You sometimes hear people say: if you want to make big money, you have to learn to invest. The fact is indeed that large profits can be achieved with investing, more than with ordinary bank savings. This is because there is a certain risk associated with investing: you invest your money in a company, but the question is how that company will perform in the near future. If it is a healthy company and there is profit and / or growth, your investment will quickly increase in value and you will therefore have a profit. But if the company in which you invested deteriorates, your investment decreases in value and you suffer a loss.
Imagine: you are seriously interested in the scholarship. You follow the news closely and are well informed about developments within certain organizations. Then it may of course happen that an investment in company X seems like a good idea to you at some point. The larger the investment, the greater the profit you can make with it.
Borrowing to invest: it can go wrong
You buy 1000 shares of company X for 1 US dollar each. The price rises until the stock is worth X $ 1.50 each. At that point you sell your shares. Your profit is then 500 US dollars, minus the costs for investing, of course. Had you now had $ 10,000 to invest, your profit would not have been $ 500, but $ 5,000.
Problem: You don't have $ 10,000 on hand, but only $ 1,000. When you have genuine confidence in Company X, the tendency to borrow the remaining $ 9,000 from the bank, a private lender, or from friends or family can be strong. However, it is not advisable to do this even if Company X's prospects are excellent. In any case, investing always remains a risky investment, where you run the risk that your shares will fall in value or that you even lose your entire investment (in case of bankruptcy). If you have borrowed the amount that you have invested, you have to pay off with money that you no longer have.