I know necro thread, but here is my thinking.. Young people want to invest, but don't have capital to diversify enough. Stocks is all about diversification and holding long time investments..

This is where leverage capital can help you! 25k becomes 87.5k capital to invest.. this will help you diversify and minimize your risk. Add the fact you are young (early 20s to 40s), over your working life, you can easily bare this risk..

Better to invest 87.5k in your 20s than 200k when you are 50!..

That's my thinking of how leverage can help young people who lack serious capital for investments.

My strategy is to invest 200 percent of my savings (yes 200%) of my savings into stocks and start scaling back when i'm 40 (ie, 200% at 25, 200% at 32, 150% at 37, 100% at 40, 50% by 55).

By doing so, I minimize my risk by diversification AND maximize my stock gains by using time on my side..

... in the unlikely scenario that you get incapacitated whilst young and able, does it really matter if you carry some debt? you are already screwd financially..

Also, the stocks you hold are used as collateral.

Obviously, you'd want to start looking at doing this once you've saved a significant amount of money ~50k ringgit.

People put downpayments on house at 10:1 ratio all the time, what the heck is 2:1 on stocks when you are at age 23 and have 40 years of working ahead of you?

This post has been edited by the99percent1: Dec 3 2014, 03:41 PM