how do i determine investment return required to breakeven when borrowing money?

November 11th, 2009

assume mortgage rate οf 6.25%, income tax rate οf 38% аחԁ investment long-term capital gains tax rate οf 15%

Posted in Investment
One Response

Leave a Reply

You must be logged in to post a comment.

One Response to “how do i determine investment return required to breakeven when borrowing money?”

  1. Comment by fran t
    November 11th, 2009

    One never borrows money to invest. Tell the bank or whom ever loaning the money, it will be invested and the determination of a loan will be 99.9% declined.

    Long term capital gains tax rate of 15%? Isn’t it more at 28%; then 38%.. Send to IRS for Publication 17 and other investment Pubs it leads you to.

    To borrow with expectations of breaking even—–never in a million years. But then over again–K-Mart enters bankruptcy—comes out of it and buys Sears—-Rite-Aid on the edge of bankruptcy and buys Eckerd and Brooks Pharmacies.

    Mortgage rate may be 6.25%, which is a deduction with other deductions to reach over the standard deduction. Your superfluous income from borrowing, should you find a lender will be wiped out with the 28% capital gains and then the 38% tax bracket.

    Suggest you save 9 months of income in a savings account. Then go to a library and research DRIP investing—-The purchasing of run of the mill have a supply of Directly from most companies, is without the outrageous brokerage fees and even promotion is not $50.00, plus $25.00 to verify the transaction, plus $75.00 for calling them between the hours of their working, plus and plus fees for having an account with them.
    Reinvesting the dividends in an Investment Program DRIP.

    Back to your question: It’s the Yield you want not Return; capital gains you are talking about—means you are buying to sell after holding for —is it one year and a day this year or held for 6 months after a full month when the precipitation is not in excess of 2 inches within a 30 day period following the Hunter’s Moon or is it the Harvest Moon, then over again perhaps just a fixed Full Moon when Congress is not in session to change the calculations you seek.

    Hope this makes as much sense as your borrowing money to invest. Why not borrow money and go to a Casino. Then the calculations are simple——Say you borrow $1,000, go to Casino, leave Casino— the return will be Zero. And you still owe $1,000.