤊ 1⤋
If the interest on your 4mil loan was say 5%.
You could loan out the 4 mil in 8 lots of 500,000 at 7% and make more than your interest.
So the answer is yes...you could do it.
Providing you recoup more than your repayments+interest...why not.
2007-01-05 09:45:02 · answer #5 · answered by asxtc 2 · 0⤊ 1⤋
No. Interest on loans is usually highter than on deposits. Also Interest on loans is calculated monthly. On deposits ist less frequent.
2007-01-05 09:50:35 · answer #6 · answered by sparbles 5 · 0⤊ 0⤋
Yes.
2007-01-05 12:31:18 · answer #7 · answered by Anonymous · 0⤊ 1⤋
It depends on what interest rate you are paying and receiving.
I could do it.
2007-01-05 09:41:15 · answer #8 · answered by Darth Vader 6 · 0⤊ 2⤋
No.
The interest charged is always more than the interest paid.
2007-01-05 09:36:13 · answer #9 · answered by the Boss 7 · 1⤊ 1⤋
Not at all. If that were the case, we'd all be doing it.
2007-01-05 09:41:25 · answer #10 · answered by Princess415 4 · 1⤊ 1⤋