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<blockquote data-quote="vin" data-source="post: 188278" data-attributes="member: 9475"><p>He actually quoted me. I don't know of any legal investment other than real estate or the stock market where you would make enough of a return to be able to make this scenario work. Even the best interest rates at an online bank (which usually have the best interest rates) are currently around 5-6%. CD rates may be a point or two higher. If you are lucky you will break even at 8%. If you are not going to deposit the money into a bank account, there is no guarantee of the return you will get, and the gains on the investment may not be enough to pay for the loan. The investment may even go down in value.</p><p></p><p>Just out of curiosity, did your accountant say <strong>how</strong> he would be able to generate this return? Is he saying he can guarantee this will work? Does he want you to sign anything other than the loan?</p><p></p><p>I'm not saying this isn't possible. I'm sure it is and others are doing it successfully, but there is also considerable risk involved. I don't know about the tax laws in Canada but it sounds like you may be able to get away with a slightly lower return than you would need here in the States to make this work. But again without more information I would advise against it and think it is a bad idea in general.</p></blockquote><p></p>
[QUOTE="vin, post: 188278, member: 9475"] He actually quoted me. I don't know of any legal investment other than real estate or the stock market where you would make enough of a return to be able to make this scenario work. Even the best interest rates at an online bank (which usually have the best interest rates) are currently around 5-6%. CD rates may be a point or two higher. If you are lucky you will break even at 8%. If you are not going to deposit the money into a bank account, there is no guarantee of the return you will get, and the gains on the investment may not be enough to pay for the loan. The investment may even go down in value. Just out of curiosity, did your accountant say [B]how[/B] he would be able to generate this return? Is he saying he can guarantee this will work? Does he want you to sign anything other than the loan? I'm not saying this isn't possible. I'm sure it is and others are doing it successfully, but there is also considerable risk involved. I don't know about the tax laws in Canada but it sounds like you may be able to get away with a slightly lower return than you would need here in the States to make this work. But again without more information I would advise against it and think it is a bad idea in general. [/QUOTE]
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