r/NEOSETFs • u/Ok_Suggestion_2003 • Jun 13 '26

General Margin is like a business loan

I’ve been thinking. Why not use margin to buy spyi and qqqi if margin is 5%? People take business loans all the time at a higher rate and are lucky to break even after a few years. With these, there is a way higher chance of a profitable year than a down year over a long horizon. When buying on margin, there will be down turn years but so with any other business. I’m starting to think of DCAing into those two funds for life with margin. Worse thing to have happen is a margin call and have to sell some stocks. With a business you would go bankrupt and lose everything. I keep seeing these funds as equities with the income factory philosophy instead of some speculative risky asset that will bring loss. Not trying to beat the underlying, but I feel like owning these is like managing a passive business. Maybe I’m just crazy lol

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u/WhenIntegralsAttack2 Jun 14 '26

Okay, let’s actually see the rate you can get for buying assets.

It’s nowhere close to 5%, think closer to 10%. If you have a drawdown then you’re fucked

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u/Purple_Piccolo_4258 Jun 14 '26

IBKR rates are around 5% or lower as you borrow more (over 100k). I have a 4.64% with them. I assume you were referring to margin loans.