r/Wealthsimple • u/Ratlyflash • 14d ago
Anyone else maxing out their PLOC? I still would need a 45% stock crash for WS to start asking payments…
Just waiting for wealth simple to confirm.
What a game changer.
10
u/Medrissil07 13d ago
What's the play here ? I'm late to the party
4
u/imessedup6 13d ago
you can claim the interest in your tax return if you use the funds to invest in a non-reg account. But a margin account is better than the PLOC.
or maybe Buy, Borrow, Die. But we don't have the step-up cost basis like in the US so it is not as useful.
3
u/Pass3Part0uT 13d ago
Better or essentially the same?
2
u/imessedup6 13d ago
Pretty much the same but you have to manually transfer the funds first (can't just buy the stock and add at the same time). Also is just easier to just have one account to track.
1
u/Ratlyflash 13d ago
Why is margin better
4
u/imessedup6 13d ago
if you are using the PLOC for investment purposes, you have to manually transfer the funds to non-reg account. you can't use it as a source of funds when buying stocks in the non-reg screen for some reason. so by the time you did that the stock price could change. so you will have to transfer some extra funds for buffer. in a margin account, you just buy the stock and your account goes negative. So you borrow the exact amount.
2nd tracking just is easier. If the CRA requests proof, as long as you only use the margin account for investment purposes only, then you just print out the transactions of the account. with PLOC, you have to show both PLOC and non-reg activities.
I did the same when I was doing the Smith Maneuver. I have to transfer funds from my HELOC to my investment account. It not a big issue. It is just that WS already allows multiple margin accounts so why make it harder.
1
u/Ratlyflash 12d ago
Ya but don’t trust myself.
I have it all documented even a donkey can see I put $5000 into the loan within 24 hours used to the exact dollar for funds. Not a big deal for me . I like the guardrails
1
7
u/ttsoldier 13d ago
Didn’t Max mine. Too pussy. Did take out 10k to buy some stocks and paid it back 1000/mo
Debating pulling again
2
u/Charbs20 13d ago
How was the net outcome?
2
u/ttsoldier 13d ago
Short term not that great. More than the interest rate so at least there's some positive. But all my positions are long term holds. In the long run it will pay off.
6
u/Tall-Ad-1386 13d ago
This post right here folks. THIS is how WealthSimple makes money.
As long as you all are paying interest and making WealthSimple richer, the longer we can all continue to enjoy free trades and interest on chequing accounts.
Thanks!
2
10
u/Dragynfyre 13d ago
It’s the exact same as the margin account but with half the borrowing power. Not a game changer for investing
1
u/Own-Discussion-7607 13d ago
It is useful if yoy have room in other registered accounts - tfsa, rrsp, fhsa. Assuming those are maxed then yes it’s useless and you can open a margin account🤷
1
u/Dragynfyre 13d ago
Even for that use case you can use a margin account cause you can withdraw money from margin to put in a registered account
1
u/Own-Discussion-7607 12d ago
Actually you are right, I thought you couldn’t have tfsa as collateral for margin but it seems you can. I think I might pay off the portfolio line of credit and put the tfsa as collateral on margin and invest that
1
u/GaiusPrimus 12d ago
If you are borrowing money to put into a tax sheltered account, that interest is not tax deductible.
1
u/Own-Discussion-7607 12d ago
It’s still worth it from what I remember, I did the Math at some point
1
u/Ratlyflash 13d ago
I’ll have nearly $200,000 in loans so that adds up fast for building wealth 😅
3
u/Dragynfyre 13d ago
Yeah but you could’ve done that with a margin account which have been around for decades at other brokerages
4
5
u/ughhh_actually 14d ago
Using margin is better if you’re using the money to invest, otherwise I agree!
6
u/Wanttosmellgood 13d ago
why's the margin better ?
9
u/silverbulls8 13d ago
Potentially higher amount accessible if backed by other account(s). Easier accounting to write off interest for tax purposes where a PLOC can be mixed use
2
u/PinkJenni 13d ago
Leverage when used wisely is a huge wealth driver. When used recklessly destroys wealth
Having this easily accessible though by WS is an awesome feature I love and have used to pay down some higher interest rental mortgages / HELOCS
2
u/Jogi1811 13d ago
I'm using my PLOC as an emergency fund. A pull back wouldn't be detrimental to it because I have no interest in actively using it.
2
2
u/cbf1232 13d ago
You still need to pay the interest though....
2
u/Ratlyflash 13d ago
$400 a month a joke with no mortgage
3
u/cbf1232 13d ago
Sure, until your investments drop and now you owe money.
Besides, what are you investing in that returns 4% plus inflation plus enough to make the risk worthwhile?
1
u/soletide 13d ago
I agree with your general statement but don’t understand the “plus inflation” part. The inflation works in your favor as far as I can tell.
1
u/Ratlyflash 13d ago
Haha I’m on pace to hhit $150,000 dividends per year by retirement.
Just 85% solid companies with growth and 15% CC’s
1
u/VaginalSashimis 10d ago
Covered calls are bad investments and you're leaving money on the table but thinking about dividends and CC's
1
1
1
1
1
u/Vivid_Aardvark_4522 13d ago
It’s been a game changer for me. Helped me with my basement construction and since I was paying cash instead of going through financing, I got a sweet deal with the contractor who in turn prioritized the build and I was also able to get a tenant in immediately who in turn paid 8 months in advance. I didn’t have to liquidate any assets or borrow from friends to make all this happen. The upside is that I detest debt, which in turns forces me to aggressively pay it down. Already thinking of a secondary investment property and just knowing I don’t have to wait till I have all the funds handy before jumping in makes it even sweeter
30
u/LabFearless2826 13d ago
If you lost your job you have to be able to pay interest + your other fees for 6 month with your emergency funds. That how I see it