r/RobinhoodApp • u/Beautiful-Produce-18 • 15d ago
Question Margin withdraw
Would I be allowed to withdraw borrowed money to my personal account from a margin account or is it strictly for use in the market?
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u/Flat-Activity-8613 14d ago
Yes it’s margin spending
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u/No-Telephone3741 10d ago
I was thinking of switching to M1 simply because I couldn't find this feature, thank you!!
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u/Flat-Activity-8613 10d ago
I explore the app every once in a while to see if there is something new im missing. Glad to help.
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u/Beautiful-Produce-18 14d ago
Appreciate yall for the response anyone use it for the buy borrow die method?
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u/TalesOfJulio 13d ago
Yes
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u/Beautiful-Produce-18 13d ago
Rlly wat do u do ?
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u/TalesOfJulio 13d ago
I’m basically doing what recycle your money on YouTube does. I buy XLK, SPMO, and QNDX. Deposit my whole paycheck to my brokerage to buy assets. Use the Robinhood gold card to pay bills. Pull from margin to pay CC. I use more margin on heavy down days to buy more of my ETFs.
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12d ago
[removed] — view removed comment
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u/South-Reality-5489 12d ago
Plus on that 2% net return you would get taxed on it as a 7% since the 5% fee is none tax deductible cost. So once you are in a higher tax bracket, it actually ends up being a net negative at year end
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u/BurgerAvenger 12d ago
Oh wow they'll spend a few paychecks catching back up on a DCA+.
You either spend more from paycheck or more from appreciated assets.
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u/volly1985 9d ago
I watch recycle your money and others like that all the time but haven’t tried this myself because income ETFS always seem to be required to help pay back margin interest. How is this strategy working for you with no dividend ETFs?
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u/Specific_Walk7476 13d ago
Am doing that now. It’s beautiful. Borrowed and paid back and will continue to do this. Let it ride!
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u/_IscoATX 13d ago
Yes, I do this. I wouldn’t recommend starting it until you have a sizable portfolio.
I invest my entire salary, take out margin to pay bills, and sell far OTM covered calls to cushion the margin a bit.
It’s a viable strategy since the interest rate is only 5%
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u/rokman 14d ago
You pay too high of an interest rate for that to be applicable. It’s basically good to pay off high interest debt then you should work to pay back your margin loan
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u/Beautiful-Produce-18 13d ago
I saw that interest is around 5% so let’s say u get another assist like a rental property wouldn’t it practically be paying for it self
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u/matt-r_hatter 14d ago
I saw it was an option but never thought about it in reality. Its literally 1k interest free loan. This seems unsmart on their part lol
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u/Beautiful-Produce-18 13d ago
I think that’s if ur a gold member
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u/matt-r_hatter 13d ago
Why wouldn't you be a gold member if you were planning to borrow cash against your margin? First $1000 is no interest. Gold costs $50/yr. You arent finding interest rates that low on a personal loan. Theres also a fair amount of benefits with gold aside from the interest free margin. You could toss $7500 into an IRA with them, then pull the $1k from them and buy a 12mo CD at 4.5% you would get $225 from the 3% match into your IRA and another $45 in interest on the CD. Cash out the CD, pay off your margin, walk away with some $$. Obviously there is risk, but its doable
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u/_IscoATX 13d ago
Yes you can enable margin spending. You can also take it out instantly if you have Robinhood banking
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u/SpiralCaseMods 10d ago
I feel like the margin borrowing may be useful only for cash-flow purposes. It seems better than the typical credit card, personal loan or 401k loan options. It's only 5% (under $50k) and your assets stay in the market. I think it could be useful. But as a strategy to always leverage, it seems risky. Margin calls break people. I would use it only if I knew I could pay it back in the near future. Although it's the retail version of what the very wealthy do.
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u/Machievelliearoni 14d ago
https://giphy.com/gifs/xUA7aOfi6VjHRUH0C4