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Never use payday loans to trade in stocks

Investing in the stock market requires capital. As much as we are saying that it is a lucrative business, the majority of people cannot afford to get in. At times, people are even tempted to take out payday loans to invest in the stock market. Taking out a payday loan is absolutely easy with Lucky Loans and with the funds, the dream of owning a huge number of shares in a company can be made a reality.

What would drive a person to take out a payday loan to invest in the stock market? Well, Investing in stocks always appears like an easy way to make a fortune fast to every trader. However, the reality is that there’s a huge chance of losing your money. In seconds, even the safest gamble might end up stabbing you in the back.

Trading in debt, that’s what it is

The majority of people who think that trading in stocks is a good idea go with this thought- “I am the one repaying the funds with my own salary at the end of the two weeks and it’s more or less my money”. Should this be enough reasoning to give you a go ahead?

Basically, trading in stocks with payday funds is trading with borrowed money. You intend to float your margin (debt money) by buying stocks and wish against odds that “things” will turn out well. One thing’s for sure though, you will repay the payday loan lender no matter what happens with the money. In the event that everything blows up and you lose your money, you will still have some other expenses and because little will be left of your salary, you will be forced to extend the payday loan to the next period. You will keep on extending the loans to the coming periods and what this means is that you are now hooked to the debt cycle.

With payday loans, the risk is actually greater

Lose your money or double it, there is no in between in the stock market. Trading in debt makes things even worse.

Payday loans amplify the performance of any investment portfolio, either for a profit or loss. In essence, this happens with every investment that involves borrowed money. What usually happens is that the losses or profits are significant and much greater than they would have been if the investment funds were taken out of your own pocket.

In addition, the safest way to invest in the stock market would be to invest your funds in the long term. However, this would not be possible because delays in repaying your payday loan balance would cause it to accumulate to a huge figure.

So, here the bottom line; instead of thinking of taking out a payday loan to invest in stocks, it’s better to start saving now and invest with your own cash sometime in future. This way, you will not owe your salary to anyone and there will be no trouble even if you lose your money in the risky stock trading market.

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