[Premium] Using Margin To Get and Stay Rich

I would like to spend a bit of time discussing the use of margin for investment, especially considering the dearth of discussions on this. I’m a great believer of using other people’s money to our advantage, but how can we use debt safely and effectively? First, a basic understanding of…

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5 comments

    1. I saw the rates, wow. It will save me thousands. I set up an IB account, but got stuck at transferring positions. Won’t let me submit. No one picks up the line either. Really frustrating caused I keyed in so much info. I have my own wealth managers at CIMB who handle all these annoyances. But I pay for it I guess. I will keep trying but its not making a good first impression.

  1. Hmmm, maybe it’s because it is the holiday season that is reason for the customer service fail? They are not known for the best user interface, but I believe most professional bankers favor using IB for the personal trading. I have heard IB charges a fee to transfer each ticker though recently the price has gone down. This is one recent post I read about someone transferring: https://bit.ly/3mYrTXO . Personally, to minimize the transfer cost, I may consider just enter ‘at market’ orders before the stock market open, to simulatenously sell on open in my old account and buy on open on the IB account, as theoretically both will execute at same price, and it will only cost you the trade execution fee. Not sure how much your brokers charge but for IB it is as low as US$1 for trades regardless on size on blue chip US stocks so you would potentially be saving a lot in long run. I guess the only limitation is that you would need to have enough available cash in the new IB account. Alternatively, I would consider having multiple broker accounts as I wonder how safe it is to have all my eggs in one (broker) basket.

    1. I thought about buying and selling in as well, not sure what would be the difference in fees. My positions are pretty large, and at 0.3% commission it adds up to quite a lot. I’ll read up more about it. Thanks much for the link.

      By right there shouldn’t be risk of a brokerage failing.. it’s all heavily regulated. As far as I know, it has never happened in Singapore, and there should be some way for the clients’ assets to transfer safely to another brokerage in any case. I suppose there is little harm in having multiple brokerage accounts, just troublesome to manage.

      I’m getting fairly good service from CIMB though. I can call up my relationship manager and she will handle most things. That’s one thing I like about, which I don’t think I can get from IB. But I agree that the savings in fees and margin are very attractive. I’m also not happy that my brokerage raised their spread when interest rates dropped.

      Thanks a lot for the good ideas Callie =)

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